Macroeconomic-Exam3a

Description:	bradley r. schiller
Category:	Business
Created by:	leepao07 on 2009-07-24

Question	Answer
calculated as nominal GDP divided by the price index	real GDP
equal to GDP minus depreciation plus net foreign factor income	national income
total investment expenditure in a given time period.	gross investment
alternative combinations of goods and services that can be produced with the available resources and technology	production possibilites
the increase in the market value of a product that takes place at each stage of the production process	value added
equal to disposable income minus consumption	saving
the reduction in the value of plant and equipment	depreciation
the amount of output that can be consumed without reducing a contry's capital stock	net domestic product
the income received by households before the payment of taxes	personal income
after-tax income of households	disposable income
used as a measure of the relative standard of living	GDP per capita
tht total market value of all final goods and services produced within a nation's borders in a given time period	gross domestic product
the measurement of aggregate economic activity	national income accounting
persistent increases in the price level	inflation
goods purchased for use as input in further stages of production	intermediate goods
the value of final output produced in a given period, measured in the prices of that period (current prices).	nominal GDP
expenditures on new plant, equipment and structures plus changes in inventories	investment
gross investment minus depreciation	net investment
goods and services purchased from other countries.	imports
the basis for indexing price changes	base period
equal to exports minus imports	net exports
goods and services sold to other countries	exports
without prices, it would be impossible to add up the outputs produced in different sectors of economy in a meaningful way	true
the value added approach to GDP prevents intermediate goods from being counted more than once in the calculation	true
if everyone who currently mows their own yard switches to a lawn maintenance service that reports their income, US GDP will increase, ceteris paribus	true
per capita GDP provides information about the distribution of GDP within a country	flase-GDP per capita is simply a stats average and tells us nothing about the way GDP is distributed
if real per capita GDP increases, everyone in the nation is better off.	false-real per capita GDP is an average. when real per capita GDP rises, the living standard for the country as a whole increases. some individuals are better off, but some individuals could be worst off
in a period of rising prices, real GDP will rise more rapidly than nominal GDP.	false-nominal GDP is affected by inflation and will increase faster than real GDP. real GDP is not affected by changing price levels
NDP provides information about future production possibilities because it measures gross investment	false-NDP provides information about future growht potentials because it measures net investment
GDP is calculated as Consumption + Gross Investment + Government Expenditures + (Exports - Imports)	true
state and local government expenditures on goods and services are not included in GDP bcause to do so would result in double counting	false-state and local government expenditures on good and services are included in GDP. these expenditures measure additional production beyond the goods and services the federal government consumes so there is no double counting
the toal value of market incomes must equal the total value of final output, or GDP	true
a basic function of the national-income accounting system is to: a)identify economic problems b)evaluate economic policy c)provide a framework for policy d)all of the above	d)all of the above
GDP can be found by: a)adding up spending by business, government, households, n foreigners, n subtracting imports b)adding up value added @ evry stage of production in economy c)adding up all receipts of households, government, and business d)all above	d)all of the above
refert to question #3	b) right. GDP will increase because the dollars spent to clean up the trash will increase govt spending, ceteris parisbus
if the real GDP is $8,000 billion in 2007 and the population is 250 million, then per capita real GDP is closest to: a)$20,000 per person b)$32,250 per person c)$32,000 per person d)$37,250 per person	c)$32,000 per person
refet to question #5	b)rises by the amount paid to house cleaners and baby-sitters
the underground economy exists because: a)people wish to avoid taxes b)illegal activities are often hihgly profitable c)it is difficult to trace transactions in the underground economy d) all of the above	d) all of the above
a manufacturer sells assembled video game systems for $220 each. if the manufacturer pays $105 for the compoenents in each game system, the value added to each system by the manufacturing process is equal to: a)$325 b)$220 c)$105 d)$115	d) $115
