ECON-UA 1 Chapter Notes - Chapter 10: Gdp Deflator

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6 Jul 2020

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Document Summary

How is gfp related to a nation"s income and spending. What are the 4 components of gdp. Measures total income of everyone in the economy. Measures total expenditure on the economy"s output of goods and services. Every dollar a buyer spends is a dollar of income for the seller. The market value of all final goods and services produced within a country in a given period of time. Intermediate goods: used as components in the production of other goods. Final goods: goods intended for the end user. Gdp includes tangible goods and intangible goods. Only measures the value of production that occurs within a country"s borders. Typically measured in a year or a quarter. Total spending by households on goods and services. Homeowners - consumption includes imputed rental value of house but not the purchase price. Total spending on goods that will be used in the future to produce more goods. Does not mean financial assets - stocks and bonds.

Related Questions

7. The difference between nominal GDP and real GDP is that nominal GDP:

	A.	measures a country's production of final goods and services at current market prices, whereas real GDP measures a country's production of final goods and services at the same prices in all years.
	B.	is measured in dollar terms, whereas real GDP is measured in terms of numbers of goods and services produced
	C.	measures the total value of only final goods and services, whereas real GDP measures the value of all goods and services, both intermediate and final
	D.	measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices

carminekoala560

1. In the actual economy, households

a. spend all of their income.

b. divide their income among spending, taxes, and saving.

c. buy all goods and services produced in the economy.

d. Both (a) and (c) are correct.

2. Gross domestic product is defined as

a. the quantity of all final goods and services demanded within a country in a given period of time.

b. the quantity of all final goods and services supplied within a country in a given period of time.

c. the market value of all final goods and services produced within a country in a given period of time.

d. Both (a) and (b) are correct.

3. GDP adds together many different kinds of products into a single measure of the value of economic activity by using prices determined by

a. banks.

b. economists.

c. the government.

d. markets.

4. 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

a. caused measured GDP to fall.

b. not caused any change in measured GDP.

c. caused measured GDP to rise.

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

5. A steel company sells some steel to a bicycle company for $150. The bicycle company uses steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

a. $150 to GDP.

b. $250 to GDP.

c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.

d. $400 to GDP.

6. The total sales of all firms in the economy for a year

a. equals GDP for the year.

b. is larger than GDP for the year.

c. is smaller than GDP for the year.

d. Any of the above is possible.

7. GDP is equal to

a. the market value of all final goods and services produced within a country in a given period of time.

b. Y.