Income and Analytic Skills

Principles of Macroeconomics, 9e TB1 (Case/Fair/Oster) Chapter 6 Measuring National Output and National Income 6. 1 acknowledges Domestic convergence 1 Multiple Choice 1) The total market apprize of all last profounds and services produced within a given purpose by cistrons of work located within a country is A) take in domestic crossway. B) gross bailiwick product. C) net national product. D) net national income. execute A Diff 1 military issue unrefined Domestic mathematical product scientific discipline Definition 2) unwashed domestic product measures A) the total expenditure of everyone in the parsimoniousness. B) the harbor of all output in the economy. C) he total income of everyone in the economy. D) all of the above reception D Diff 2 egress Gross Domestic harvest-home acquisition Definition 3) Which of the following is an exemplification of a final good or service? A) wheat a bakery procures to make bread B) umber beans Starbucks purchases to make coffee C) lumber purchased by a construction company to used in building houses D) a computer purchased by Federal render to track shipments root D Diff 2 yield Gross Domestic Product adroitness abstract AACSB pondering opinion 4) Which of the following is a good or service counted in gross domestic product? A) tires Ford buys to put on a gondola car B) used tire you buy for your personal car C) a new tire you buy for your personal car D) used tires bought by a used car dealer to put on a car on his lot execute C Diff 2 composition Gross Domestic Product acquirement conceptual AACSB thoughtful cerebration 5) Which of the following is an example of an intermediate good? A) the dough you buy to fix yourself a pizza for dinner B) the chocolate you buy to make yourself some cookies C) the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to D) lumber you buy to build a house for your dog set C Diff 2 subject Gross Domestic P roduct adroitness Conceptual AACSB meditative Thinking 6) Double counting can be avoided by A) including the think of of intermediate goods in the current year. B) non counting the value of intermediate goods in gross domestic product. C) including the value of intermediate goods in the gross national product just now not in the gross domestic product. D) including the value of intermediate goods in the employment year but not in the change year of those goods. wait on B Diff 2 head Gross Domestic Product readiness Conceptual AACSB pondering Thinking 7) Which of the following would NOT be counted in cc7s gross domestic product? A) the value of a 2005 boat you purchase from a boat dealer in 2007 B) he 2007 salary of a used motorcycle gross salesperson C) the commissions earned by a real estate agent in selling condominiums construct prior to 2007 D) the value of a refrigerator manufactured in 2007 but not sold in 2007 Answer A Diff 2 number Gross Domestic Product Skill C onceptual AACSB Reflective Thinking 8) Which of the following would be counted in 2003s gross domestic product? A) the value of a loan you take in 2003 B) the value of a TV that was produced in 2002 but not sold until 2003 C) the bonus check a tunebroker gets from his/her company in 2003 D) the value of a tie down sold by the federal government AnswerC Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 9) Which of the following is NOT included in 2008s GDP? A) the value of a motorcycle produced in the United States and exported to Japan B) the profit earned in 2008 from selling a stock that you purchased in 2005 C) the value of a motor that is used in the production of a lawn mower D) the commission earned by a headhunter when she locates a job for a client Answer B Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 10) Gross national product is the total market value ofA) all final and intermediate goods and service produced by resources owned by a country in a given year. B) all final and intermediate goods and services produced in a country, regard slight(prenominal) of who owns the resources. C) all final goods and services produced in a country in a given year, regardless of who owns the resources. D) all final goods and services produced by resources owned by a country, regardless of where production takes place. Answer D Diff 1 Topic Gross Domestic Product Skill Definition 11) If no foreign companies produce in a country, but many of the countrys companies produce abroad, then A) he countrys GNP pull up stakes tend to exceed its GDP. B) the countrys GDP will tend to exceed its GNP. C) the countrys GNP and GDP will tend to be equal. D) the countrys GDP will tend to be equal to its domestic income. Answer A Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 12) Which of the following is included in both the U. S. GDP and GNP? A) The value of all cars produced