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Exam 23: Measuring a Nations Income

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Question 131

Multiple Choice

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Spots,Inc.produces ink and sells it to Write on Target,which makes pens.The ink produced by Spots,Inc.is called

A) an inventory good.
B) a transitory good.
C) a preliminary good.
D) an intermediate good.

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

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Question 132

True/False

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The investment component of GDP refers to financial investment in stocks and bonds.

A) True
B) False

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Question 133

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For an economy as a whole,income must exceed expenditure.

In the economy of Wrexington in 2008,exports were $200,GDP was $2000,government purchases were $300,imports were $130,and investment was $400.What was Wrexington's consumption in 2008?

If nominal GDP is $10,000 and real GDP is $8,000,then the GDP deflator is 125.

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp,Inc. ,which uses the rawhide to produce and sell dog chews.With each $2 of rawhide that it buys from Rolling Rawhide,Chewy Chomp,Inc.produces a dog chew and sells it for $5.Neither firm had any inventory at the beginning of 2007.During that year,Rolling Rawhide produced enough rawhide for 1000 dog chews.Chewy Chomp,Inc.bought 75% of that rawhide for $1500 and promised to buy the remaining 25% for $500 in 2008.Chewy Chomp,Inc.produced 750 dog chews during 2007 and sold each one during that year for $5.What was the economy's GDP for 2007?

The basic tools of supply and demand are as central to macroeconomic analysis as they are to microeconomic analysis.

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.From 2007 to 2008,Batterland's output grew

In the economy of Wrexington in 2008,consumption was $3000,GDP was $5500,government purchases were $1000,imports were $2000,and investment was $1000.What were Wrexington's exports in 2008?

GDP includes only the value of final goods because the value of intermediate goods is already included in the prices of the final goods.

In the economy of Wrexington in 2008,consumption was $5300,GDP was $8800,government purchases were $1800,imports were $500,and investment was $2000.What were Wrexington's exports in 2008?

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

A country reported nominal GDP of $100 billion in 2008 and $75 billion in 2007.It also reported a GDP deflator of 125 in 2008 and 120 in 2007.Between 2007 and 2008,

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.Disposable personal income for Wrexington in 2006 is

Suppose the government eliminates all environmental regulations and,as a result,the production of goods and services increases,but there is considerably more pollution.Based on this scenario,which of the following statements is correct?

GDP is defined as

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

U.S.GDP and U.S.GNP are related as follows:

In the economy of Wrexington in 2008,consumption was $500,exports were $200,GDP was $1200,government purchases were $250,and investment was $300.What were Wrexington's imports in 2008?