2000

GDP is the market value of:

• Resources (land, labor, capital, and entrepreneurship) in an economy in a given year

• All final goods and services produced in an economy in a given year

• Consumption and investment spending in an economy in a given year

• All output produced and accumulated over the years

Firm A produces something that Firm B uses as an input. The product of Firm B, in turn, is purchased and used as an input by Firm C, and so on down the line through Firm E, which produces the end product. The total value added by Firms A-E from the production of the end product described here is:

• $3,000

• $3,800

• $6,500

• $10,300

Which of the following is included in GDP?

• Welfare payments received by some households

• Fees received by stockbrokers

• Cash gifts from relatives during the holidays

• Payments received from selling stocks in one's portfolio

National income accountants can avoid multiple counting by:

• including transfer payments in their calculations.

• only counting final goods.

• counting both intermediate and final goods.

• only counting intermediate goods.

The sale of a used automobile would not be included in GDP of the current year because it is a:

• Nonmarket transaction

• Nonproduction transaction

• Purely financial transaction

• Private transfer payment

The two ways of looking at GDP are the:

• Output approach and value-added approach

• Income approach and saving approach

• Expenditures approach and income approach

• Output approach and consumption approach

The largest expenditure component of the U.S. GDP is:

• Government purchases

• Personal consumption expenditures

• Gross private domestic investment

• Net exports

GDP in an economy is $11,050 billion. Personal consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross private domestic investment is $1,410 billion. Net exports are:

• + $53 billion

• - $47 billion

• - $84 billion

• - $161 billion

Real GDP refers to:

• the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income.

• GDP data that embody changes in the price level, but not changes in physical output.

• GDP data that reflect changes in both physical output and the price level.

• GDP data that have been adjusted for changes in the price level.

If real GDP declines in a given year, nominal GDP:

• Must also be declining

• Must also be increasing

• May either rise or fall

• Is likely to remain constant