macro

Which of the following is not included in GDP?

• unpaid cleaning and maintenance of houses

• services such as those provided by lawyers and hair stylists

• the estimated rental value of owner-occupied housing

• production of foreign citizens living in the United States

Which of the following transactions adds to U.S. GDP for 2006?

• In 2006, Ashley sells a car that she bought in 2002 to William for $5,000.

• An American management consultant works in Mexico during the summer of 2006 and earns the equivalent of $30,000 during that time.

• When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 per month. 

• None of the above transactions adds to GDP for 2006.

Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has

• caused GDP to fall.

• not caused any change in GDP.

• caused GDP to rise.

• probably changed GDP, but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted.

A steel company sells some steel to a bicycle company for $100. The bicycle company uses the steel to produce a bicycle, which it sells for $200. Taken together, these two transactions contribute

• $100 to GDP

• $200 to GDP. 

• between $200 and $300 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.

• $300 to GDP.

Grapes are

• always counted as an intermediate good.

• counted as an intermediate good only if they are used to produce another good such as wine.

• counted as an intermediate good only if they are consumed.

• counted as an intermediate good, whether they are used to produce another good or consumed.

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006. In 2007 it sells all 25 cars. Which of the following statements is correct?

• The full value of the increased inventory will be counted as part of GDP in 2006, and the value of the cars sold in 2007 will not cause 2007 GDP to increase.

• The value of the increased inventory will not affect 2006 GDP; instead, the full value of the inventory will be counted as part of 2007 GDP.

• The value of the increased inventory will be counted as part of 2006 GDP and the value of the cars sold in 2007 will increase 2007 GDP.

• One-half of the value of the increased inventory will be counted as part of 2006 GDP and the other one-half of the value will be counted as part of 2007 GDP.

Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,0000. Which of the following statements is correct regarding the sale of the house?

• The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP.

• The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP.

• The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000.

• The 2006 sale affected neither 2005 GDP nor 2006 GDP.

An American company operates a fast food restaurant in Romania. Which of the following statements is accurate?

• The value of the goods and services produced by the restaurant is included in both Romanian GDP and U.S. GDP.

• One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other one-half of the value is included in U.S. GDP.

• The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U.S. GDP.

• The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in Romanian GDP.

U.S. GDP and U.S. GNP are related as follows:

• GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad. 

• GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad.

• GNP = GDP + Value of exported goods - Value of imported goods.

• GNP = GDP - Value of exported goods + Value of imported goods.

 In a certain small country, the unit of currency is the huck. That country's government recently announced that "GDP amounted to 400 million hucks in the quarter that just ended." Assuming this country has adopted American GDP accounting conventions, this statement means that GDP,

• without seasonal adjustment, amounted to 100 million hucks in the quarter that just ended.

• with seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. 

• .without seasonal adjustment, amounted to 400 million hucks in the quarter that just ended.

• with seasonal adjustment, amounted to 400 million hucks in the quarter that just ended.