Deck 5: Measuring a Nation's Income

Full screen (f)
exit full mode
Question
Which of the following is the correct definition of GDP?

A)the market value of all goods produced within a country
B)the market value of all final goods and services produced by the citizens of a country
C)the market value of all final goods and services consumed within a country over a number of years
D)the market value of all final goods and services produced within a country in a given period of time
Use Space or
up arrow
down arrow
to flip the card.
Question
Which of the following is a macroeconomic issue?

A)how many workers a firm employs
B)what determines the percentage of population that is employed
C)how an increase in wages changes costs of production
D)how an income tax changes a person's decision to look for a job
Question
In a simple circular-flow diagram,how are total income and total expenditure interrelated?

A)They are seldom equal because of the dynamic changes that occur in an economy.
B)They are equal only when all goods and services produced are sold.
C)They are always equal because every transaction has a buyer and a seller.
D)They are always equal because of accounting rules.
Question
Which of the following headlines would be most closely related to what macroeconomists study?

A)Unemployment rate rises from 5 percent to 5.5 percent.
B)The price of gold grows by 3.1 percent in the third quarter.
C)The number of tourists visiting Canadian national parks has declined.
D)The price of oranges rises after an early frost.
Question
What does the simple circular-flow diagram illustrate?

A)that expenditure generates income so that income and the value of production are equal
B)that the economy's income exceeds its expenditure
C)that the expenditure of an economy exceeds its income
D)that money "flows" from households to firms and not the other way around
Question
According to the simple circular-flow model,which of the following do firms buy from households?

A)natural resources, such as oil and minerals
B)goods and services
C)inventions and innovations
D)labour
Question
What is the goal of macroeconomics?

A)to explain how economic changes affect prices of particular goods
B)to explain market failures, such as externalities and monopoly
C)to explain changes that affect the economy as a whole
D)to explain how an income tax influences a person's decision to work
Question
In an economy consisting of only households and firms,how can GDP be computed?

A)by adding up the total expenditures of households and subtracting savings
B)by adding up the income paid by firms only in exchange for labour
C)by adding up either total income paid by firms or total expenditures of households, but not both
D)by adding up both the total expenditures of households and the total income paid by firms
Question
Why does expenditure equal income?

A)because firms are required by law to pay out all their revenue as income to someone
B)because ultimately firms are owned by households
C)because for every sale there is a buyer and a seller
D)because the demand and supply of goods and services must be equal
Question
Which of the following questions is more likely to be studied by a macroeconomist than a microeconomist?

A)Why do prices in general rise by more in some countries than others?
B)Why do wages differ across industries?
C)Does education increase a worker's income on average?
D)Is there usually a gain from trade between two countries?
Question
How is GDP computed?

A)Add up the quantities of all final goods and services.
B)Add up the cost of producing final goods and services.
C)Use weights determined by a survey regarding how much people value different sorts of goods and services to compute GDP as a weighted average.
D)Add up the market values of all final goods and services produced within a country in a given period of time.
Question
If GDP rises,what happens?

A)Income and expenditure must both rise.
B)Income and expenditure must both fall.
C)Income must rise, but expenditure may rise or fall.
D)Expenditure must rise, but income may rise or fall.
Question
In a simple circular-flow diagram,why is total income equal to total expenditure?

A)because firms re-invest their revenue
B)because savings are small
C)because income from interest is not part of GDP
D)because every transaction has a buyer and a seller
Question
In order to include many different products in an aggregate measure,how is GDP computed?

A)using values of goods based on surveys of consumers
B)using primarily costs of production
C)using primarily market prices
D)using weights that are computed by how much of a particular good is produced relative to total output
Question
Which of the following topics are studied in macroeconomics?

A)national output, the inflation rate, and the trade deficit
B)the price of BCE stock, wage differences between genders, and antitrust laws
C)differences in market structure and how consumers maximize utility
D)the effect of trade tariffs on prices and patterns of international trade
Question
Which of the following statistics is the best single measure of an economy's well-being?

A)unemployment rate
B)inflation rate
C)gross domestic product
D)trade deficit
Question
How should Robert's contributions to GDP be calculated?

A)using his income, not his expenditure
B)using his expenditure, not his income
C)using both his income and his expenditure
D)using either his income or his expenditure, but not both
Question
What is the relationship between income and expenditure for an economy?

A)Income is greater than expenditure.
B)Income is less than expenditure.
C)Income equals expenditure.
D)Income could be greater or less than expenditure.
Question
Why is GDP computed using market prices as the value of final goods and services?

A)because market prices do not change much, so it is easy to make comparisons between years
B)because if market prices are out of line with how people value goods, the government sets ceilings and floors on them
C)because costs change too much to reflect the value of goods and services
D)because market prices reflect the value of goods and services
Question
Which of the following markets is the model of supply and demand most appropriate for?

A)markets in which there is one large seller and many buyers
B)markets in which there is one large buyer and many sellers
C)markets in which there are few sellers and few buyers
D)markets in which there are many sellers and many buyers
Question
A professional gambler moves from a province where gambling is illegal to a province where gambling is legal.What impact does this move have on Canada's GDP?

A)It raises GDP.
B)It decreases GDP.
C)It does not change GDP because gambling is never included in GDP.
D)It does not change GDP because in either case his income is included.
Question
Ralph used to mow his lawn,but now he pays a company to do it.How does this change affect GDP?

A)It decreases GDP by more than the price of the service.
B)It increases GDP by less than the price of the service. .
C)It decreases GDP by the price of the service.
D)It increases GDP by the price of the service.
Question
How are grapes treated in GDP terms?

