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Exam 5: National Income Accounting

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Question 31

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$\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 4,565 \\\hline \text { Exports } & \$ 740 \\\hline \text { Government purchases of goods and services } & \$ 1,465 \\\hline \text { Social Security taxes } & \$ 510 \\\hline \text { Net investment } & \$ 225 \\\hline \text { Indirect business taxes } & \$ 520 \\\hline \text { Imports } & \$ 825 \\\hline \text { Gross investment } & \$ 865 \\\hline \text { Corporate income taxes } & \$ 185 \\\hline \text { Personal income taxes } & \$ 750 \\\hline \text { Corporate retained earnings } & \$ 45 \\\hline \text { Net foreign factor income } & \$ 20 \\\hline \text { Government transfer payments to households } & \$ 690 \\\hline \text { Net interest payments to households } & \$ 0 \\\hline\end{array}$ Table 5.1 National Income Accounts (dollar figures are in billions) On the basis of Table 5.1,gross domestic product is

A) $6,980 billion.
B) $7,635 billion.
C) $6,810 billion.
D) $7,720 billion.

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Question 32

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The economic definition of investment includes all of the following except

A) Residential construction.
B) Net changes in business inventory.
C) Spending for plants and capital equipment.
D) A retirement portfolio of stocks and bonds.

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Question 33

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$\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 8,200 \\\hline \text { Exports } & \$ 1,700 \\\hline \text { Government purchases of goods and services } & \$ 2,500 \\\hline \text { Social Security taxes } & \$ 1,900 \\\hline \text { Net investment } & \$ 1,400 \\\hline \text { Indirect business taxes } & \$ 1,400 \\\hline \text { Imports } & \$ 1,900 \\\hline \text { Gross investment } & \$ 1,800 \\\hline \text { Corporate income taxes } & \$ 600 \\\hline \text { Personal income taxes } & \$ 1,500 \\\hline \text { Corporate retained earnings } & \$ 130 \\\hline \text { Net foreign factor income } & \$ 100 \\\hline \text { Government transfer payments to households } & \$ 1,600 \\\hline \text { Net interest payments to households } & \$ 500 \\\hline\end{array}$ Table 5.3 National Income Accounts (dollar figures are in billions) On the basis of Table 5.3,the value of the income aggregate that is defined as "total income earned by current factors of production" (also known as national income) is

A cartoon in the text shows two people watching television.On the screen are the words "Economic growth indicators are up,led by car repairs,divorce costs,open-heart surgeries,and toxic waste cleanups." The cartoon illustrates the

According to the economy in Figure 5.3,net exports

A furniture factory produces dining room sets.The lumber it purchases from the lumberyard is a/an

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

Net exports are

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

The GDP per capita is the most practical way to

Disposable income is

$\begin{array}{|l|r|}\hline \text { Expenditures for consumer goods and services } & \$ 4,565 \\\hline \text { Exports } & \$ 740 \\\hline \text { Government purchases of goods and services } & \$ 1,465 \\\hline \text { Social Security taxes } & \$ 510 \\\hline \text { Net investment } & \$ 225 \\\hline \text { Indirect business taxes } & \$ 520 \\\hline \text { Imports } & \$ 825 \\\hline \text { Gross investment } & \$ 865 \\\hline \text { Corporate income taxes } & \$ 185 \\\hline \text { Personal income taxes } & \$ 750 \\\hline \text { Corporate retained earnings } & \$ 45 \\\hline \text { Net foreign factor income } & \$ 20 \\\hline \text { Government transfer payments to households } & \$ 690 \\\hline \text { Net interest payments to households } & \$ 0 \\\hline\end{array}$ Table 5.1 National Income Accounts (dollar figures are in billions) On the basis of Table 5.1,personal income is

Which of the following typically purchases the most goods and services in the U.S.economy?

Inflation is

Which of the following would be included in U.S.GNP but not in U.S.GDP?

Which of the following is not a final good or service?

An economy's production possibilities are most likely to expand if

A nation's capital stock will decline,ceteris paribus,for all of the following reasons except

The dollar value of output for an economy must always equal the dollar value of income. This must be true because each dollar of spending is ultimately assigned to one of the four factors of production.

If one added up the value of all intermediate goods that went into the production of real GDP,the total value of intermediate goods would be