Chapter 22 Flashcards

Gdp
Terms Definitions
A country with a larger GDP per person generally has a greater standard of living or quality of life than a country with a smaller GDP per person.
True
A new car produced in 2005, but first sold in 2006, should be counted in 2006 GDP because that is when it was first sold as a final good.
True
A recession occurs when real GDP declines.
True
An example of a transfer payment is...
Unemployment benefits
Cigarettes should be valued in GDP at $3.50 per pack even though $1.00 of that price is tax because the buyers paid $3.50 per pack.
True
Depreciation is the value of the wear and tear on the economy's equipment and structures.
True
For an economy as a whole, income equals expenditure of the buyer.
True
Gross domestic product can be measured as the sum of...
consumption, investment, government purchases, and net exports.
Gross domestic product is the sum of the market value of the...
final goods and services
How is your purchase of a $40,000 BMW automobile that was produced entirely in Germany recorded in the U.S. GDP accounts?
Consumption increases by $40,000 and net exports decrease by $40000
If U.S. GDP exceeds U.S. GNP, then foreigners produce more in the United States than U.S. citizens produce in the rest of the world.
True
If U.S. GDP exceeds U.S. GNP, then foreigners produce more in the United States than U.S. citizens produce in the rest of the world.
True
If U.S. GDP exceeds U.S. GNP, then..
foreigners are producing more in the US than Americans are producing in foreign countries.
If a cobbler buys leather for $100 and thread for $50 and uses them to produce and sell $500 worth of shoes to consumers, the contribution of GDP is...
$500
If nominal GDP in 2005 exceeds nominal GDP in 2004, then the production of output must have...
risen or fallen because there is not enough information to determine what happened to real output.
If nominal GDP in 2006 exceeds nominal GDP in 2005, real output must have risen.
False
If the lumberyard sells $1000 of lumber to a carpenter and the carpenter uses the lumber to build a garage that he sells for $5000, the contribution to GDP is $6000.
False
If your grandparents buy a new retirement home, this transaction would affect...
investment
In the United States, investment is largest component of GDP.
False
Net national product always exceeds a nation's total income because of depreciation and taxes.
False
Nominal GDP employs current prices to value output while real GDP employs constant base-year prices to value output.
True
Real GDP is measured in ___ prices while nominal GDP is measured in ___ prices.
base year, current year
The production of an apple contributes more to GDP than the production of a gold ring because food is necessary for life itsef.
False
The value of plant and equipment worn out in the process of manufacturing goods and services is measured by...
Investment
U.S. GDP would exclude which of the following?
cotton purchased by Lee Jeans
U.S. gross domestic product (in contrast to gross national product) measures the production and income of...
people and factories located within the borders of the United States.
Wages are an example of a transfer payment because there is a transfer of payment from the firm to the worker.
False
What is the approximate percentage increase in prices from 2003 to 2004? (pens/books)
22 percent
What is the percentage increase in prices from 2002 to 2003? (pens/books)
13 percent
What is the percentage increase in real GDP from 2003 to 2004? (pens/books)
0 percent
What is the value of nominal GDP for 2003? (Pens/Books)
$1,200
What is the value of real GDP for 2003? (pens/books)
$1,060
What is the value of the GDP deflator in 2003? (pens/books)
113
When the city of Chicago puchases a new school building, the investment component of GDP increases.
False
Which of the following would be excluded from 1989 GDP? The sale of...
a home built in 1988 and first sold in 1989
/ 35
Term:
Definition:
Definition:

Leave a Comment ({[ getComments().length ]})

Comments ({[ getComments().length ]})

{[comment.username]}

{[ comment.comment ]}

View All {[ getComments().length ]} Comments
Ask a homework question - tutors are online