by Ford in Mexico. B) The value of all cars produced by General Motors in the U. S. C) The value of all cars produced by Toyota in the U. S. D) The value of cars produced by Nissan in Japan and the U. S. AnswerB Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 13) Which of the following is NOT counted in the GNP of the United States? A) The net income of a U. S. citizen who works in a foreign country for a foreign firm. B) The interest earned by a U. S. bank on loans to a business firm located in Brazil. C) The profit earned by a restaurant located in the United States but owned by a Mexican company. D) The value of services that are produced by state and local governments in the United States. Answer C Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 14)The value of what KFC produces in Japan is included in the U. S. ________ and in the Japanese ________. A) GDP GDP B) GNP GNP C) GNP GDP D) GDP GNP Answer C Diff 2 Topic Gross Domes tic Product Skill Conceptual AACSB Reflective Thinking 15) Profits earned in the United States by foreign-owned companies are included in A) the U. S. GDP but not GNP. B) neither the U. S. GDP nor GNP. C) the U. S. GNP but not GDP. D) both the U. S. GDP and GNP. Answer A Diff 1 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 16) The GDP of the U. S. in 2002 was around $10 trillion. This means A) hat the value of output in the U. S. in 2002 was around $10 trillion. B) that total income in the U. S. in 2002 was around $10 trillion. C) that total spending on final goods and services in the U. S. in 2002 was around $10 trillion. D) all of the above Answer D Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 17) The GDP includes A) the value of all intermediate goods and services. B) the value of all final goods and services. C) the value of both intermediate and final goods and services. D) the value of all transactions. Answer B Diff 2 Topic Gross Domestic Product Skill ConceptualAACSB Reflective Thinking 18) Income Mexican citizens earn in the U. S. counts in A) U. S. GNP. B) Mexican GNP. C) Mexican GDP. D) both U. S. and Mexican GDP. Answer B Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 2 True/False 1) GDP measures the total income of everyone and the total spending by everyone in the economy. Answer FALSE Diff 1 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 2) Total income in the economy can sometimes be greater than total spending. Answer FALSE Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking ) The income of U. S. citizens working abroad counts in U. S. GDP. Answer FALSE Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 4) Stock market transactions are part of GNP. Answer FALSE Diff 2 Topic Gross Domestic Product Skill Conceptual AACSB Reflective Thinking 5) Value added is the difference bet ween the value of good as they leave a stage of production and cost of the goods as they entered that stage of production. Answer TRUE Diff 2 Topic Gross Domestic Product Skill Definition 6. 2 designing GDP 1 Multiple Choice 1) The compare for GDP using the expenditure approach isA) GDP = C + I + G + EX IM. B) GDP = C + I + G + (IM EX). C) GDP = C + I + G + EX + IM. D) GDP = C + I + G EX IM. Answer A Diff 1 Topic collusive GDP Skill Definition 2) The single largest expenditure component in GDP is A) government spending. B) enthronisation. C) consumption. D) net exports. Answer C Diff 1 Topic collusive GDP Skill Fact bear upon to the information provided in tabulate 6. 1 below to answer the questions that follow. send back 6. 1 pic 3) Refer to Table 6. 1. Personal consumption expenditures in billions of dollars are A) 1,000. B) 1,300. C) 1,500. D) 2,000. Answer D Diff 2Topic figure GDP Skill analytic AACSB uninflected Skills 4) Refer to Table 6. 1. The value for gross private domestic coronation in billions of dollars is A) 300. B) 375. C) 425. D) 450. Answer C Diff 2 Topic work out GDP Skill uninflected AACSB analytic Skills 5) Refer to Table 6. 1. The value for net exports in billions of dollars is A) one hundred fifty. B) 250. C) 650. D) 800. Answer A Diff 1 Topic shrewd GDP Skill uninflected AACSB uninflected Skills 6) Refer to Table 6. 1. The value of gross domestic product in billions of dollars is A) 3,000. B) 3,075. C) 3,125. D) 3,750. AnswerB Diff 2 Topic calculative GDP Skill analytic AACSB Analytic Skills 7) Refer to Table 6. 1. The value of government spending in billions of dollars is A) 100. B) 200. C) 300. D) 500. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills Refer to the information provided in Table 6. 2 below to answer the questions that follow. Table 6. 2 pic 8) Refer to Table 6. 2. Personal consumption expenditures in billions of dollars are A) 900. B) 1,100. C) 1,400. D) 1,600. Answer C Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 9) Refer to Table 6. 