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Exam 23: Measuring a Nations Income

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Question 211

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Which of the following is not included in U.S.GDP?

A) unpaid cleaning and maintenance of houses
B) services such as those provided by lawyers and hair stylists
C) the estimated rental value of owner-occupied housing
D) production of foreign citizens living in the United States

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Question 212

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Suppose an economy produces only cheese and fish.In 2010,20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each.In 2009,the base year,the price of cheese was $10 per unit and the price of fish was $75 per unit.For 2010,

A) nominal GDP is $500,real GDP is $800,and the GDP deflator is 62.5.
B) nominal GDP is $500,real GDP is $800,and the GDP deflator is 160.
C) nominal GDP is $800,real GDP is $500,and the GDP deflator is 62.5.
D) nominal GDP is $800,real GDP is $500,and the GDP deflator is 160.

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Question 213

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A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

An increase in nominal U.S.GDP necessarily implies that the United States is producing a larger output of goods and services.

GDP per person tells us the income and expenditure of the

If consumption is $4000,exports are $300,government purchases are $1000,imports are $400,and investment is $800,then GDP is $5700.

Consumption is $5.5 trillion,investment is $1 trillion,government expenditures are $1.5 trillion,transfer payments are $.5 trillion,exports are $.75 trillion and imports are $1.25 trillion.What is GDP?

Expenditures on a nation's domestic production

Consumption is $7 trillion,investment is $1.5 trillion,government expenditures are $2 trillion,government transfer payments are $1 trillion,exports are $1.50 trillion and imports are $1.25 trillion.What is GDP?

The value of goods added to a firm's inventory in a certain year is treated as

A U.S.-owned car factory in Mexico produces $5 million of cars.$2.5 million of these cars are sold in Mexico and the other $2.5 million are sold in the U.S.In both cases $1 million of the value of the cars was due to U.S-owned equipment located in Mexico and U.S.managers working in Mexico.How much did this production contribute to U.S.GDP?

In the economy of Ukzten in 2010,consumption was $800,GDP was $2000,government purchases were $400,and investment was $600.What were Ukzten's net exports in 2010?

Michigan Tea Company sold $15 million worth of tea it produced.In producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in Canada but commute to the U.S.$1 million.How much did these transactions add to U.S.GDP?

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit.Production of good A contributes

Consider the following three items of spending by the government: (i) the federal government pays a $500 unemployment benefit to an unemployed person; (ii) the federal government makes a $2,000 salary payment to a Navy lieutenant; (iii) the city of Bozeman,Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman.Which of these payments contributes directly to government purchases in the national income accounts?

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities.It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000.How much do these actions add to GDP?

GDP is equal to

If nominal GDP is $10,000 and real GDP is $8,000,then the GDP deflator is 125.

One bag of flour is sold for $1.00 to a bakery,which uses the flour to bake bread that is sold for $3.00 to consumers.A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00.Taking these four transactions into account,what is the effect on GDP?

A U.S.citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens.In which of the following components of U.S.GDP is this transaction accounted for?