Exam 7: Taking the Nations Economic Pulse

A firm purchases $600,000 worth of raw materials and pays wages and salaries of $100,000 and dividends of $200,000. If the firm sells its output for $1 million, the firm's value added to GDP is

Which of the following would increase GDP?

If national income accountants fail to make an adequate adjustment for increases in the quality of goods and services over time,

Which of the following would not affect this year's GDP?

Which of the following is a deficiency of the regular (or traditional) consumer price index  (CPI) as a measure of the cost of living?

Your brother graduated from college 10 years ago and started to work at a salary of $20,000. You expect to graduate this year and start to work for $35,000. If the consumer price index was 80 ten years ago and is 120 this year, who will have received the higher real starting salary?

Use the table below to choose the correct answer. Gross domestic product equals

If inventory investment during a year was minus $6 billion, producers must have

What does gross private domestic investment include?

Your father tells you he earned $1.50 per hour when he was 16 in 1969. Given that the CPI was 36.0 in 1969 and 215 in 2008, how much would you have to earn in 2008 in order to have the same real wage as your father in 1969?

The GDP of a country can be derived by summing

If the underground economy is sizable, then GDP will

Gross domestic product is a measure of both

The price of a gallon of gasoline was $2.01 in May 2004 compared to 39 cents in 1973. However, the Consumer Price Index was 44.4 in 1973 compared to 189.1 in May 2004 (1980 − 1984 = 100). In terms of the purchasing power of the dollar in 2004, the 1973 price of gasoline was

Which of the following would not be included in GDP?

Real GDP equals nominal GDP

What basket of goods is used to construct the CPI?

If a country has attracted a relatively large number of foreign workers and a large amount of foreign investment,

Which of the following transactions would increase GDP?

Given the following figures, by approximately what percentage did Michael's real income increase between 2008 and 2009? Michael's 2008 money income = $60,000 Michael's 2009 money income = $72,000 2008 CPI = 120.0 2009 CPI = 128.0