2.The value for gross private domestic investment in billions of dollars is A) 740. B) 810. C) 850. D) 890. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 10) Refer to Table 6. 2. The value for net exports in billions of dollars is A) -200. B) -150. C) 50. D) 250. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 11) Refer to Table 6. 2. The value for gross domestic product in billions of dollars is A) 2,900. B) 3,140. C) 3,440. D) 3,650. Answer B Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 12) Refer to Table 6. 2.The value of government spending in billions of dollars is A) 200. B) 600. C) 800. D) 1,000. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 13) A company produced 8 dishwasher machines in 2005. The company sold 6 in 2005 and added 2 to its inventories. The market value of the dishwasher machines in 2005 was $200 per unit. What is the value of this companys output that will be included in the 2005 GDP? A) $400. B) $1,400. C) $1,600. D) $2,000. Answer C Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 14) A farmer buys a new tractor from John Deere to use on her cotton farm.This tractor is included in GDP as A) part of gross private domestic investment. B) a durable consumption good. C) a service. D) a nondurable consumption good. Answer A Diff 2 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 15) The change in business inventories is measured as A) final sales minus GDP. B) final sales plus GDP. C) GDP minus final sales. D) the ratio of final sales to GDP. Answer C Diff 2 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 16) In 2007 final sales equal $200 billion, and the change in business inventories is $50 billion. GDP in 2007 A) s $250 billion. B) is $200 billion. C) is $150 billion. D) is $40 billion. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 17) In 2006 final sales equal $350 billion and the change in business inventories is -$60 billion. GDP in 2006 A) is $290 billion. B) is $295 billion. C) is $410 billion. D) cannot be determined from this information. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 18) In 2008 the change in business inventories is -$70 billion and GDP is $200 billion. Final sales in 2008 A) are $130 billion. B) are $200 billion.C) are $270 billion. D) are $340 billion. Answer C Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 19) In 2007, GDP was exactly equal to final sales. This implies that A) on that point was accumulation of inventories that year. B) there was a decline in inventories that year. C) there was no change in inventories that year. D) GDP did not grow that year compared to the year before. Answer C Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 20) If the change in business inventories is zero, then final sales are A) zero. B) less than GDP. C) greater than GDP. D) qual to GDP. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 21) If in a year there is a positive inventory investment, then final sales A) exceed GDP. B) are less than GDP. C) equal GDP. D) are zero. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 22) salary investment equals A) GDP minus final sales. B) gross investment minus final sales. C) gross investment minus wear and tear. D) depreciation plus GDP. Answer C Diff 1 Topic Calculating GDP Skill Definition 23) If net investment is zero, then A) gross investment is greater than depreciation.B) gross investment is less than depreciation. C) gross investment equals depreciation. D) depreciation is zero. Answer C Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 24) Suppose that net investment in 2008 was $20 billion and depreciation was $4 billion. G ross investment in 2008 was A) $16 billion. B) $20 billion. C) $24 billion. D) $28 billion. Answer C Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 25) The total value of all capital of the United States goods newly produced in a given outcome is A) the change in business inventories. B) depreciation. C) net investment. D) ross investment. Answer D Diff 1 Topic Calculating GDP Skill Definition 26) The change in capital stock in a period is equal to A) the ratio of the get along of the capital at the beginning of the period to the number of depreciation. B) the amount of the capital stock at the beginning of the period plus gross investment minus depreciation. C) the amount of the capital at the beginning of the period plus gross investment. D) the amount of the capital at the beginning of the period minus net investment. Answer B Diff 2 Topic Calculating GDP Skill Definition 27) crystallise investment is A) gross investment minus depreciation.B) gross investm ent plus depreciation. C) depreciation minus gross investment. D) GNP minus final sales. Answer A Diff 1 Topic Calculating GDP Skill Definition 28) Depreciation is A) the decrease in the overall price level. B) the additional capital stock in a year. C) the amount of used up machinery in a year. D) the amount of decline in business inventories. Answer C Diff 1 Topic Calculating GDP Skill Definition 29) If net investment in 2007 is $350 billion and gross investment in 2007 is $500 billion, depreciation in 2007 is A) $0. 