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Exam 26: Measuring Domestic Output and National Income

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Question 41

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Answer the question on the basis of the following information: $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\1 \\2 \\3 \\4 \\5\end{array}\begin{array}{c}\text { Nominal}\\\underline{\text { GDP } }\\ \$ 550 \\560 \\576 \\586 \\604\end{array}\begin{array}{c}\text { Price}\\\underline{\text { Index}}\\140 \\135 \\120 \\117 \\108\end{array}\end{array}$ In the economy above:

A) the price level is rising faster than nominal GDP.
B) nominal and real GDP are growing at the same rate.
C) the growth of nominal GDP understates the growth of real GDP.
D) the growth of nominal GDP overstates the growth of real GDP.

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Question 42

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In calculating GDP,governmental transfer payments,such as Social Security or unemployment compensation,are:

A) not counted.
B) counted as investment spending.
C) counted as government spending.
D) counted as consumption spending.

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Question 43

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Personal income usually exceeds disposable income.

A nation's gross domestic product (GDP) :

Value added refers to:

Which of the following is a final good or service?

In comparing GDP data over a period of years,a difference between nominal and real GDP may arise because:

Which of the following best defines disposable income?

Answer the question on the basis of the following data.All figures are in billions of dollars. $\begin{array}{llcc} \text { Gross Private Domestic Investment} & \$46 \\ \text { Exports of the U.S. } &9\\ \text {Disposable Income } &190\\ \text { Personal Saving } &10\\ \text {Government Purchases } &84\\ \text { Net Foreign Factor Income } &10\\ \text { Consumption of Fixed Capital } &52 \\ \text {Dividends } &13\\ \text { Imports of the U.S.} &12\\ \text {Taxes on Production and Imports } &22\\ \text { Personal Taxes} &38\\ \text {Social Security Contributions } &23\\ \text { Statistical Discrepancy} &0\end{array}$ Refer to the data.The net domestic product is:

The simplest way to calculate GDP is to sum the total sales of all business firms.

Assume an economy that is producing only one product.Output and price data for a three-year period are as follows.Answer the question on the basis of these data. $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\1 \\2 \\3\end{array}\begin{array}{c}\text { Units of}\\\underline{\text {Output}}\\20\\25\\30\end{array}\begin{array}{c}\text {Price Per}\\\underline{\text {Unit}}\\ \$ 4 \\4\\6 \end{array}\end{array}$ Refer to the data.If year 2 is chosen as the base year,real GDP for year 1 is:

If nominal GDP rises:

Answer the question on the basis of the following data.All figures are in billions of dollars. $\begin{array} { l r } \text { Gross Investment } & \$ 18 \\\text { National Income } & 100 \\\text { Net Exports } & 2 \\\text { Personal Income } & 85 \\\text { Personal Consumption Expenditures } & 70 \\\text { Saving } & 5 \\\text { Government Purchases } & 20 \\\text { Net Domestic Product } & 105 \\\text { Statistical Discrepancy } & 0\end{array}$ Refer to the data.Consumption of fixed capital is:

Transfer payments are included in:

Which of the following is a source of data for the consumption component of the U.S.GDP?

Which of the following transactions would be included in GDP?

Value added can be determined by:

Suppose that inventories were $80 billion in 2012 and $70 billion in 2013.In 2013,national income accountants would:

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Answer the question on the basis of the following national income data.All figures are in billions of dollars. $\begin{array} { l r } \text { Personal Taxes } & \$ 23 \\\text { Net Private Domestic Investment } & 33 \\\text { Net Exports } & 6 \\\text { National Income } & 278 \\\text { U.S. Exports } & 20 \\\text { Gross Private Domestic Investment } & 56 \\\text { Disposable Income } & 220 \\\text { Taxes on Production and Imports } & 32 \\\text { Undistributed Corporate Profits } & 15 \\\text { Proprietors' Income } & 45 \\\text { Net Foreign Factors Income } & 0 \\\text { Statistical Discrepancy } & 0\end{array}$ Refer to the data.Personal income is: