Exam 10: Measuring a Nations Income: The Measurement of GDP

A tire manufacturer produces 400 tires valued at $20 each.Three hundred tires are sold to a tire shop,which then sells them to households for $50 each.The remaining tires are unsold and are added to the tire manufacturer's inventory.How much is added to GDP?

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp,Inc. ,which uses the rawhide to produce and sell dog chews.With each $1 worth of rawhide that it buys from Rolling Rawhide,Chewy Chomp,Inc.produces a dog chew and sells it for $2.50.Neither firm had any inventory at the beginning of 2014.During that year,Rolling Rawhide produced enough rawhide for 2000 dog chews.Chewy Chomp,Inc.bought 90% of that rawhide for $1800 and promised to buy the remaining 10% for $200 in 2015.Chewy Chomp,Inc.produced 1800 dog chews during 2014 and sold each one during that year for $2.50.What was the economy's GDP for 2014?

A painter pays $500 for paint he uses to repaint a house.He then presents a bill for $1200 that covers his time and expenses to the homeowner.How much do these transactions add to GDP?

The purchase of rice produced this period is included in GDP if the rice is

Beth,an American citizen,travels to Italy on vacation and buys an espresso machine to bring home.Her purchase increases

Which of the following is included in the calculation of GDP?

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?

Which of the following is not correct?

Quality Motors is a Japanese-owned company that produces automobiles;all of its automobiles are produced in American plants.In 2008,Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S.and $13 million in Mexico.In addition,it sold $2 million from the previous year's inventory in the U.S.The transactions just described contribute how much to U.S.GDP for 2008?

Thomas,a U.S.citizen,works only in Canada.The value of the output he produces is

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Which of the following is a way to compute GDP?

The residents of Ireland earn $200 million of income from abroad.Residents of other countries earn $300 million in Ireland.Therefore,Ireland's

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Ryan lives in an apartment where he pays $7,000 a year in rent.Sarah lives in a house that could be rented for $21,000 a year.How much do these housing services contribute to GDP?

Which of the following examples of production of goods and services would be included in U.S.GDP?

Retained earnings is income that

In the national income accounts,depreciation is called

Tesla builds a new vehicle,and completes it in December 2015.It sells the vehicle in January 2016.The value of this vehicle affects U.S.GDP

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter.Based on this information GDP likely