Uncategorized

Adding all incomes earned by households from the sale of resources yields a. intermediate goods.b. indirect business taxes.c. national income.d. personal income.

Subtracting an allowance for depreciation of fixed capital from gross domestic product yields a. real GDP.b. nominal GDP.c. personal income.d. national income.

The GDP chain price index is a. widely reported in the news.b. broadly based.c. adjusted for government spending.d. a measure of changes in consumer prices.

Gross domestic product data that reflect actual prices as they exist in a given year are expressed in terms of a. fixed dollars.b. current dollars.c. constant dollars.d. real dollars.

Disposal personal income a. is the income people spend for personal items such as homes and cars.b. includes transfer payments.c. excludes transfer payments.d. includes personal taxes.

Which of the following is a shortcoming of GDP? a. GDP measures nonmarket transactions.b. GDP includes an estimate of illegal transactions.c. GDP includes an estimate of the value of household services.d. None of the answers above are correct.

Which of the following statements is true? a. The inclusion of intermediate goods and services in GDP calculations would underestimate our nation’s production level.b. The expenditures approach sums the compensation of employees, rents, profits, net interest, and non-income expenses for depreciation and indirect business taxes.c. Real GDP has been adjusted for change in the general

Which of the following items is included in the calculation of GDP? a. Purchase of 100 shares of Apple stock.b. Purchase of a used car.c. The value of a homemaker’s services.d. Sale of Gulf War military surplus.e. None of the answers above would be included.

To what does the “GDP gap” refer? a. The difference between real and nominal GDP.b. The difference between this year’s real GDP and last year’s GDP.c. The difference between “full-employment” real GDP and actual real GDP.d. The difference between real GDP in the prior trough and real GDP in a current trough of the business

The economy is considered to be at full employment when a. the actual rate of unemployment is less than the natural rate.b. the leading economic indicators are unchanged for two consecutive quarters.c. structural unemployment is zero.d. frictional plus structural unemployment is less than the natural rate.e. the rate of cyclical unemployment is zero.