1102E - CHAPTER 2

The total market value of all final goods and services produced within a given period by factors of production located within a country is

• gross domestic product.
• gross national product.
• net national product.
• net national income.

Which of the following is an example of a final good or service?

• wheat a bakery purchases to make bread
• coffee beans Starbucks purchases to make coffee
• lumber purchased by a construction company to used in building houses
• a computer purchased by Federal Express to track shipments

Double counting can be avoided by

• including the value of intermediate goods in the current year.
• not counting the value of intermediate goods in GDP.
• including the value of intermediate goods in the GNP but not in the GDP.
• including the value of intermediate goods in the production year but not in the selling year of those goods.

Gross national product is the total market value of

• all final and intermediate goods and service produced by resources owned by a country in a given year.
• all final and intermediate goods and services produced in a country, regardless of who owns the resources.
• all final goods and services produced in a country in a given year, regardless of who owns the resources.
• all final goods and services produced by resources owned by a country, regardless of where production takes place.

Which of the following is included in both the U.S. GDP and GNP?

• The value of all cars produced by Ford in Mexico.
• The value of all cars produced by General Motors in the U.S.
• The value of all cars produced by Toyota in the U.S.
• The value of cars produced by Nissan in Japan and the U.S.

The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.

• GDP; GDP
• GNP; GNP
• GNP; GDP
• GDP; GNP

Profits earned in the United States by foreign-owned companies are included in

• the U.S. GDP but not GNP.
• neither the U.S. GDP nor GNP.
• the U.S. GNP but not GDP.
• both the U.S. GDP and GNP.

Income Mexican citizens earn in the U.S. counts in

• U.S. GNP.
• Mexican GNP.
• Mexican GDP.
• both U.S. and Mexican GDP.

The equation for GDP using the expenditure approach is

• GDP = C + I + G + EX - IM.
• GDP = C + I + G + (IM - EX).
• GDP = C + I + G + EX + IM.
• GDP = C + I + G - EX - IM.

Net investment equals

• GDP minus final sales.
• gross investment minus final sales.
• gross investment minus depreciation.
• depreciation plus GDP.