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Exam 10: Measuring a Nations Income

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Question 71

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Table 10-4 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.Prices and Quantities $\begin{array} { c c c c c } \text { Year } & \text { Price af Cereal } & \begin{array} { c } \text { Quantity af } \\\text { Cereal }\end{array} & \text { Price af Millz } & \begin{array} { c } \text { Quantity df } \\\text { Mill }\end{array} \\\hline 2008 & \$ 4.00 & 90 & \$ 1.50 & 150 \\2009 & \$ 4.00 & 100 & \$ 2.00 & 180 \\2010 & \$ 5.00 & 120 & \$ 2.50 & 200 \\2011 & \$ 6.00 & 150 & \$ 3.50 & 200\end{array}$ -Refer to Table 10-4. In 2010, this country's

A) real GDP was $780, and the GDP deflator was 141.0.
B) real GDP was $825, and the GDP deflator was 133.3.
C) real GDP was $780, and the GDP deflator was 133.3
D) real GDP was $825, and the GDP deflator was 141.0

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Question 72

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If consumption is $4000, exports are $300, government purchases are $1000, imports are $400, and investment is $800, then GDP is $5700.

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Question 73

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Table 10-3 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $\begin{array} { c c c } \hline \text { Year } & \begin{array} { c } \text { Nominal } \\\text { GDP }\end{array} & \text { Real GDP } \\\hline 1929 & 103.6 & 977 \\1930 & 91.2 & 892.8 \\1931 & 76.5 & 834.9 \\1932 & 58.7 & 725.8 \\\hline\end{array}$ -Refer to Table 10-3. What was the growth rate of real GDP for 1931?

Which of the following statements about GDP is correct?

You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully.

Table 10-1 The table below contains data for country A for the year 2010. $\begin{array}{|l|l|}\hline \text { Household purchases of durable goods } & \$ 1293 \\\hline \text { Household purchases of nondurable goods } & \$ 1717 \\\hline \text { Household purchases of services } & \$ 301 \\\hline \text { Household purchases of new housing } & \$ 704 \\\hline \text { Purchases of capital equipment } & \$ 310 \\\hline \text { Inventory changes } & \$ 374 \\\hline \text { Purchases of new structures } & \$ 611 \\\hline \text { Depreciation } & \$ 117 \\\hline \text { Salaries of government workers } & \$ 1422 \\\hline \text { Government expenditures on public works } & \$ 553 \\\hline \text { Transfer payments } & \$ 777 \\\hline \text { Foreign purchases of domestically produced goods } & \$ 88 \\\hline \text { Domestic purchases of foreign goods } & \$ 120 \\\hline\end{array}$ -Refer to Table 10-1. What were country A's imports in 2010?

If total spending rises from one year to the next, then which of the following could not be true?

In 2009, government purchases was the largest component of U.S. GDP.

In the actual economy, households

Table 10-3 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $\begin{array} { c c c } \hline \text { Year } & \begin{array} { c } \text { Nominal } \\\text { GDP }\end{array} & \text { Real GDP } \\\hline 1929 & 103.6 & 977 \\1930 & 91.2 & 892.8 \\1931 & 76.5 & 834.9 \\1932 & 58.7 & 725.8 \\\hline\end{array}$ -Refer to Table 10-3. If prices had remained constant between 1929 and 1930, GDP would have decreased

Table 10-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.Prices and Quantities $\begin{array} { c c c c c } \text { Year } & \text { Price of } & \text { Quantity af } & \text { Price af } & \text { Quantity af } \\& \text { Waffles } & \text { Waffles } & \text { Pancalkes } & \text { Pancalkes } \\\hline 2008 & \$ 2.00 & 100 & \$ 1.00 & 100 \\2009 & \$ 2.00 & 120 & \$ 2.00 & 150 \\2010 & \$ 2.00 & 150 & \$ 3.00 & 200 \\2011 & \$ 4.00 & 180 & \$ 3.00 & 220\end{array}$ -Refer to Table 10-6. This country's inflation rate from 2010 to 2011 was

Table 10-5 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009.Prices and Quantities $\begin{array} { c c c c c } \hline \text { Year } & \begin{array} { c } \text { Price af } \\\text { Mavies }\end{array} & \begin{array} { c } \text { Quantity af } \\\text { Mavies }\end{array} & \begin{array} { c } \text { Price af } \\\text { Popcarn }\end{array} & \begin{array} { c } \text { Quantity df } \\\text { Papentn }\end{array} \\\hline 2008 & \$ 10.00 & 400 & \$ 5 & 800 \\2009 & 11.00 & 500 & \$ 4 & 900 \\2010 & \$ 12.00 & 600 & \$ 5 & 1000 \\2011 & \$ 12.00 & 600 & \$ & 900\end{array}$ -Refer to Table 10-5 What was this country's GDP deflator in 2010?

If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number.

In the United States in 2009, government purchases of goods and services were

A recession has traditionally been defined as a period during which

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

Countries with low GDP per person tend to have

Recently, the U.S. national income accounts have switched to calling government purchases

If an economy's GDP rises, then it must be the case that the economy's

Otherwise legal transactions that go unreported or unrecorded are called