A)They are always counted as intermediate goods.
B)They are counted as intermediate goods only if they are used to produce another good like wine.
C)They are counted as intermediate goods only if they are consumed.
D)They are counted as intermediate goods whether they are used to produce other goods or consumed.
Question
Over the past few decades,Canadians have chosen to cook less at home and eat more at restaurants.How has this practice affected GDP?

A)It has increased measured GDP.
B)It has reduced measured GDP.
C)It has not affected measured GDP.
D)It has had an ambiguous effect on GDP.
Question
Sally used to prepare her own meals,but now she eats out more.How does Sally's change of habit affect GDP?

A)It raises GDP by the additional value Sally produces during her new extra time.
B)It raises GDP by the price of the restaurant meals.
C)It raises GDP by less than the restaurant price of the meals because now Sally does not work anymore for preparing meals.
D)It raises GDP by more than the restaurant price of the meals because Sally can do something else during the extra time that she now has.
Question
How are intermediate goods treated in GDP computations?

A)They are included so we can get a measure of sales.
B)They are excluded because their value is already counted in the value of final goods.
C)They are excluded because they are too difficult to measure.
D)They are included because they are final goods for the firm producing them.
Question
Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).What is included in GDP?

A)The rent was included in GDP; the purchases of the condominiums are not included.
B)The rent was included in GDP, and so is the purchase of the condominiums.
C)The rent was not included in GDP; the purchases of the condominiums are included.
D)The rent was not included in GDP; the purchases are not included either.
Question
How is the value of housing services included in GDP?

A)It is valued as the annual depreciation of the house.
B)It is valued as the mortgage payment made on the house.
C)It uses the purchase price of the house in the year it is sold.
D)It is based on an estimate of its rental value.
Question
A professional gambler moves from a province where gambling is legal to a province where gambling is illegal.What impact does this move have on Canada's GDP?

A)It raises GDP.
B)It decreases GDP.
C)It does not change GDP because gambling is never included in GDP.
D)It does not change GDP because in either case his income is included.
Question
If a province with legalized gambling made gambling illegal,then,other things the same,what would happen to GDP?

A)It would decrease.
B)It would increase.
C)It would not change because both legal and illegal production are included in GDP.
D)It does not change because gambling is never included in GDP.
Question
Roommates Grace and Kelly are sharing household chores and think they have an even exchange.Other things the same,if instead they paid each other for the chores the other did,what would happen to GDP?

A)It would fall.
B)It would rise.
C)It would be unaffected because paid or not, household chores are not included in GDP.
D)It would be unaffected because paid or not, household chores are included in GDP.
Question
Which of the following is NOT included in GDP?

A)unpaid cleaning and maintenance of houses
B)services such as those provided by lawyers and hairstylists
C)final goods that are produced but not sold by the end of the year
D)production of foreign citizens living in Canada
Question
How is flour treated in GDP terms?

A)It is counted as an intermediate good.
B)It is counted as an intermediate good if it is used by a company to make bread.
C)It is counted as a final good if it is used by a consumer who bakes bread for his own consumption.
D)It is counted as a final good.
Question
How does the value of total sales of all firms in the country for a year compare with GDP?

A)It equals GDP for the year.
B)It is larger than GDP for the year.
C)It is smaller than GDP for the year.
D)It could be larger or smaller than GDP for the year.
Question
If Susan decides to change the oil in her car herself instead of having Speedy Lube change the oil for her,what is the impact on GDP?

A)It necessarily rises.
B)It necessarily falls.
C)It will be unaffected because the same service is produced in either case.
D)It will be unaffected because car maintenance is not included in GDP.
Question
Which of the following nonmarket goods or services is included as an estimate in Canadian GDP?

A)the value of unpaid housework
B)the value of vegetables that people grow in their gardens
C)the estimated rental value of owner-occupied homes
D)the estimated value of illegal drugs
Question
How are intermediate goods accounted for when calculating GDP?

A)The value of all intermediate goods is included in GDP.
B)The value of intermediate goods is included in GDP only if they were produced in the previous year.
C)The value of intermediate goods is included in GDP only if they are purchased by firms rather than households.
D)The value of intermediate goods is not included in GDP unless they are part of inventory.
Question
If a province made an illegal activity such as gambling or prostitution legal,then,other things the same,what would happen to GDP?

A)It would increase.
B)It would decrease.
C)It would not change because both legal and illegal production are included in GDP.
D)It would not change because these activities are never included in GDP.
Question
Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).Suppose the value of the condominium owners' housing services is now the same as their former rent.What happens to GDP?

A)GDP necessarily increases.
B)GDP necessarily decreases.
C)GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.
D)GDP is unaffected because previously rent was included in GDP, and now it is replaced by the estimate of the value of housing services.
Question
Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.What would this change do by itself?

A)It would make GDP fall over time.
B)It would not make any change in GDP over time.
C)It would make GDP rise over time.
D)It would change GDP, but in an uncertain direction.
Question
A Canadian company owned by a Japanese citizen has opened a sushi restaurant in Romania.Where is the profit included?

A)in Romanian GNP
B)in Canadian GDP
C)in Romanian GDP
D)in Japanese GDP
Question
Which of the following best defines national income?

A)all income produced within a country
B)the total income earned by a nation's residents from the production of goods and services within the borders of the country
C)the total income earned by a nation's residents in the production of goods and services
D)the income received by the national government
Question
How is gasoline treated in GDP terms?

