question
Gross domestic product measures the:
answer
value of final goods and services produced within the borders of a country during a given time period.
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In the circular flow diagram, government purchases of goods and services are financed by:
answer
tax revenues net of transfer payments plus government borrowing from financial markets.
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When a household makes a loan to a firm with the firm providing interest to the household, this is known as:
answer
a bond.
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The indirect ownership of physical capital used by firms by households is considered:
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stock.
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Investment refers to the:
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addition to the economy's supply of productive physical capital.
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Construction of new homes is considered part of:
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investment spending.
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Flows into the financial markets are equal to the sum of:
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foreign lending and purchases of stock plus private saving.
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A decrease in inventories is considered:
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a fall in investment spending which will lead to a drop in future sales.
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Within the circular flow diagram, the value of household income, the sum of wages, dividends, interest, and rent plus transfer payments equals the sum of:
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consumer spending, private saving, and the value of household tax payments.
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Transfer payments:
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represent a redistribution of funds from one individual to another individual in the economy.
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Wages represent:
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the income earned by households from the selling of their labor.
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Suppose only two countries existed in the world. Country A imported $200 million worth of goods and services from Country B. Country B imported $100 million worth of goods and services from Country A. This means that net exports for:
answer
Country A equals -$100 million.
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GDP can be calculated by summing:
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total market value of all final goods and services within a country's borders in a given year, all factor payments within a country's borders in a given year, or the value added for all goods and services.
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The value added is equal to:
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the value of sales minus the value of intermediate goods used by a company.
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Which of the following is NOT included in the calculation of GDP?
answer
The Social Security check your relative receives each month
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When consumers purchase imported products, this is:
answer
subtracted from GDP.
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Spending on inputs is __________________ and spending on investment is _______________.
answer
not a part of GDP; part of GDP
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Real per capita GDP is:
answer
real GDP divided by the population.
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The GDP deflator is:
answer
equal to 100 in the base year.
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