Exam 6: GDP and the Measurement of Progress

Orrin mines iron ore,which he sells to Thorin,who turns iron ore into steel.The steel is sold to Gorin,who turns the steel into battle axes.The battle axes are sold by a merchant in the city to adventurers.Which of the following would be considered a final good?

In the factor income approach,income to owners of capital is called interest.

Which of the following are underground goods or services that would NOT be counted in GDP?

Which of the following is counted as part of GDP?

None of the income components of GDP (based on the factor income approach)can be negative values.

Goods that have higher prices have greater weight in calculated GDP.

The purchase of a new home is considered a personal consumption expenditure.

A car produced by the Japanese company Honda in a plant located in Ohio would be included in:

When a German firm produces a vehicle in the United States,the production is part of:

Gross domestic product (GDP)is the market value of:

When GDP is calculated,goods are valued using:

Suppose you spend half the summer building a garage in your back yard.You purchase tools that cost $350 and wood that cost $4,000.A contractor would charge $25 per hour for the 40 hours of work necessary to build the garage.After you build the garage,your mother gives you a present of $500 in stocks.How much will GDP rise as a result of these activities?

The cost of negative externalities that harm the environment,such as pollution costs:

The factor income approach splits GDP into consumption,investment,interest,and rent.

To avoid double accounting,the value of:

Which of the following would NOT be included in GDP for the United States?

A farmer's purchase of a new tractor counts as investment in the national spending approach to measuring GDP.

Which of the following would be included in U.S.GNP?

Government spending,including transfer payments,is included in the calculation of GDP.

The purchase of a new home is considered an investment expenditure.