A)It is counted as an intermediate good.
B)It is counted as a final good if a company uses it to provide transportation services.
C)It is counted as a final good if a consumer uses it to mow her yard.
D)It is counted as an intermediate good if a consumer uses it to mow a friend's yard without pay.
Question
Which of the following is included in GDP?

A)the sale of stocks and bonds
B)the estimated rental value of owner-occupied housing
C)unpaid production of goods and services at home
D)the sale of an old piece of jewellery
Question
National income differs from net national product in that it includes business subsidies.Which of the following does national income exclude,as opposed to net national product?

A)profits of corporations
B)indirect business taxes
C)retained earnings of corporations
D)depreciation
Question
The local Chevrolet dealership has an increase in inventory of 25 cars in 2012.How will the sale of all 25 cars in 2013 affect the GDP?

A)The value of the cars will be counted as part of GDP in 2012, but not in 2013.
B)The value of the cars will not affect the 2012 GDP, but will be included in 2013 GDP.
C)The value of the cars will be included in both 2012 and 2013 GDP.
D)The value of the cars will not be included in GDP in 2012 or 2013.
Question
Which of the following is counted in GDP?

A)the estimated value of housework
B)the value of illegally produced goods and services
C)the value of newly issued stocks and bonds
D)the estimated value of housing services
Question
Which of the following is included in GDP?

A)the sale of stocks and bonds
B)the sale of used goods
C)the sale of services such as visits to a doctor
D)the sale of ownership in a new company
Question
Which of the following is counted in Canadian GDP?

A)goods and services produced by Canadian citizens working in the U.S.
B)American intermediate goods used in the production of Canadian final goods
C)Canadian final goods and services purchased by the American government
D)American final goods and services purchased by the Canadian government
Question
Anna,a Canadian citizen who works in Germany for a French firm,receives her pay in a Swiss bank.To which country's GDP does Anna's employment contribute?

A)Canada.
B)Germany
C)France
D)Switzerland
Question
In the national income accounts,what is depreciation called?

A)total tax depreciation
B)capital consumption allowance
C)consumption of circulating capital
D)loss due to wear
Question
George buys and lives in a newly constructed home he paid $200 000 for in 2012.He sells the house in 2013 for $225 000.How is GDP impacted?

A)The 2013 sale increases 2013 GDP by $225 000 and does nothing to 2012 GDP.
B)The 2013 sale increases 2013 GDP by $25 000 and does nothing to 2012 GDP.
C)The 2013 sale does not increase 2013 GDP and does nothing to 2012 GDP.
D)The 2013 sale increases 2013 GDP by $225 000, and 2012 GDP is revised upward by $25 000.
Question
Which of the following is included in Canadian GDP?

A)the difference in the price of the sale of an existing home and its original purchase price
B)goods produced by foreign citizens working in Canada
C)known illegal activities
D)goods produced by a Canadian company in France
Question
How is Canadian GNP calculated from Canadian GDP?

A)by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad
B)by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada
C)by including income earned by foreigners in Canada
D)by excluding income earned by Canadian citizens abroad
Question
How are goods that go into inventory and are not sold during the current period treated in GDP terms?

A)They are counted as intermediate goods and so are not included in current-period GDP.
B)They are counted in current GDP only if the firm that produced them sells them to another firm.
C)They are included in current-period GDP as inventory investment.
D)They are included in current-period GDP as consumption.
Question
A movie company makes 500 000 DVDs in the second quarter.It sells 300 000 of them before the end of the second quarter,and holds the others in its warehouse.How is the second quarter GDP affected?

A)The DVDs are included in second-quarter GDP.
B)The DVDs that are not purchased in the second quarter are not counted in the second-quarter GDP.
C)Since all the 500 000 DVDs will eventually be bought by consumers, they are included as consumption in the third quarter.
D)The DVDs will be counted as a change in inventory in the second quarter, and when sold in the third quarter will raise GDP.
Question
Darla,a U.S.citizen,only works in Canada.How does the value added to production from her employment impact GDP and GNP?

A)It raises Canadian and U.S. GDP.
B)It raises Canadian GDP and U.S. GNP.
C)It raises Canadian GNP and U.S. GDP.
D)It raises Canadian and U.S. GNP.
Question
How is NNP calculated?

A)by subtracting savings from the total income of citizens of a nation
B)by subtracting business expenses and taxes from the total profits earned by citizens of a nation
C)by subtracting depreciation from the total income of citizens of a nation
D)by subtracting depreciation from the total profits earned by citizens of a nation
Question
Greg,a Canadian citizen,works in the United States but lives with his family in Canada.How does his employment impact GDP and GNP?

A)He raises Canadian GDP because he spends part of his income in Canada.
B)He lowers U.S. GDP because he takes his income out of the U.S.
C)He raises Canadian GNP because he earns income abroad.
D)He lowers Canadian GNP because he earns income abroad.
Question
An Italian company opens a pasta company in Ottawa.Where are the profits from this pasta company included?

A)in both Canadian and Italian GNP
B)in both Canadian and Italian GDP
C)in Canadian GNP and Italian GDP
D)in Canadian GDP and Italian GNP
Question
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the personal income for this economy?</strong> A)$154 B)$169 C)$170 D)$178 <div style=padding-top: 35px>
Refer to the Table 5-1.What is the personal income for this economy?

A)$154
B)$169
C)$170
D)$178
Question
In the nation of Ophelia,quarterly GDP is always higher in the second quarter than in other quarters.In order to account for this predictable jump in GDP,what will Ophelia's government statisticians most likely do?

