ECO100Y1 Study Guide - Gross Domestic Product

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purplemuskrat605

8 Jul 2013

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Each firm"s contribution to total output is equal to its value added. Value added = value of firm"s output - values of all intermediate goods and services. Sum of all values added produced in an economy is the economy"s total output (gdp) Gross domestic product (gdp): total value of goods and services produced in the economy during a given period. Expenditure approach: gdp = ca + ia + ga + (xa - ima) Ia = investment in plant and equipment, residential construction, inventory accumulation. Ga = government purchases of goods and services (xa - ima) = net exports of goods and services. Personal income: c + s + personal taxes. Desired aggregate expenditure (ae): sum of desired or planned spending on domestic output by households, firms, governments, and foreigners. Ae = c + i + g + (x - im) Net domestic income: ae - cca (depreciation) - indirect taxes (less subsidies)

Related Questions

An improvement in technology causes the production possibilities frontier (PPF) to

	shift to the right.
	pivot upward.
	shift to the left.
	pivot downward.

(7)

Which of the following is not shown by the circular flow model?

	The flow of resources in one direction and money in the other
	The equality of aggregate spending and aggregate income
	The interaction of households, firms, and the government
	The total amount of goods and services the economy can produce

(8)

Gross domestic product (GDP) is defined as

	the market value of all final goods and services produced in an economy in a given period of time.
	the market value of all consumption goods and services produced in an economy in a given period of time.
	the market value of all investment goods and services produced in an economy in a given period of time.
	the real value of all investment goods and services produced in an economy in a given period of time.

(9)

Real GDP

	includes all domestic and foreign transactions.
	includes the dollar value of domestic transactions only.
	tries to isolate the effect of changing output, holding prices constant.
	measures GDP in terms of prices of goods and services produced.

(10)

When economists talk about economic growth, they are usually referring to

	the percentage change in nominal GDP.
	the percentage change in real GDP.
	the percentage change in nominal investment.
	the percentage change in real investment.

chocolateant769

The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Category Components of GDP in 2013 (billions of dollars)

Consumer spending

Durable goods $1,263.0

Nondurable goods 2,622.9

Services 7,615.7

Private investment spending

Fixed investment spending 2,564.0

Nonresidential 2,047.1

Structures 456.4

Equipment and intellectual property products 1,590.7

Residential 516.9

Change in private inventories 106.1

Net exports

Exports 2,259.9

Imports 2,757.2

Government purchases of goods and services and investment spending

Federal 1,245.9

National defense 770.7

Nondefense 475.1

State and local 1,879.6

1) Calculate 2013 consumer spending.

2) Calculate 2013 private investment spending.

3) Calculate 2013 net exports.

4) Calculate 2013 government purchases of goods and services and government investment spending.

5) Calculate 2013 gross domestic product.

6) Calculate 2013 consumer spending on services as a percentage of total consumer spending.

7) Calculate 2013 exports as a percentage of imports.

8) Calculate 2013 government purchases on national defense as a percentage of federal government purchases of goods and services.

greenserval409

1. Gross Domestic Product equals the :
total output of all goods and services produced by resourceslocated in the U.S.
market value of all goods and services produced by resourceslocated in the U.S.
market value of all final goods and services produced by resourceslocated in the U.S.
value added to the economy by intermediate goods and services minusoriginal cost

2. Which of the following is not considered a component ofinvestment when calculating GDP?
new residential construction
construction of new factories
net increases in inventory
purchases of corporate stock

3. Which is true of leakages and injections in the circularflow?
Leakages minus injections equal GDP.
Injections minus leakages equal GDP.
Leakages minus injections equal zero in equilibrium.
Domestic leakages must equal domestic injections.

4. Because of activity in the underground economy,
GDP statistics understate the true volume of economicactivity
GDP statistics overstate the true prices in the economy
consumers are not as well off as GDP statistics indicate
firms' profits are higher than GDP statistics indicate

5. The consumer price index measures changes in
the prices of all goods and services
the prices of goods that are sold
the total cost of a specific market basket of consumer goods andservices
the total costs of all goods and services

6. The unemployment rate is the
percentage of people in the economy who do not hold jobs
percentage of the labor force that does not have a job
number of people in the economy who have given up looking foremployment
number of people in the labor force without jobs

7. Which of the following people would be classified asunemployed?
a person who wants a job as a fashion model but cannot find work inthat field
someone who quits a part-time job to attend school full-time
someone who gives up looking for a job
a person who works at a job that underemploys his or herskills

8. Frictional unemployment refers to unemployment that resultsfrom
a mismatch of skills
being in the wrong geographical location
taking the time to find the best job
seasonal decreases in demand for labor

9. If the aggregate demand curve shifts rightward,
the price level increases and output decreases
the resulting increase in the price level is usually calledcost-push inflation
the resulting increase in the price level is usually calleddemand-pull inflation
the price level increases only if there is also a leftward shift ofthe aggregate supply curve

10. The Consumer Price Index measures the cost of
all goods and services produced in the U.S. economy
all goods produced in the U.S. economy
a fixed market basket of consumer goods and services produced inthe U.S. economy
a fixed market basket of producer goods and services

ECO100Y1 Study Guide - Gross Domestic Product

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