Question 1

One In the News article states that the underground economy includes transactions that are untaxed or unaccounted for in GDP.According to this article,the underground economy

Accepted Answer

A)  Involves a small percentage of households.
B)  Includes only illegal transactions.
C)  Is captured in GDP.
D)  Impacts the amount of tax dollars collected.

Question 2

Goods produced for the purpose of producing other goods are known as

Accepted Answer

A)  Services.
B)  Exports.
C)  Consumption goods.
D)  Investment goods.

Question 3

The increase in the market value of a good at a particular stage of production is known as

Accepted Answer

A)  Profit.
B)  Value added.
C)  Cost based accounting.
D)  The input price.

Question 4

The purpose of chain-weighted price adjustments in the calculation of GDP is to

Accepted Answer

A)  Adjust for changes in relative prices.
B)  Adjust for changes in average prices.
C)  Adjust for changes in production.
D)  Convert NDP to GDP.

Question 5

Disposable income is equal to

Accepted Answer

A)  Personal taxes + personal income.
B)  Personal taxes - personal income.
C)  Consumption - saving.
D)  Consumption + saving.

Question 6

If depreciation exceeds gross investment,

Accepted Answer

A)  Net investment exceeds depreciation.
B)  Gross investment is negative.
C)  The difference between GDP and NDP is smaller than gross investment.
D)  The nation's capital stock is being depleted.

Question 7

National income is a measure of

Accepted Answer

A)  How well the economy is doing on a gross basis.
B)  The income earned by the factors of production in producing GDP.
C)  The income received by the factors of production plus depreciation.
D)  The country's future productive capacity.

Question 8

Net domestic product (NDP) is determined by

Accepted Answer

A)  Subtracting depreciation from GDP.
B)  Adding consumption,investment,government expenditures,and net exports.
C)  Adding appreciation to GDP.
D)  Subtracting consumption from GDP.

Question 9

Value added is the

Accepted Answer

A)  Addition to GDP because nonmarket activities are captured.
B)  Increase in market value of a product that takes place at each stage of the production process.
C)  Difference between nominal GDP and real GDP.
D)  Impact on third parties caused by market activities.

Question 10

GDP is geographically focused,including all output produced within a nation's borders.

Accepted Answer

A) True 
 B)False

Question 11

Use the following table to answer the questions : Table 5.3:  
-On the basis of Table 5.3,the value of the income aggregate that is defined as "income received by households before payment of personal taxes" (also known as personal income) is

Accepted Answer

A)  $5,870 billion.
B)  $10,070 billion.
C)  $9,570 billion.
D)  $10,600 billion.

Question 12

The value of final output produced in a given period,measured in current prices,is

Accepted Answer

A)  Real GDP.
B)  Nominal GDP.
C)  NDP.
D)  GNP.

Question 13

Use the following table to answer the questions : Table 5.3:  
-On the basis of Table 5.3,the net addition to the capital stock is

Accepted Answer

A)  $1,000 billion.
B)  $400 billion.
C)  $1,400 billion.
D)  $370 billion.

Question 14

The economic definition of investment includes all of the following except

Accepted Answer

A)  Residential construction.
B)  Net changes in business inventory.
C)  Spending for plants and capital equipment.
D)  A retirement portfolio of stocks and bonds.

Question 15

Which of the following items is definitely part of the underground economy?

Accepted Answer

A)  Payments to family members for performing household tasks.
B)  Income from legal pursuits.
C)  Unreported income.
D)  Child care services provided by a legitimate company.

Question 16

Which of the following would be included in U.S.GNP but not in U.S.GDP?

Accepted Answer

A)  The tips received by a waiter in New Jersey.
B)  Auto parts produced by a Japanese-owned firm operating in North Carolina.
C)  Sales of used cars in the United States.
D)  Chipsets produced by U.S.-owned firms operating in China.

Question 17

What is the difference between GDP and GNP?

Accepted Answer

GDP is the market value of all final goo...

Question 18

Use the following table to answer the questions : Table 5.3:  
-On the basis of Table 5.3,the value of the income aggregate that is defined as "after-tax income of consumers" (also known as disposable income) is

Accepted Answer

A)  $8,570 billion.
B)  $10,070 billion.
C)  $11,570 billion.
D)  $10,600 billion.

Question 19

Are there any measurement problems that occur with the GDP calculation? Explain.

Accepted Answer

GDP measures the value of output that is...

Question 20

Use the following table to answer the questions : Table 5.1: 
-On the basis of Table 5.1,depreciation is

Accepted Answer

A)  $640 billion.
B)  $50 billion.
C)  $85 billion.
D)  $690 billion.

Exam 5: National Income Accounting

Are there any measurement problems that occur with the GDP calculation? Explain.

Correct AnswerverifiedGDP measures the value of output that is...View AnswerShow Answer

Goods produced for the purpose of producing other goods are known as

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Use the following table to answer the questions : Table 5.3: -On the basis of Table 5.3,the value of the income aggregate that is defined as "income received by households before payment of personal taxes" (also known as personal income) is

Correct AnswerverifiedShow Answer

Use the following table to answer the questions : Table 5.3: -On the basis of Table 5.3,the value of the income aggregate that is defined as "after-tax income of consumers" (also known as disposable income) is

Correct AnswerverifiedShow Answer

The increase in the market value of a good at a particular stage of production is known as

Correct AnswerverifiedShow Answer

Use the following table to answer the questions : Table 5.3: -On the basis of Table 5.3,the net addition to the capital stock is

Correct AnswerverifiedShow Answer

What is the difference between GDP and GNP?

Correct AnswerverifiedGDP is the market value of all final goo...View AnswerShow Answer

GDP is geographically focused,including all output produced within a nation's borders.

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One In the News article states that the underground economy includes transactions that are untaxed or unaccounted for in GDP.According to this article,the underground economy

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Which of the following items is definitely part of the underground economy?

Correct AnswerverifiedShow Answer

The purpose of chain-weighted price adjustments in the calculation of GDP is to

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Which of the following would be included in U.S.GNP but not in U.S.GDP?

Correct AnswerverifiedShow Answer

The economic definition of investment includes all of the following except

Correct AnswerverifiedShow Answer

National income is a measure of

Correct AnswerverifiedShow Answer

If depreciation exceeds gross investment,

Correct AnswerverifiedShow Answer

The value of final output produced in a given period,measured in current prices,is

Correct AnswerverifiedShow Answer

Net domestic product (NDP) is determined by

Correct AnswerverifiedShow Answer

Value added is the

Correct AnswerverifiedShow Answer

Disposable income is equal to

Correct AnswerverifiedShow Answer

Use the following table to answer the questions : Table 5.1: -On the basis of Table 5.1,depreciation is

Correct AnswerverifiedShow Answer

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GDP measures the value of output that is...
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GDP is the market value of all final goo...
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