A)make sure to account for inventory changes during the second quarter
B)report real GDP, not nominal GDP
C)focus on GNP rather than GDP during the second quarter
D)make a seasonal adjustment for the second quarter data
Question
In computing GDP,what is investment?

A)spending on stocks, bonds, and other financial assets
B)spending on real estate and financial assets
C)spending on new capital equipment, inventories, and structures, including new housing
D)spending on capital equipment, inventories, and structures, excluding household purchases of new housing
Question
Which of the following best defines retained earnings?

A)the part of income that households retain after paying taxes
B)the part of income that businesses retain after paying taxes
C)the part of income that corporations pay to their owners in the form of dividends
D)the part of income that corporations do not pay to their owners in the form of dividends
Question
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the personal income for this economy?</strong> A)$417 B)$367 C)$349 D)$338 <div style=padding-top: 35px>
Refer to the Table 5-2.What is the personal income for this economy?

A)$417
B)$367
C)$349
D)$338
Question
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the NNP for this economy?</strong> A)$164 B)$170 C)$183 D)$192 <div style=padding-top: 35px>
Refer to the Table 5-1.What is the NNP for this economy?

A)$164
B)$170
C)$183
D)$192
Question
The government reports that "GDP increased by 1.6 percent in the last quarter." What does this statement mean?

A)GDP increased at an annual rate of 6.4 percent during the last quarter.
B)GDP increased at an annual rate of 4.8 percent during the last quarter.
C)GDP increased at an annual rate of 1.6 percent during the last quarter.
D)GDP increased at an annual rate of 0.4 percent during the last quarter.
Question
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the NNP for this economy?</strong> A)$380 B)$388 C)$394 D)$405 <div style=padding-top: 35px>
Refer to the Table 5-2.What is the NNP for this economy?

A)$380
B)$388
C)$394
D)$405
Question
If the government reports that "GDP has increased at an annual rate of 6.0 percent for the fourth quarter of 2013," by how much has GDP increased?

A)6.0 percent during 2013
B)24.0 percent during 2013
C)6.0 percent during the fourth quarter of 2013
D)1.5 percent during the fourth quarter of 2013
Question
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the national income for this economy?</strong> A)$382 B)$392 C)$396 D)$398 <div style=padding-top: 35px>
Refer to the Table 5-2.What is the national income for this economy?

A)$382
B)$392
C)$396
D)$398
Question
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the disposable personal income for this economy?</strong> A)$124 B)$154 C)$164 D)$170 <div style=padding-top: 35px>
Refer to the Table 5-1.What is the disposable personal income for this economy?

A)$124
B)$154
C)$164
D)$170
Question
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the GNP for this economy?</strong> A)$410 B)$435 C)$440 D)$460 <div style=padding-top: 35px>
Refer to the Table 5-2.What is the GNP for this economy?

A)$410
B)$435
C)$440
D)$460
Question
What is the income that households and noncorporate businesses receive called?

A)disposable personal income
B)proprietors' income
C)national income
D)personal income
Question
In Canada,GDP is reported each quarter.How are these numbers computed?

A)These numbers are adjusted to make them measure at annual and seasonally adjusted rates.
B)These numbers are adjusted to make them annual rates, but no adjustment for seasonal variations is made.
C)These numbers are quarterly rates that have been seasonally adjusted.
D)These numbers are at quarterly rates and have not been seasonally adjusted.
Question
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the national income for this economy?</strong> A)$175 B)$185 C)$192 D)$215 <div style=padding-top: 35px>
Refer to the Table 5-1.What is the national income for this economy?

A)$175
B)$185
C)$192
D)$215
Question
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the disposable personal income for this economy?</strong> A)$353 B)$343 C)$278 D)$263 <div style=padding-top: 35px>
Refer to the Table 5-2.What is the disposable personal income for this economy?

A)$353
B)$343
C)$278
D)$263
Question
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the GNP for this economy?</strong> A)$190 B)$193 C)$207 D)$215 <div style=padding-top: 35px>
Refer to the Table 5-1.What is the GNP for this economy?

A)$190
B)$193
C)$207
D)$215
Question
What does personal income include and exclude?

A)It includes retained earnings, corporate income taxes, and social insurance contributions, and excludes interest and transfer payments received by households from government.
B)It excludes retained earnings, corporate income taxes, social insurance contributions, and interest, and includes transfer payments received by households from government.
C)It excludes retained earnings, corporate income taxes, and social insurance contributions, and includes interest and transfer payments received by households from government.
D)It includes retained earnings, corporate income taxes, social insurance contributions, and interest, and excludes transfer payments received by households from government.
Question
If GDP in the fourth quarter is announced to be $1.6 trillion,what does this number reflect?

A)the actual amount of final goods and services produced in the fourth quarter
B)about four times the annual GDP rate
C)a somewhat lower amount than the amount actually produced in the fourth quarter, because GDP is seasonally adjusted, and nonseasonally adjusted GDP for the fourth quarter is typical higher
D)about four times the amount actually produced in that quarter, plus what had been removed for seasonal adjustment
Question
Which of the following best defines disposable personal income?

A)the income that households have left after paying taxes and nontax payments to the government
B)the income that businesses have left after paying taxes and nontax payments to the government
C)the income that households and noncorporate businesses have left after paying taxes and nontax payments to the government
D)the income that households and businesses have left after paying taxes and nontax payments to the government
Unlock Deck
Sign up to unlock the cards in this deck!
Unlock Deck
Unlock Deck
1/169
auto play flashcards
Play
simple tutorial
Full screen (f)
exit full mode
Deck 5: Measuring a Nation's Income
1
Which of the following is the correct definition of GDP?

