Econ: Chapter 13 Gross Domestic Product

Gross Domestic Product measures the 

• quantity of the goods and services produced in a given year, listed item by item, within a country.
• market value of the final goods and services produced in a given year within a country.
• measures the market value of the domestic labor in a given year within a country. 
• market value of the final goods and services consumed by households in a given year within a country.

If you make dinner for yourself

• the market value of your dinner is added to GDP. 
• your service in preparing the meal is valued at a cook's wage and added to GDP. 
• none of what you bought to prepare for dinner is included in GDP. 
• only the market value of ingredients that you purchased this year is added to GDP.

Honda has an assembly plant for Civics in Ohio. The production of U.S.-made Civics is

• added to U.S. GDP. 
• added to Japan's GDP because Honda is a Japanese company. 
• not included in either the U.S. or Japanese GDP. 
• added to U.S. GDP only if the Civic is sold in the United States in the year it is produced. 

Which of the following is a final good or service? 

• the grilled chicken purchased by Taco Bell for use in their burritos 
• a new replacement muffler installed by Midas Mufflers 
• the fertilizer purchased by Royal Lawn and Landscape 
• the computers purchased by Office Depot for sale to its customers 

Which of the following is a final good or service? 

• tires purchased by Ford for use on one of their SUV's 
• the new economics textbook you are using
• the hair gels used by a hair stylist at the local hair salon 
• the taco shells purchased by Taco Bell for use in their tacos 

Consumption expenditures are defined as spending on goods and services by

• households, businesses and government.
• businesses and government.
• households. 
• households and businesses.

Investment is defined as the purchase of

• any financial asset only.
• additions to inventories only.
• financial assets and inventories only.
• the purchase of new capital goods and additions to inventories. 

The purchase of stocks and bonds is 

• included in GDP as investment. 
• included in GDP as a consumption expenditure. 
• not included in GDP as investment. 
• not included in GDP because these are intermediate goods.

Net exports of goods and services is defined as equal to

• the value of exports of goods and services minus the value of imports of goods and services.
• U.S. sales of goods and services to the rest of the world. 
• U.S. purchases of goods and services from the rest of the world.
• the value of imports of goods and services minus the value of exports of goods and services. 

Which of the following expenditure components of GDP can be negative or positive?

• Consumption expenditures. 
• Investment expenditures.
• Government purchases of goods and services.
• Net exports of goods and services.