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Exam 8: Gdp: Measuring Total Production and Income

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Question 21

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The GDP deflator is the

A) difference between real GDP and nominal GDP multiplied by 100.
B) difference between nominal GDP and real GDP divided by 100.
C) ratio of real GDP to nominal GDP multiplied by 100.
D) ratio of nominal GDP to real GDP multiplied by 100.

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

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Question 22

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Consumption expenditures do not include household purchases of

A) medical care.
B) education.
C) new houses.
D) durable goods.

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

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Question 23

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If prices are rising on average,then

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

In a small economy,consumption spending is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Debbie makes porcelain plates in her home and sells them to the Opus gallery.She spent $400 last month on supplies and made 50 plates.She sold the plates to the gallery at $25 per plate.The gallery sells all the plates for $40 each.For all of the 50 plates,what is Debbie's total value added? For all the 50 plates,what is the gallery's total value added?

Which of the following is not directly counted in GDP?

In 2015,the U.S.auto industry experienced rising sales.The automobile industry was experiencing the effects of

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Which of the following is not an example of a transfer payment?

Investment,as defined by economists,would include the purchase of a

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Residential investment includes spending by firms on office buildings.

Which of the following equations correctly measures GDP in an economy?

Table 8-22 2011 2015 2016 -Refer to Table 8-22.Consider the data above for a simple economy: Using 2011 as the base year,calculate nominal GDP,real GDP,and the GDP deflator for 2016.Show your work.

If the value added of a firm is positive,will the firm necessarily have positive profits?