A)the market value of all goods produced within a country
B)the market value of all final goods and services produced by the citizens of a country
C)the market value of all final goods and services consumed within a country over a number of years
D)the market value of all final goods and services produced within a country in a given period of time
the market value of all final goods and services produced within a country in a given period of time
2
Which of the following is a macroeconomic issue?

A)how many workers a firm employs
B)what determines the percentage of population that is employed
C)how an increase in wages changes costs of production
D)how an income tax changes a person's decision to look for a job
what determines the percentage of population that is employed
3
In a simple circular-flow diagram,how are total income and total expenditure interrelated?

A)They are seldom equal because of the dynamic changes that occur in an economy.
B)They are equal only when all goods and services produced are sold.
C)They are always equal because every transaction has a buyer and a seller.
D)They are always equal because of accounting rules.
They are always equal because every transaction has a buyer and a seller.
4
Which of the following headlines would be most closely related to what macroeconomists study?

A)Unemployment rate rises from 5 percent to 5.5 percent.
B)The price of gold grows by 3.1 percent in the third quarter.
C)The number of tourists visiting Canadian national parks has declined.
D)The price of oranges rises after an early frost.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
5
What does the simple circular-flow diagram illustrate?

A)that expenditure generates income so that income and the value of production are equal
B)that the economy's income exceeds its expenditure
C)that the expenditure of an economy exceeds its income
D)that money "flows" from households to firms and not the other way around
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
6
According to the simple circular-flow model,which of the following do firms buy from households?

A)natural resources, such as oil and minerals
B)goods and services
C)inventions and innovations
D)labour
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
7
What is the goal of macroeconomics?

A)to explain how economic changes affect prices of particular goods
B)to explain market failures, such as externalities and monopoly
C)to explain changes that affect the economy as a whole
D)to explain how an income tax influences a person's decision to work
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
8
In an economy consisting of only households and firms,how can GDP be computed?

A)by adding up the total expenditures of households and subtracting savings
B)by adding up the income paid by firms only in exchange for labour
C)by adding up either total income paid by firms or total expenditures of households, but not both
D)by adding up both the total expenditures of households and the total income paid by firms
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
9
Why does expenditure equal income?

A)because firms are required by law to pay out all their revenue as income to someone
B)because ultimately firms are owned by households
C)because for every sale there is a buyer and a seller
D)because the demand and supply of goods and services must be equal
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
10
Which of the following questions is more likely to be studied by a macroeconomist than a microeconomist?

A)Why do prices in general rise by more in some countries than others?
B)Why do wages differ across industries?
C)Does education increase a worker's income on average?
D)Is there usually a gain from trade between two countries?
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
11
How is GDP computed?

A)Add up the quantities of all final goods and services.
B)Add up the cost of producing final goods and services.
C)Use weights determined by a survey regarding how much people value different sorts of goods and services to compute GDP as a weighted average.
D)Add up the market values of all final goods and services produced within a country in a given period of time.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
12
If GDP rises,what happens?

A)Income and expenditure must both rise.
B)Income and expenditure must both fall.
C)Income must rise, but expenditure may rise or fall.
D)Expenditure must rise, but income may rise or fall.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
13
In a simple circular-flow diagram,why is total income equal to total expenditure?

A)because firms re-invest their revenue
B)because savings are small
C)because income from interest is not part of GDP
D)because every transaction has a buyer and a seller
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
14
In order to include many different products in an aggregate measure,how is GDP computed?

A)using values of goods based on surveys of consumers
B)using primarily costs of production
C)using primarily market prices
D)using weights that are computed by how much of a particular good is produced relative to total output
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
15
Which of the following topics are studied in macroeconomics?

A)national output, the inflation rate, and the trade deficit
B)the price of BCE stock, wage differences between genders, and antitrust laws
C)differences in market structure and how consumers maximize utility
D)the effect of trade tariffs on prices and patterns of international trade
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
16
Which of the following statistics is the best single measure of an economy's well-being?

A)unemployment rate
B)inflation rate
C)gross domestic product
D)trade deficit
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
17
How should Robert's contributions to GDP be calculated?

A)using his income, not his expenditure
B)using his expenditure, not his income
C)using both his income and his expenditure
D)using either his income or his expenditure, but not both
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
18
What is the relationship between income and expenditure for an economy?

A)Income is greater than expenditure.
B)Income is less than expenditure.
C)Income equals expenditure.
D)Income could be greater or less than expenditure.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
19
Why is GDP computed using market prices as the value of final goods and services?

A)because market prices do not change much, so it is easy to make comparisons between years
B)because if market prices are out of line with how people value goods, the government sets ceilings and floors on them
C)because costs change too much to reflect the value of goods and services
D)because market prices reflect the value of goods and services
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
20
Which of the following markets is the model of supply and demand most appropriate for?

A)markets in which there is one large seller and many buyers
B)markets in which there is one large buyer and many sellers
C)markets in which there are few sellers and few buyers
D)markets in which there are many sellers and many buyers
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
21
A professional gambler moves from a province where gambling is illegal to a province where gambling is legal.What impact does this move have on Canada's GDP?

A)It raises GDP.
B)It decreases GDP.
C)It does not change GDP because gambling is never included in GDP.
D)It does not change GDP because in either case his income is included.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
22
Ralph used to mow his lawn,but now he pays a company to do it.How does this change affect GDP?