7 billion. B) $150 billion. C) $175 billion. D) $250 billion.Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 30) If net investment in 2008 is $500 billion and gross investment in 2008 is $900 billion, depreciation in 2008 is A) -$500 billion. B) $0. C) $400 billion. D) $1,400 billion. Answer C Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 31) If gross investment in 2008 is $750 billion and depreciation in 2008 is $850 bil lion, net investment in 2008 is A) -$50 billion. B) -$100 billion. C) -$800 billion. D) -$1,600 billion. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 32)If gross investment in 2008 is $200 billion and depreciation in 2008 is $1,000 billion, net investment in 2008 is A) -$900 billion. B) -$800 billion. C) $1,000 billion. D) $1,200 billion. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 33) Exports equal A) imports net exports. B) net exports + imports. C) net exports imports. D) imports + (exports + imports). Answer B Diff 1 Topic Calculating GDP Skill Definition 34) When calculating GDP, exports are ________ and imports are ________. A) added added B) added subtracted C) subtracted added D) subtracted subtracted Answer BDiff 1 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 35) If the value of net exports is negative, then A) exports exceed imports. B) imports exceed exports. C) exports equal imports. D) im ports are zero. Answer B Diff 1 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 36) The largest income component of GDP is A) proprietors income. B) rental income. C) compensation of employees. D) corporate profit. Answer C Diff 2 Topic Calculating GDP Skill Fact 37) What should be subtracted from GDP to calculate national income? A) depreciation B) indirect taxes C) personal income taxes.D) net factor payments to the rest of the humanness Answer A Diff 2 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 38) Proprietors income is A) the income of unincorporated businesses. B) the income of all businesses? incorporated and unincorporated. C) the income of sole proprietorships. D) the income of partnerships. Answer A Diff 2 Topic Calculating GDP Skill Definition 39) crystallize interest is the interest on loans paid by A) businesses, households, and the government. B) businesses and households. C) businesses and the government. D) businesses. Answer D Diff 3 Topic Calculating GDP SkillDefinition 40) Interest paid by households and by the government is A) counted in national income, but not in GDP. B) not counted in GDP because it is not assumed to flow from the production of goods and services. C) not counted in GDP but is counted in GNP because it is paid by U. S. citizens to people living in the United States. D) included in both GDP and GNP because it represents an expenditure by one group and a receipt of income by another group. Answer B Diff 3 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 41) What type of tax affects the amount of money you pay for a product? A) direct taxB) income tax C) indirect tax D) all of the above Answer C Diff 2 Topic Calculating GDP Skill Conceptual 42) Depreciation is A) subtracted from national income to get GDP. B) added to national income to get GDP. C) subtracted from GNP to get NNP. D) added to GNP to get NNP. Answer C Diff 2 Topic Calculating GDP Skill Conceptual AACSB Re flective Thinking Refer to the information provided in Table 6. 3 below to answer the questions that follow. Table 6. 3 pic 43) Refer to Table 6. 3. The value for national income in billions of dollars is A) 585. B) 600. C) 635. D) 850. Answer C Diff 2 TopicCalculating GDP Skill Analytic AACSB Analytic Skills 44) Refer to Table 6. 3. The value for gross domestic product in billions of dollars is A) 485. B) 680. C) 685. D) 710. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 45) Refer to Table 6. 3. The value of net factor payments to the rest of the world is A) 5. B) 15. C) 25. D) 35. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 46) Refer to Table 6. 3. The value of disposable income A) is 505. B) is 560. C) is 605. D) cannot be calculated given the information in Table 6. 3. Answer D Diff 2Topic Calculating GDP Skill Analytic AACSB Analytic Skills 47) If receipt of factor income from the rest of the world exceed payments of factor income to the rest of the world, then A) GDP is greater than GNP. B) GDP equals GNP. C) GNP equals NNP. D) GNP is greater than GDP. