GDP MC Q's AP

• Nominal GDP-200 Real GDP-280

• Nominal GDP-200 Real GDP-200

• Nominal GDP-280 Real GDP-200

• Nominal GDP-280 Real GDP-560

• Nominal GDP-560 Real GDP-280

• A Nominal is $90, Real is $96

• B Nominal is $74, Real is $96

• C Nominal is $70, Real is $96

• D Nominal is $96, Real is $90

• E Nominal is $96, Real is $74

The value of which of the following is counted in the United States gross domestic product?

• A Clean air

• B Child care a father provides for his child

• C An automobile produced in Sweden by a United States firm

• D A car produced in the United States and sold in Europe

• E Medical services not provided due to preventative health care

4. If purchases of education and medical care were counted as investment rather than consumption, gross domestic product would

• A not change, because there is no change in total expenditures

• B increase, because investment is included in gross domestic product but consumption is not

• C increase, because consumption is included in gross domestic product but investment is not

• D decrease, because investment is weighted more heavily than consumption in calculating gross domestic product

• E decrease, because consumption is weighted more heavily than investment in calculating gross domestic product.

Gross domestic product has been criticized as a measure of well-being because it fails to take into account which of the following?

• A The distribution of income

• B The value of services

• C The value of intermediate goods

• D The value of financial transactions and sales of used items

• E The value of government services

6. The term “value added” for a firm is best defined as which of the following?

• A The firm’s sales

• B The firm’s sales minus depreciation

• C The firm’s sales minus its losses

• D The firm’s sales minus the cost of inputs purchased from other firms

• E The firm’s profits from its sales

7. GDP does NOT account for which of the following?

• A The value added by all firms in the economy

• B The depletion of natural resources

• C Wages, rent, profit, and interest payments

• D The value of final goods and services produced domestically

• E Imports from foreign countries

. Which of the following purchases will be counted as part of gross private investment in a country’s gross domestic product?

• A Government bonds

• B Shares of a company stock

• C Corporate bonds

• D A new car for personal use

• E A newly constructed home

Which of the following transactions would represent an addition to a nation's current gross domestic product?

• A Ms. Smith purchases a share of stock in an automobile company.

• B A retailer increases her stock of imported shoes.

• C The government increases its domestic purchases of food for use by the military.

• E A mother sells her car to her daughter.

• D A corporation sells shoes from last year's inventory.

10. In one year, spending on consumption, investment, and government purchases was equal to 103 percent of a country’s gross domestic product. This would be possible only if

• A the money supply increased

• B net exports were positive

• C net exports were negative

• D the government ran a budget surplus

• E the government had a balanced budget