which of following is NOT a final good or service? a) a printin press purchased by a publishin company b)automobile tires purchase by an auto manufacturin company c)gas purchased fr personal use by a car owner d) preparation of your tax return by a CPA	b)automobile tires purchase by an auto maufacturing company
refer to question #9	b) real GDP is the value of output measured in constant prices
real GDP measures changes in: a)prices b)production c)prices and production d)wages	b)production
refer to question #11	c)nominal GDP increased in GDPland between 2006 and 2007
if depreciation exceed sgross investment, then: a)net investment exceeds depreciation b)gross investment is negative c)the difference between GDP and NDP is smaller than gross investment d)the bation's capital stock is being depleted	d)the bation's capital stock is being depleted
the stock of capital in teh US can grow only if: a)depreciation is positive b)gross investment minus depreciation is positive c)GDP minus NDP is postive d)all of the above	b)gross investment minus depreciation is positive
refer to question #14	b)increase GDP during that period
which of followin types of govt spendin is included n cal of GDP? a)fed govt spendin only b)fed, state, n local govt spendin fr any purpose c)fed, state, n local govt spendin on goods n services only d)fed, state n local spending on transfer payments only	c)fed, state, n local govt spendin on goods n services only
refer to question #16	a)imports are subtracted from exports because they represent the value of production and resources absorbed in foreign economies
DI is the most practical way to: a)measure how much income households can spend and save b)measure how much output can be consumed on a sustainable basis c)make international comparisons of the standard of living d)analyze growth rate of economy ovr time	a)measure how much income households can spend and save
net exports are equal to: a)exports plus imports b)imports minus expots c)exports minus imports d)exports plus imports minus depreciation	c)exports minus imports
value of total output must = value of total incme n an economy becus: a)1 person's expend on goods n services is anothr person's incme b)incme earnd is spent on goods n servics, which creats additional production c)of circulr nature of economy d)all above	d)all of the above
the social well-being of a country: a)is best measured by per capita GDP b)always increase when real GDP increases c)decreases when real GDP decreases d)is measured by more than changes in real GDP	d)is measured by more than changes in real GDP
national-income accounting	the measurement of aggregate economic activity, particularly national income and its components
GDP stands for?	gross domestic product
GDP is?	the total market value of all final goods and services produced within a nation's borders in a given time period
GDP per capita	tht total GDP divided by total population; average GDP
GDP is refer to?	domestic, refers to output produced wihtin America's borders
GNP is refer to?	national, refers to the output produced by American-owned factors of production regardless of where they're located.
intermediate goods	goods or services purchased for use as input in the production of final goods or in services
value added	the increase in the market value of a product that takes place at each stage of the production process
calculating real GDP in year t	nomical GDP in year t/price index
nominla GDP	the va,ue of infal output produced in a given period, measured in the prices of that period (current prices)
real GDP	the value of final output produced in a given period, adjusted for changing prices
base period	the time period used for comparative analysis; the basis for indexing, for example, of price changes
inflation	an increase in the average level of prices of goods and services
production possibilities	the alternative combination of final goods and services that could be produced in a given time period with all available resources and technology
depreciation	the consumption of capital in the production process; the wearing out of plant and equipment
net domestic product (NDP)	GDP less depreciation
investment	expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories
gross investment	total investment expenditure in a given time period
net investment	gross investment less depreciation
exports	goods and services sold to internation buyers
imports	goods and services purchased from international sources
net exports	the value of exports minus the value of imports
GDP components	C=comsumption expenditure I=investment expenditure G=government expenditure X=exports M=imports
calculating NDP	GDP-depreciation
calculating NI	NDP+net foreign factor income
national income (NI)	total income earned by current factors of production: GDP less depreciation and indirect business taxes, plus net foreign factor income
personal income (PI)	income recieved by households before payment of personal taxes
disposable income (DI)	after income of households; personal income less personal taxes
saving	that part of disposable income not spent on current consumption' disposable income less consumption