A)It decreases GDP by more than the price of the service.
B)It increases GDP by less than the price of the service. .
C)It decreases GDP by the price of the service.
D)It increases GDP by the price of the service.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
23
How are grapes treated in GDP terms?

A)They are always counted as intermediate goods.
B)They are counted as intermediate goods only if they are used to produce another good like wine.
C)They are counted as intermediate goods only if they are consumed.
D)They are counted as intermediate goods whether they are used to produce other goods or consumed.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
24
Over the past few decades,Canadians have chosen to cook less at home and eat more at restaurants.How has this practice affected GDP?

A)It has increased measured GDP.
B)It has reduced measured GDP.
C)It has not affected measured GDP.
D)It has had an ambiguous effect on GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
25
Sally used to prepare her own meals,but now she eats out more.How does Sally's change of habit affect GDP?

A)It raises GDP by the additional value Sally produces during her new extra time.
B)It raises GDP by the price of the restaurant meals.
C)It raises GDP by less than the restaurant price of the meals because now Sally does not work anymore for preparing meals.
D)It raises GDP by more than the restaurant price of the meals because Sally can do something else during the extra time that she now has.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
26
How are intermediate goods treated in GDP computations?

A)They are included so we can get a measure of sales.
B)They are excluded because their value is already counted in the value of final goods.
C)They are excluded because they are too difficult to measure.
D)They are included because they are final goods for the firm producing them.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
27
Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).What is included in GDP?

A)The rent was included in GDP; the purchases of the condominiums are not included.
B)The rent was included in GDP, and so is the purchase of the condominiums.
C)The rent was not included in GDP; the purchases of the condominiums are included.
D)The rent was not included in GDP; the purchases are not included either.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
28
How is the value of housing services included in GDP?

A)It is valued as the annual depreciation of the house.
B)It is valued as the mortgage payment made on the house.
C)It uses the purchase price of the house in the year it is sold.
D)It is based on an estimate of its rental value.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
29
A professional gambler moves from a province where gambling is legal to a province where gambling is illegal.What impact does this move have on Canada's GDP?

A)It raises GDP.
B)It decreases GDP.
C)It does not change GDP because gambling is never included in GDP.
D)It does not change GDP because in either case his income is included.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
30
If a province with legalized gambling made gambling illegal,then,other things the same,what would happen to GDP?

A)It would decrease.
B)It would increase.
C)It would not change because both legal and illegal production are included in GDP.
D)It does not change because gambling is never included in GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
31
Roommates Grace and Kelly are sharing household chores and think they have an even exchange.Other things the same,if instead they paid each other for the chores the other did,what would happen to GDP?

A)It would fall.
B)It would rise.
C)It would be unaffected because paid or not, household chores are not included in GDP.
D)It would be unaffected because paid or not, household chores are included in GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
32
Which of the following is NOT included in GDP?

A)unpaid cleaning and maintenance of houses
B)services such as those provided by lawyers and hairstylists
C)final goods that are produced but not sold by the end of the year
D)production of foreign citizens living in Canada
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
33
How is flour treated in GDP terms?

A)It is counted as an intermediate good.
B)It is counted as an intermediate good if it is used by a company to make bread.
C)It is counted as a final good if it is used by a consumer who bakes bread for his own consumption.
D)It is counted as a final good.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
34
How does the value of total sales of all firms in the country for a year compare with GDP?

A)It equals GDP for the year.
B)It is larger than GDP for the year.
C)It is smaller than GDP for the year.
D)It could be larger or smaller than GDP for the year.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
35
If Susan decides to change the oil in her car herself instead of having Speedy Lube change the oil for her,what is the impact on GDP?

A)It necessarily rises.
B)It necessarily falls.
C)It will be unaffected because the same service is produced in either case.
D)It will be unaffected because car maintenance is not included in GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
36
Which of the following nonmarket goods or services is included as an estimate in Canadian GDP?

A)the value of unpaid housework
B)the value of vegetables that people grow in their gardens
C)the estimated rental value of owner-occupied homes
D)the estimated value of illegal drugs
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
37
How are intermediate goods accounted for when calculating GDP?

A)The value of all intermediate goods is included in GDP.
B)The value of intermediate goods is included in GDP only if they were produced in the previous year.
C)The value of intermediate goods is included in GDP only if they are purchased by firms rather than households.
D)The value of intermediate goods is not included in GDP unless they are part of inventory.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
38
If a province made an illegal activity such as gambling or prostitution legal,then,other things the same,what would happen to GDP?

A)It would increase.
B)It would decrease.
C)It would not change because both legal and illegal production are included in GDP.
D)It would not change because these activities are never included in GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
39
Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).Suppose the value of the condominium owners' housing services is now the same as their former rent.What happens to GDP?

A)GDP necessarily increases.
B)GDP necessarily decreases.
C)GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.
D)GDP is unaffected because previously rent was included in GDP, and now it is replaced by the estimate of the value of housing services.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
40
Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.What would this change do by itself?

A)It would make GDP fall over time.
B)It would not make any change in GDP over time.
C)It would make GDP rise over time.
D)It would change GDP, but in an uncertain direction.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
41
A Canadian company owned by a Japanese citizen has opened a sushi restaurant in Romania.Where is the profit included?

A)in Romanian GNP
B)in Canadian GDP
C)in Romanian GDP
D)in Japanese GDP
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
42
Which of the following best defines national income?

A)all income produced within a country
B)the total income earned by a nation's residents from the production of goods and services within the borders of the country
C)the total income earned by a nation's residents in the production of goods and services
D)the income received by the national government
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
43
How is gasoline treated in GDP terms?

