HW 4 GDP – Flashcards
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The country's real GDP declined between years:
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3 and 4
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Suppose the total monetary value of all final goods and services produced in a particular country in 2010 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that:
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GDP in 2010 is $500 billion.
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Refer to the above data. If year 2 is the base year, then Real GDP in year 5 is:
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$60
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A nation's gross domestic product (GDP):
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is the dollar value of all final output produced within the borders of the nation during a specific period of time.
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If nominal GDP is 150 and the GDP price index is 200, real GDP is 75.(true/false)
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true
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Government purchases include government spending on:
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Correct government consumption goods and public capital goods.
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The purchase of Walmart stock is a part of gross investment, but not of net investment.(true/false)
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False
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Refer to the diagram. The base year used in determining the price indices for this economy:
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is 2000.
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Real GDP measures:
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current output at base year prices.
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To avoid multiple counting in national income accounts:
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Only final goods and services should be counted
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Nominal GDP is adjusted for price changes through the use of:
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the GDP price index.
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Which of the following represents an income flow in the circular flow of domestic output and national income?
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Corporate profits
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Refer to the above data. Real GDP increased from year 3 to year 4 by approximately:
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$68 billion
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The largest component of national income is:
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compensation of employees.
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Assume that in 2002 the nominal GDP was $350 billion and in 2003 it was $375 billion. On the basis of this information, we:
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cannot make a meaningful comparison of the economy's performance in 2002 relative to 2003.
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If real GDP rises and the GDP price index has increased:
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nominal GDP must have increased.
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If intermediate goods and services were included in GDP:
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the GDP would be overstated.
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The simplest way to calculate GDP is to sum the total sales of all business firms.(true/false)
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False
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The GDP tends to:
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understate economic welfare because it does not take into account increases in leisure.
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Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. (Advanced analysis) Refer to the information. If the per unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then real GDP in the current year is:
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$45
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Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. Refer to the information. Nominal GDP in the current year is:
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$115
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Refer to the above data. In year 4, nominal GDP would be:
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$90
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The two ways of looking at GDP are the:
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Expenditures approach and income approach
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Final goods and services refer to:
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goods and services purchased by ultimate users, rather than for resale or further processing.
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The largest component of total expenditures in the United States is:
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consumption.
