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Exam 15: Measuring a Nations Income

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Question 261

Multiple Choice

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For the purpose of calculating GDP, investment is spending on

A) stocks, bonds, and other financial assets.
B) real estate and financial assets such as stocks and bonds.
C) capital equipment, inventories, and structures, including household purchases of new housing.
D) capital equipment, inventories, and structures, excluding household purchases of new housing.

E) A) and D)
F) A) and C)

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Question 262

Multiple Choice

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Estimates of the values of which of the following non-market goods or services are included in GDP?

A) the value of unpaid housework
B) the value of services provided by major household appliances purchased in a previous period
C) the estimated rental value of owner-occupied homes
D) All of the above are included in GDP.

E) None of the above
F) B) and D)

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Question 263

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If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175, then the inflation rate in 2010 was 25%.

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2010 Quality Motors produced $30 million worth of automobiles, with $17 million in sales to Americans, $9 million in sales to Canadians, and $4 million worth of automobiles added to Quality Motors' inventory. The transactions just described contribute how much to U.S. GDP for 2010?

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 percent. What happened to real GDP per person?

What are transfer payments, and how do they affect the calculation of GDP?

In a simple circular-flow diagram, total income and total expenditure are

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Macroeconomics is the study of the economy as a whole.

Real GDP is a better gauge of economic well-being than is nominal GDP.

Which of the following is not included in GDP?

In the economy of Talikastan in 2015, exports were $500, GDP was $6400, government purchases were $1700, imports were $400, and investment was $1800. What was Talikastan's consumption in 2015?

For an economy as a whole,

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2008?

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What was the growth rate of real GDP for 1931?

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 $1 worth of rawhide that it buys from Rolling Rawhide, Chewy Chomp, Inc. produces a dog chew and sells it for $2.50. Neither firm had any inventory at the beginning of 2014. During that year, Rolling Rawhide produced enough rawhide for 2000 dog chews. Chewy Chomp, Inc. bought 90% of that rawhide for $1800 and promised to buy the remaining 10% for $200 in 2015. Chewy Chomp, Inc. produced 1800 dog chews during 2014 and sold each one during that year for $2.50. What was the economy's GDP for 2014?

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1931?

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2009? Show your work.

Calculate the inflation rate for a country where the GDP deflator rises from 120 to 165.