A)It is counted as an intermediate good.
B)It is counted as a final good if a company uses it to provide transportation services.
C)It is counted as a final good if a consumer uses it to mow her yard.
D)It is counted as an intermediate good if a consumer uses it to mow a friend's yard without pay.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
44
Which of the following is included in GDP?

A)the sale of stocks and bonds
B)the estimated rental value of owner-occupied housing
C)unpaid production of goods and services at home
D)the sale of an old piece of jewellery
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
45
National income differs from net national product in that it includes business subsidies.Which of the following does national income exclude,as opposed to net national product?

A)profits of corporations
B)indirect business taxes
C)retained earnings of corporations
D)depreciation
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
46
The local Chevrolet dealership has an increase in inventory of 25 cars in 2012.How will the sale of all 25 cars in 2013 affect the GDP?

A)The value of the cars will be counted as part of GDP in 2012, but not in 2013.
B)The value of the cars will not affect the 2012 GDP, but will be included in 2013 GDP.
C)The value of the cars will be included in both 2012 and 2013 GDP.
D)The value of the cars will not be included in GDP in 2012 or 2013.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
47
Which of the following is counted in GDP?

A)the estimated value of housework
B)the value of illegally produced goods and services
C)the value of newly issued stocks and bonds
D)the estimated value of housing services
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
48
Which of the following is included in GDP?

A)the sale of stocks and bonds
B)the sale of used goods
C)the sale of services such as visits to a doctor
D)the sale of ownership in a new company
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
49
Which of the following is counted in Canadian GDP?

A)goods and services produced by Canadian citizens working in the U.S.
B)American intermediate goods used in the production of Canadian final goods
C)Canadian final goods and services purchased by the American government
D)American final goods and services purchased by the Canadian government
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
50
Anna,a Canadian citizen who works in Germany for a French firm,receives her pay in a Swiss bank.To which country's GDP does Anna's employment contribute?

A)Canada.
B)Germany
C)France
D)Switzerland
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
51
In the national income accounts,what is depreciation called?

A)total tax depreciation
B)capital consumption allowance
C)consumption of circulating capital
D)loss due to wear
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
52
George buys and lives in a newly constructed home he paid $200 000 for in 2012.He sells the house in 2013 for $225 000.How is GDP impacted?

A)The 2013 sale increases 2013 GDP by $225 000 and does nothing to 2012 GDP.
B)The 2013 sale increases 2013 GDP by $25 000 and does nothing to 2012 GDP.
C)The 2013 sale does not increase 2013 GDP and does nothing to 2012 GDP.
D)The 2013 sale increases 2013 GDP by $225 000, and 2012 GDP is revised upward by $25 000.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
53
Which of the following is included in Canadian GDP?

A)the difference in the price of the sale of an existing home and its original purchase price
B)goods produced by foreign citizens working in Canada
C)known illegal activities
D)goods produced by a Canadian company in France
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
54
How is Canadian GNP calculated from Canadian GDP?

A)by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad
B)by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada
C)by including income earned by foreigners in Canada
D)by excluding income earned by Canadian citizens abroad
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
55
How are goods that go into inventory and are not sold during the current period treated in GDP terms?

A)They are counted as intermediate goods and so are not included in current-period GDP.
B)They are counted in current GDP only if the firm that produced them sells them to another firm.
C)They are included in current-period GDP as inventory investment.
D)They are included in current-period GDP as consumption.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
56
A movie company makes 500 000 DVDs in the second quarter.It sells 300 000 of them before the end of the second quarter,and holds the others in its warehouse.How is the second quarter GDP affected?

A)The DVDs are included in second-quarter GDP.
B)The DVDs that are not purchased in the second quarter are not counted in the second-quarter GDP.
C)Since all the 500 000 DVDs will eventually be bought by consumers, they are included as consumption in the third quarter.
D)The DVDs will be counted as a change in inventory in the second quarter, and when sold in the third quarter will raise GDP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
57
Darla,a U.S.citizen,only works in Canada.How does the value added to production from her employment impact GDP and GNP?

A)It raises Canadian and U.S. GDP.
B)It raises Canadian GDP and U.S. GNP.
C)It raises Canadian GNP and U.S. GDP.
D)It raises Canadian and U.S. GNP.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
58
How is NNP calculated?

A)by subtracting savings from the total income of citizens of a nation
B)by subtracting business expenses and taxes from the total profits earned by citizens of a nation
C)by subtracting depreciation from the total income of citizens of a nation
D)by subtracting depreciation from the total profits earned by citizens of a nation
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
59
Greg,a Canadian citizen,works in the United States but lives with his family in Canada.How does his employment impact GDP and GNP?

A)He raises Canadian GDP because he spends part of his income in Canada.
B)He lowers U.S. GDP because he takes his income out of the U.S.
C)He raises Canadian GNP because he earns income abroad.
D)He lowers Canadian GNP because he earns income abroad.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
60
An Italian company opens a pasta company in Ottawa.Where are the profits from this pasta company included?

A)in both Canadian and Italian GNP
B)in both Canadian and Italian GDP
C)in Canadian GNP and Italian GDP
D)in Canadian GDP and Italian GNP
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
61
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the personal income for this economy?</strong> A)$154 B)$169 C)$170 D)$178
Refer to the Table 5-1.What is the personal income for this economy?

A)$154
B)$169
C)$170
D)$178
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
62
In the nation of Ophelia,quarterly GDP is always higher in the second quarter than in other quarters.In order to account for this predictable jump in GDP,what will Ophelia's government statisticians most likely do?