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills Refer to the information provided in Table 6. 4 below to answer the questions that follow. Table 6. 4 pic 48) Refer to Table 6. 4. The value for GDP in billions of dollars is A) 910. B) 920. C) 950. D) 1,050. Answer C Diff 2 Topic Calculating GDPSkill Analytic AACSB Analytic Skills 49) Refer to Table 6. 4. The value for GNP in billions of dollars is A) 900. B) 930. C) 980. D) 1,010. Answer B Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 50) Refer to Table 6. 4. The value for NNP in billions of dollars is A) 890. B) 910. C) 940. D) 970. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 51) Refer to Table 6. 4. The value for national income in billions of dollars is A) 890. B) 910. C) 940. D) 970. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 2) Refer to Table 6. 4. The value for personal income in billions of dollars is A) 870. B) 890. C) 950. D) 960. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 53) Refer to Table 6. 4. The value for disposable personal income in billions of dollars is A) 750. B) 770. C) 820. D) 990. Answer A Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 54) If GNP is $600 billion, receipts of factor income from the rest of the world are $50 billion, and payments of factor income to the rest of the world are $30 billion, then GDP is A) $520 billion. B) 580 billion. C) $620 billion. D) $680 billion. Answer B Diff 3 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 55) If GNP is $200 billion, receipts of factor income from the rest of the world are $10 billion, and payments of factor income to the rest of the world are $30 billion, then GDP is A) $160 billion. B) $210 billion. C) $220 billion. D) $240 bill ion. Answer C Diff 3 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 56) If GDP is $500 billion and depreciation is $40 billion, then net national product A) is $460 billion. B) is $500 billion. C) is $540 billion. D) annot be determined from this information. Answer D Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 57) If GDP is $300 billion, depreciation is $30 billion, and net factor income from the rest of the world is -$40 billion, then net national product is A) $230 billion. B) $270 billion. C) $290 billion. D) $310 billion. Answer D Diff 3 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 58) If GNP is $800 billion and depreciation is $90 billion, then net national product is A) $710 billion. B) $845 billion. C) $890 billion. D) $980 billion. Answer A Diff 1 TopicCalculating GDP Skill Analytic AACSB Analytic Skills 59) If GNP is $200 billion and depreciation is $20 billion, then net national product is A) $100 billion. B) $180 billion. C ) $210 billion. D) $220 billion. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 60) If depreciation equals zero and retained earnings equal $5 billion, then A) GNP is less than net national product by $5 billion. B) GNP equals net national product. C) Net national product is less than GNP by $5 billion. D) GNP is greater than GDP by $5 billion. Answer B Diff 1 Topic Calculating GDP SkillAnalytic AACSB Analytic Skills 61) Net national product is A) GDP plus depreciation. B) GDP minus depreciation. C) GNP minus depreciation. D) GNP plus depreciation. Answer C Diff 1 Topic Calculating GDP Skill Definition 62) The total income of households is A) net national product. B) personal income. C) national income. D) production income. Answer B Diff 1 Topic Calculating GDP Skill Definition 63) Personal income is national income minus A) depreciation. B) net factor income to the rest of the world. C) the amount of national income not going to households. D) imports. Answer C Diff 2 Topic Calculating GDPSkill Fact 64) If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals A) $480 billion. B) $320 billion. C) $280 billion. D) $80 billion. Answer C Diff 2 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 65) Which of the following is subtracted from national income to get to personal income? A) retained earnings B) personal interest income C) depreciation D) personal Taxes Answer A Diff 2 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 66) Personal income A) is always less than national income. B) s always greater than national income. C) may be greater than or less than national income. D) will always equal national income. Answer C Diff 2 Topic Calculating GDP Skill Conceptual AACSB Reflective Thinking 67) If personal income is $925 billion and personal income taxes are $70 billion, the value of disposable personal income is A) $835 billion. B) $855 billion. C) $890 billion. D) $995 billion. Answer B Diff 1 Topic Calculating GDP Skill Analytic AACSB Analytic Skills 68) If personal saving is -$10 billion and disposable personal income is $370 billion, then personal consumption spending A) is $360 billion.