Exam 4: Measuring GDP and Economic Growth

11 Appendix: Numeric and Graphing Questions -The figure above shows the price of a DVD player from 2003 to 2007. a) What type of graph is illustrated above? b) What is the trend in the price of a DVD player?

An example of "investment" in the national income accounts is the purchase of

If depreciation exceeds gross investment,net investment is negative.

Why are only final goods and services included in measuring GDP? Give examples to complete your answer.

An economy recovering from a recession

Real GDP in 2012 is $10 trillion.Between 2012 and 2013,using 2012 prices,GDP grew 3 percent and using 2013 prices real GDP grew 7 percent.Using the chain-weighted output index method,real GDP in 2013 is ________ trillion.

According to the BEA,in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent.The difference between the change in nominal GDP and the change in real GDP could be explained by

The use of purchasing power parity prices

The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euros,in constant prices): 2006 2007 Consumption 84,000 89,000 Government expenditure 24,000 26,000 Investment 48,000 48,000 Exports 142,000 151,000 Imports 123,000 128,000 Subsidies 1,800 1,900 Taxes 500 500 In 2007,Ireland's net exports was ________ million euros.

"Life expectancy is exceptionally high in Japan. Scores for political freedom and civil liberties approach those of peer countries in Europe...equality of opportunity is extremely weak. The country also possesses one of the longer working weeks." Japan's GDP was estimated to be $4.2 trillion (purchasing power parity) and the population was 127.4 million. "Driven by its attractive climate, Brazil performs substantially better on Life Satisfaction than Material Wealth. High international demand for Brazil's commodities and raw materials has produced a sustained economic expansion since 2004, which in turn has led to job creation, wage growth and relatively low inflation. Brazilians report that they control their own lives to a substantial degree." Brazil's GDP was estimated to be $1.7 trillion (purchasing power parity) and 190 million in 2006. www.prosperity.com -According to the article,we can conclude that the standard of living

________ gross domestic product is the value of ________ linked back to the prices of a single year.

If Frito Lay,an American snack company,opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America,then Mexico's GDP ________ and U.S.GDP ________.

Gross investment equals net investment plus

All economic activity in the underground economy represents the production of illegal goods and services.

Explain the relationship between potential GDP and real GDP in the United States since the early 1960s.You do not need to tell what happened during any specific year; just describe the general relationship.

GDP equals

4 News Based Questions "As the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be China's ability to plough on regardless of double-digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent in each of the last two months". Beijing's Burden, www.FT.com, by Geoff Dyer, Sept. 23, 2008 -According to the article,________ can be expected to ________ this year.

Assume a small nation has the following statistics: its consumption expenditure is $15 million,investment is $2 million,government purchases of goods and services is $1 million,exports of goods and services to foreigners is $1 million,and imports of goods and services from foreigners is $1.5 million.Calculate this nation's GDP.

Which of the following is included in the category of corporate profits when measuring GDP? I. Profits paid as dividends. II. Undistributed profits. III. Income received by owners and operators of businesses.

In 2012,net exports in the United States were