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Exam 5: National Income Accounting

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Question 21

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Real GDP is used most effectively to

A) Measure how much income households receive.
B) Measure how much output can be consumed on a sustainable basis.
C) Make international comparisons of the standard of living.
D) Analyze the growth rate of the economy over time.

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

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Question 22

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The value of final output produced in a given period,measured in current prices,is

A) Real GDP.
B) Nominal GDP.
C) NDP.
D) GNP.

E) A) and B)
F) None of the above

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Question 23

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If for a given year gross investment is $300 billion and depreciation is $75 billion,then,for that year,the capital stock __________ and net investment was ________.

Which of the following statements is true?

The measure of the part of disposable income that is not consumed is

Suppose the total market value of all the final goods and services produced in the country of Cannedada was $4 billion in 2008 (measured in 2008 prices) and $5 billion in 2009 (measured in 2009 prices) .Which of the following statements is definitely correct?

One In the News article titled "A Lot Going on Under the Table" reports that 83 percent of households make untaxed or unmeasured purchases.This is an example of

A nation's GDP can be calculated as

$\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 2,850 \\\hline \text { Exports } & \$ 300 \\\hline \text { Government purchases of goods and services } & \$ 810 \\\hline \text { Social Security taxes } & \$ 295 \\\hline \text { Net investment } & \$ 510 \\\hline \text { Indirect business taxes } & \$ 445 \\\hline \text { Imports } & \$ 450 \\\hline \text { Gross investment } & \$ 700 \\\hline \text { Corporate income taxes } & \$ 190 \\\hline \text { Personal income taxes } & \$ 875 \\\hline \text { Corporate retained earnings } & \$ 210 \\\hline \text { Net foreign factor income } & \$ 0 \\\hline \text { Government transfer payments to households } & \$ 780 \\\hline \text { Net interest payments to households } & \$ 20 \\\hline\end{array}$ Table 5.2 National Income Accounts (dollar figures are in billions) On the basis of Table 5.2,depreciation is

Savings equal the difference between personal income and consumption. Savings equal the difference between disposable income and consumption.

If real GDP in 2005 is $8,000 billion and the price level is 125,what is nominal GDP in 2005?

An economy's production possibilities curve indicates

Social Security payments to retired persons are included in

Nominal GDP is not used to determine recessions because inflation can disguise the occurrence of recessions. Inflation can make it seem like production is rising when it is not.

The base period is the time period used for comparative analysis. We can use the base period to express GDP in constant dollars.

Ceteris paribus,if imports increase in any given year,

Without foreign trade,the dollars used to buy goods and services are included in the circular flow as consumption,investment,and government spending. As income is used to buy goods and services,the money spent is counted as consumption,investment,and government spending in the circular flow.

The measure of what households receive after personal income tax is deducted is

Which of the following items is definitely part of the underground economy?

Suppose you volunteer to help clean up your neighborhood,and the only payment you receive is the sense of goodwill that develops with your neighbors.Your efforts cause the GDP of the economy to