Exam 8: Gdp: Measuring Total Production and Income

Marla is an architect who is designing a home for Chuck.Chuck is paying Marla $150 per hour to design his new home.When Chuck and Marla get married,Marla continues to work on designing the home,but she no longer charges Chuck for her work.As a result,GDP ________ because ________.

Table 8-8 -Refer to Table 8-8.Suppose that a simple economy produces only four goods and services: sweaters,CDs,sugar,and soft drinks.Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households.Calculate nominal GDP for this simple economy.

In 2015,Ford Motor Company's sales were rising.These events were caused by

If nominal GDP is $5 trillion and real GDP is $4 trillion,the GDP deflator is

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

An inflation rate of 5% between 2015 and 2016 would be implied by a change in the GDP deflator from ________ in 2015 to ________ in 2016.

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

When consumers are less confident about their jobs or incomes,they are more likely to

Table 8-1 -Refer to Table 8-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals

Real GDP is GDP in a given year

Table 8-2 -Refer to Table 8-2.Suppose that a simple economy produces only four goods and services: shoes,DVDs,tomatoes,and ketchup.Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.Using the information in the above table,nominal GDP for this simple economy equals

Which of the following is counted in GDP?

National income is equal to

Nominal GDP is GDP in a given year

Table 8-19 -Refer to Table 8-19.Given the information above,calculate the GDP deflator in 2016.

If the GDP deflator is 142,by how much have prices changed since the base year?

Which of the following is included in both the U.S.GDP and U.S.GNP?

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

Why do we subtract import spending from total expenditures?