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Gross Domestic Product (GDP) is the total market value of all
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final goods and services produced annually within a country's borders.
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Which of the following items is a final good?
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a sweater purchased by someone in a department store
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The best reason economists take only final goods and services into account when calculating GDP is that
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they want to avoid the problem of double counting.
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Underground activities are not counted in GDP because
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there are no written records of underground activities.
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Net exports equals
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exports minus imports.
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Macroeconomists define consumption as
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purchases by the household sector.
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The expenditure approach to measuring GDP sums
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consumption, investment, government purchases, and net exports.
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Disposable income is
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that portion of personal income that can be used for consumption and saving.
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Net domestic product is the total value of
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all final goods and services produced within a country's borders in a year minus capital consumption allowance.
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Which of the following would not be included in the calculation of this year's GDP?
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a headlight bulb purchased by Ford Motor Co. from a supplier
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Suppose there are five goods in the economy, A-E. The current-year quantity of each is 10A, 20B, 30C, 40D, and 50E. Current-year prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E. Base-year prices are $1 for each good. Real GDP in the current year equals _________ and GDP equals _________.
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$150; $550
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Real GDP is GDP
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in base-year prices.
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"Economic growth" has occurred if
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Real GDP this year is greater than Real GDP last year.
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The standard definition of "recession" is
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two consecutive quarters of falling Real GDP.
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Which of the following is a macroeconomic measurement used to gauge macroeconomic activity?
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Net domestic product, National income, Personal income, Disposable income
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Look at the following data: durable goods = $200 billion; nondurable goods = $350 billion; services = $600 billion; fixed investment + inventory investment = $200 billion; government purchases = $400 billion; exports = $30 billion; imports = $79 billion. GDP is equal to
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$1,701 billion.
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Look at the following data: personal income = $4,900 billion; personal taxes = $900 billion; transfer payments = $980 billion. What is disposable income?
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$4,000 billion
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A business cycle refers to the
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recurrent swings (up and down) in Real GDP.
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The sum of durable goods, nondurable goods, and services equals
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consumption.
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The sale of __________ goods is omitted from current GDP because __________.
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used goods; these goods were counted in an earlier year
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Suppose the total market value of all final goods and services produced in economy X this year is $4 million. Of the $4 million worth of goods and services, $3 million is sold and $1 million is held in inventory. For this year, the GDP for economy X is
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$4 million.
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