PSU ECO 152_ LESSON 2_REVIEW 1

The GDP is the:

• monetary value of all final goods and services produced within a nation in a particular

  year.

• national income minus all transfers.

• monetary value of all economic resources used in producing a year's output.

• monetary value of all intermediate goods and services produced in a year

Which of the following is a final good or service?

• papers bought by a publishing house

• vegetable purchased by a restaurant owner

• lodging service in a hotel

• Fortuner windows purchased by a Toyota assembly plant

GDP can be calculated by summing:

• consumption, investment, government spending, exports, and imports.

• investment, government spending, consumption, and net exports.

• investment, profit, wages, and rents.

• consumption, investment, income’s proprietors, and imports

2.Which of the following is a good or service counted in GDP?

• tires Ford buys to put on a car

• a used tire you buy for your personal car

• a new tire you buy for your personal car

• used tires bought by a used car dealer to put on a car on his lot

This statement is True/False: The income of U.S. citizens working abroad counts in U.S. GDP.

• True

• False

This statement is True/False: GDP includes the sale of intermediate goods and excludes the sales of final goods

• True

• False

This statement is True/False: Social security payments and other public transfer payments are not counted as part of GDP

• True

• False

The sale in year 2 of an automobile produced in year 1 would not be include in the gross domestic product for year 2; doing so would involved

• Including a nonmarket transaction

• Including a nonproduction transaction

• Including a noninvestment transaction

• Public transfer payments

Which would be considered an investment according to economist?

• The purchase of newly issued shares of stock in Microsoft

• The construction of a new computer chip factory by intel

• The resale of stock originally issued by the general electric corporation

• The sale of a retail department store building by Sears to JCPenney

In an economy, the total expenditure for a market basket of goods in year 1 (the base year) was $4000 billion. In year 2, the total expenditure for the same market basket of goods was $4500 billion. What was the GDP price index for the economy in year 2?

• 0.88

• 1.13

• 188

• 113