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Exam 26: Measuring Domestic Output and National Income

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Question 31

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If real GDP is 50 and nominal GDP is 100,the GDP price index is 200.

A) True
B) False

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Question 32

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In national income accounting,the consumption category of expenditures includes purchases of:

A) both new and used consumer goods.
B) consumer durable goods and consumer nondurable goods but not services.
C) consumer durable goods,consumer nondurable goods,and services.
D) changes in business inventories.

E) A) and D)
F) A) and B)

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Question 33

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Answer the question on the basis of the following data.All figures are in billions of dollars. $\begin{array}{llcc} \text {Personal Taxes } &\$40 \\ \text { Social Security Contributions} &15\\ \text {Taxes on Production and Imports } &20\\ \text {Corporate Income Taxes } &40\\ \text { Transfer Payments } &22\\ \text { U.S. Exports } &24\\ \text {Undistributed Corporate Profits } &35 \\ \text {Government Purchases } &90\\ \text { Gross Private Domestic Investment } &75\\ \text { U.S. Imports } &22\\ \text {Personal Consumption Expenditures } &250\\ \text {Consumption of Fixed Capital } &25\\ \text { Net Foreign Factor Income } &10\\ \text {Statistical Discrepancy } &0\\\end{array}$ Refer to the data.NI is:

What is the difference between national income and personal income?

In an economy experiencing a persistently falling price level:

Gross domestic product (GDP) measures and reports output:

The total amount of income earned by U.S.resource suppliers in a year,plus taxes on production and imports,is measured by:

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

Assume an economy that makes only one product and that year 3 is the base year.Output and price data for a five-year period are as follows.Answer the question on the basis of these data. $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\1 \\2 \\3 \\4 \\5\end{array}\begin{array}{c}\text { Units of}\\\underline{\text { Output}}\\3 \\4 \\6 \\7 \\8\end{array}\begin{array}{c}\text { Price Per } \\\underline{\text { Unit } }\\ \$ 3 \\4 \\5 \\7 \\8\end{array}\end{array}$ Refer to the data.For the years shown,the growth of:

If depreciation exceeds gross investment:

Use the following table for a hypothetical single-product economy. $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\ 1 \\2 \\3 \\4\end{array}\begin{array}{c}\text {Units of}\\\underline{\text { Output}}\\10\\12\\15\\20\end{array}\begin{array}{c}\text { Price of Bagel}\\\underline{\text { Per Unit}}\\\$ 10\\20\\ 30\\ 40\end{array}\begin{array}{c}\text {Price Index}\\\underline{\text {( Year 1=100) }}\\100\\200\\300\\400\end{array}\end{array}$ Refer to the data.Nominal GDP in year 4 is:

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 for the base year,in year 3 nominal GDP and real GDP,respectively,are:

Alejandro Scoobertini owns a store specializing in soccer jerseys.In 2012,he purchased $150,000 worth of jerseys from manufacturers,employed one worker for $40,000,purchased $20,000 worth of supplies from an office supply store,and sold jerseys for $280,000.Based on this information,what was the value added at Alejandro's store in 2012?

Historically,real GDP has increased less rapidly than nominal GDP because:

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.The gross domestic product is:

Consumption of fixed capital (depreciation) can be determined by:

A price index is:

If real GDP in a particular year is $80 billion and nominal GDP is $240 billion,the GDP price index for that year is:

Answer the question on the basis of the following national income data for the economy.All figures are in billions of dollars. $\begin{array} { l r } \text { Personal Consumption Expenditures } & \$ 400 \\\text { Government Purchases } & 128 \\\text { Gross Private Domestic Investment } & 88 \\\text { Net Exports } & 7 \\\text { Net Foreign Factor Income } & 0 \\\text { Consumption of Fixed Capital } & 43 \\\text { Taxes on Production and Imports } & 50 \\\text { Compensation of Employees } & 369 \\\text { Rents } & 12 \\\text { Interest } & 15 \\\text { Proprietors' Income } & 52 \\\text { Corporate Income Taxes } & 36 \\\text { Dividends } & 24 \\\text { Undistributed Corporate Profits } & 22 \\\text { Statistical Discrepancy } & 0\end{array}$ Refer to the data.Net domestic product is:

By summing the dollar value of all market transactions in the economy,we would: