Exam 10: Measuring a Nations Income

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

According to the circular-flow diagram, GDP

Figure 23-1. -Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

For the purpose of calculating GDP, investment is spending on

Consider the following three items of spending by the government: i) the federal government pays a $500 unemployment benefit to an unemployed person; ii) the federal government makes a $2,000 salary payment to a Navy lieutenant; iii) 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?

Which of the following is always measured in prices from a base-year?

Which of the following items is included in GDP?

In a simple circular-flow diagram, total income and total expenditure are

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

In the base year, the GDP deflator is always

If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Disposable personal income is the income that

GDP is not a perfect measure of well-being; for example,

The inflation rate in year 2 equals

A farmer sells sugar to a candy producer for $150. If the producer uses this sugar to make candy that sells for $200, what is the total contribution to GDP from these transactions?

Net exports equal

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased

Which of the following statements about recessions is true?