chapter 7 - Measuring Domestic Output, and National Income...

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Measuring Domestic Output, and National Income 1. A nation's gross domestic product (GDP): A) is the dollar value of the total output produced within the borders of the nation. B) is the dollar value of the total output produced by its citizens, regardless of where they are living. C) can be found by summing C + I n + S + X n . D) is always some amount less than its C + I g + G + X n . 2. National income accountants can avoid multiple counting by: A) including transfers in their calculations. B) counting both intermediate and final goods. C) only counting final goods. D) only counting intermediate goods. 3. Gross domestic product (GDP) measures and reports output: A) as an index number. B) in percentage terms. C) in dollar amounts. D) in quantities of physical units (for example, pounds, gallons, and bushels). 4. Final goods and services refer to: A) goods and services that are unsold and therefore added to inventories. B) goods and services whose value has been adjusted for changes in the price level. C) goods and services purchased by ultimate users, rather than for resale or further processing. D) the excess of U.S. exports over U.S. imports. 5. If intermediate goods and services were included in GDP: A) the GDP would then have to be deflated for changes in the price level. B) nominal GDP would exceed real GDP. C) the GDP would be overstated. D) the GDP would be understated. Page 1
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6. Tom Atoe grows tomatoes for home consumption. This activity is: A) excluded from GDP in order to avoid double counting. B) excluded from GDP because an intermediate good is involved. C) productive but is excluded from GDP because no market transaction occurs. D) included in GDP because it reflects production. C, I, G, and X n components 7. GDP can be calculated by summing: A) consumption, investment, government purchases, exports, and imports. B) investment, government purchases, consumption, and net exports. C) consumption, investment, wages, and rents. D) consumption, investment, government purchases, and imports. 8. In national income accounting, consumption expenditures include: A) purchases of both new and used consumer goods. B)
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chapter 7 - Measuring Domestic Output, and National Income...

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