A)make sure to account for inventory changes during the second quarter
B)report real GDP, not nominal GDP
C)focus on GNP rather than GDP during the second quarter
D)make a seasonal adjustment for the second quarter data
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
63
In computing GDP,what is investment?

A)spending on stocks, bonds, and other financial assets
B)spending on real estate and financial assets
C)spending on new capital equipment, inventories, and structures, including new housing
D)spending on capital equipment, inventories, and structures, excluding household purchases of new housing
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
64
Which of the following best defines retained earnings?

A)the part of income that households retain after paying taxes
B)the part of income that businesses retain after paying taxes
C)the part of income that corporations pay to their owners in the form of dividends
D)the part of income that corporations do not pay to their owners in the form of dividends
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
65
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the personal income for this economy?</strong> A)$417 B)$367 C)$349 D)$338
Refer to the Table 5-2.What is the personal income for this economy?

A)$417
B)$367
C)$349
D)$338
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
66
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the NNP for this economy?</strong> A)$164 B)$170 C)$183 D)$192
Refer to the Table 5-1.What is the NNP for this economy?

A)$164
B)$170
C)$183
D)$192
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
67
The government reports that "GDP increased by 1.6 percent in the last quarter." What does this statement mean?

A)GDP increased at an annual rate of 6.4 percent during the last quarter.
B)GDP increased at an annual rate of 4.8 percent during the last quarter.
C)GDP increased at an annual rate of 1.6 percent during the last quarter.
D)GDP increased at an annual rate of 0.4 percent during the last quarter.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
68
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the NNP for this economy?</strong> A)$380 B)$388 C)$394 D)$405
Refer to the Table 5-2.What is the NNP for this economy?

A)$380
B)$388
C)$394
D)$405
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
69
If the government reports that "GDP has increased at an annual rate of 6.0 percent for the fourth quarter of 2013," by how much has GDP increased?

A)6.0 percent during 2013
B)24.0 percent during 2013
C)6.0 percent during the fourth quarter of 2013
D)1.5 percent during the fourth quarter of 2013
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
70
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the national income for this economy?</strong> A)$382 B)$392 C)$396 D)$398
Refer to the Table 5-2.What is the national income for this economy?

A)$382
B)$392
C)$396
D)$398
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
71
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the disposable personal income for this economy?</strong> A)$124 B)$154 C)$164 D)$170
Refer to the Table 5-1.What is the disposable personal income for this economy?

A)$124
B)$154
C)$164
D)$170
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
72
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the GNP for this economy?</strong> A)$410 B)$435 C)$440 D)$460
Refer to the Table 5-2.What is the GNP for this economy?

A)$410
B)$435
C)$440
D)$460
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
73
What is the income that households and noncorporate businesses receive called?

A)disposable personal income
B)proprietors' income
C)national income
D)personal income
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
74
In Canada,GDP is reported each quarter.How are these numbers computed?

A)These numbers are adjusted to make them measure at annual and seasonally adjusted rates.
B)These numbers are adjusted to make them annual rates, but no adjustment for seasonal variations is made.
C)These numbers are quarterly rates that have been seasonally adjusted.
D)These numbers are at quarterly rates and have not been seasonally adjusted.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
75
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the national income for this economy?</strong> A)$175 B)$185 C)$192 D)$215
Refer to the Table 5-1.What is the national income for this economy?

A)$175
B)$185
C)$192
D)$215
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
76
Table 5-2
<strong>Table 5-2   Refer to the Table 5-2.What is the disposable personal income for this economy?</strong> A)$353 B)$343 C)$278 D)$263
Refer to the Table 5-2.What is the disposable personal income for this economy?

A)$353
B)$343
C)$278
D)$263
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
77
Table 5-1
<strong>Table 5-1   Refer to the Table 5-1.What is the GNP for this economy?</strong> A)$190 B)$193 C)$207 D)$215
Refer to the Table 5-1.What is the GNP for this economy?

A)$190
B)$193
C)$207
D)$215
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
78
What does personal income include and exclude?

A)It includes retained earnings, corporate income taxes, and social insurance contributions, and excludes interest and transfer payments received by households from government.
B)It excludes retained earnings, corporate income taxes, social insurance contributions, and interest, and includes transfer payments received by households from government.
C)It excludes retained earnings, corporate income taxes, and social insurance contributions, and includes interest and transfer payments received by households from government.
D)It includes retained earnings, corporate income taxes, social insurance contributions, and interest, and excludes transfer payments received by households from government.
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
79
If GDP in the fourth quarter is announced to be $1.6 trillion,what does this number reflect?

A)the actual amount of final goods and services produced in the fourth quarter
B)about four times the annual GDP rate
C)a somewhat lower amount than the amount actually produced in the fourth quarter, because GDP is seasonally adjusted, and nonseasonally adjusted GDP for the fourth quarter is typical higher
D)about four times the amount actually produced in that quarter, plus what had been removed for seasonal adjustment
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
80
Which of the following best defines disposable personal income?

A)the income that households have left after paying taxes and nontax payments to the government
B)the income that businesses have left after paying taxes and nontax payments to the government
C)the income that households and noncorporate businesses have left after paying taxes and nontax payments to the government
D)the income that households and businesses have left after paying taxes and nontax payments to the government
Unlock Deck
Unlock for access to all 169 flashcards in this deck.
Unlock Deck
k this deck
locked card icon
Unlock Deck
Unlock for access to all 169 flashcards in this deck.