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Exam 26: Measuring Domestic Output and National Income

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Question 21

True/False

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The purchase of Walmart stock is a part of gross investment,but not of net investment.

A) True
B) False

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Question 22

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

A) both new and used consumer goods.
B) automobiles for personal use but not houses.
C) consumer durable and nondurable goods but not services.
D) consumer nondurable goods and services but not consumer durable goods.

E) All of the above
F) A) and D)

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Question 23

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The value of U.S.imports is:

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

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.U.S.imports are:

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,in years 1 and 3 the price index values,respectively,are:

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.Real GDP in year 4 is:

Real GDP is:

The system that measures the economy's overall performance is formally known as:

In a typical year,which of the following measures of aggregate output and income is likely to be the smallest?

The fact that nominal GDP has risen faster than real GDP:

Nominal GDP is:

Corporate profits are found by:

If nominal GDP in some year is $280 and real GDP is $160,then the GDP price index for that year is:

The U.S.government agency responsible for compiling the national income accounts is the:

Real GDP measures:

In determining GDP by the expenditures method,it is appropriate to use net investment rather than gross investment as a measure of investment spending.

If intermediate goods and services were included in GDP:

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 consumption expenditures:

If depreciation (consumption of fixed capital) exceeds gross domestic investment,we can conclude that: