Exam 23: Measuring a Nations Income

Consider the following three items of spending by the government: (1)the federal government pays a $500 unemployment benefit to an unemployed person;(2)the federal government makes a $2,000 salary payment to a Navy lieutenant;(3)the city of Bozeman,Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman.Which of these payments contributes directly to government purchases in the national income accounts?

When studying changes in the economy over time,economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services.In other words,economists want to study

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company,which uses the aluminum to make aluminum foil.Shiny Foil Company sells $4 million worth of aluminum foil to households.The transactions just described contribute how much to GDP?

Social Security payments are

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services,but GDP cannot measure both at the same time.

Which of the following subcomponents of GDP can be either positive or negative?

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.National income for Wrexington in 2006 is

Table 23-2 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-2.What was Wrexington's consumption in 2008?

In a simple circular-flow diagram,

Microeconomics and macroeconomics are closely linked.

Retained earnings is income that

The output of goods and services produced in the United States has grown on average 3.2 percent per year.

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

If an economy's GDP rises,then it must be the case that the economy's

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP,but the value of intermediate goods produced and not sold is included directly as part of GDP.

To encourage formation of small businesses,the government could provide subsidies;these subsidies

Table 23-4 The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005. -Refer to Table 23-4.In 2008,Dachsland's

In a certain small country,the unit of currency is the huck.That country's government recently announced that "GDP amounted to 400 million hucks in the quarter that just ended." Assuming this country has adopted American GDP accounting conventions,this statement means that GDP,

Which of the following is included in the consumption component of U.S.GDP?

The government purchases component of GDP includes salaries paid to soldiers but not Social Security benefits paid to the elderly.