Exam 24: Measuring a Nations Income

Table 1 shows the following amounts for the years 2009 to 2011. Year Nominal GDP Real GDP 2009 \ 500 \ 500 2010 \ 600 \ 545.5 2011 \ 720 \ 600 Prices in $billions What is the GDP deflator for the three years?

According to the income-expenditure identity, the total income of a country equals the sum of the four types of expenditure: consumption, investment, government purchases and net exports.

GDP can be measured by counting final sales at each level of production.

If Canada's GDP is $1000 billion and Poland's GDP is $100 billion, the average Canadian citizen must be ten times as well-off as the average Polish citizen.

Macroeconomics is:

The difference between the values of final production and value of the inputs is called:

Nominal GDP always grows faster than real GDP.

If nominal GDP increased by 11 per cent while real GDP increased by only five per cent, then:

Which of the following is not omitted from GDP?

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities and desirable moral attributes of the population, are not measured as part of GDP.

Statistics such as GDP, the unemployment rate, the rate of inflation and the trade balance are:

Which of the following is not a component of the income approach?

Real GDP is the production of goods and services valued at a price compared to a certain year.

The goal of macroeconomics is:

David's Microchip Company (DMC) produces microchips for MP₃ players, which it sells for $18 million to John Smith Electronics (JSE).JSE's MP₃ players are sold for a total of $22 million.What is the value added to JSE?

A company produces an intermediate good on the last day of the year.If it is sold, GDP will not increase, but if it is not sold, GDP will increase.

When calculating GDO, what matters is

If the GDP deflator is $98 billion and the nominal GDP is $1960 billion, then the real GDP is:

Real GDP is:

For each of the following events, ceteris paribus, state the effect on GDP (does it increase/decrease/remain unchanged?) and why. A.A few small boat builders decide to move from the production of simple boats for leisure use to the production of yachts for the America's Cup. B.You are short of cash and you need more exercise so you sell your car for $1000. C.The Australian Tax Office gets tough on illegal unrecorded activity (the underground economy ) D.A major oil spill occurs off the coastline of an area with high unemployment levels.Many of the local unemployed are employed to help with the clean-up.