Multiple Choice Identify the letter of the choice that best completes the statem
ID: 1095026 • Letter: M
Question
Multiple Choice Identify the letter of the choice that best completes the statements or answers the question. Gross Domestic Product equals the Which of the following would be included in GDP? Other things equal, increased imports decrease GDP. Which of the following is not considered a component of investment when calculating GDP? U.S. imports are Net exportsis the value of The largest component of aggregate expenditure is The two basic markets in the simple circular flow model are the In the resource market. Disposable income equals personal income minus indirect business taxes. Taxes are an injection into the circular flow. Exports are an injection into the circular flow. Imports are a leakage from the circular flow. Which of the following is an injection into the spending stream? GDP reflects many things; however, it does not reflect the depletion of natural resources, leisure, or many things we as individuals do for ourselves. GDP understates total economic activity because it ignores household production of goods and services. GDP is a good measure of social welfare since it includes the value of leisure time. Use the following data to calculate GDP: consumption = $2,000; gross investment = $600; government purchases =* S500; net exports = $40; transfer payments = $340. If real GDP increased by 3 percent, then The price index in the base year always equals In order to convert nominal GDP to real GDP, we must divide To accurately measure the growth rate of output between two years, one should useExplanation / Answer
Answer question
1. Gross domestic product equals to market value of all final goods and services poduced by resources located in the U.S.
2. Payment of the monthly telephone bill by Mr. Laconic would be included in GDP
3. True. Increased imports decreases GDP
4. Purhcase of corporate stock is not considered as an investment while calcualting GDP
5. US imports are added into US GDP becasue they represent increase in inventory
6. Net exports is equal to exports minus the value of imports
7. The largest component of aggregate expenditure is consumption expenditure
8. The basic markets in the simple circular flow are household and business market.
9. In the resource market, businesses borrow money for the captial resoruces they need.
10. False. Disposable income is equal to personal income minus indirect business taxes plus subsidies
11.False. Taxes are not injections into the circualr flow. in fact, they are leakages.
12. True. Exports are injections into the circular flow
13. True. Imports are leakages from the circular flow
14. interest on savings is an injection into the spending stream
15. True. GDP does not reflect depletion of resources, leisure and many other things that we do as individuals.
16. False. GDP does not understates total economic activity as it includes household production of goods and services.
17. False. GDP is not the good measure of social welfare as it does not include the value of leisure time
18. The formula for calcuating
GDP = Consumpiton expenditure + Investment expenditure +Government expenditure+ Net exports
GDP = 2000 +600 +500 - 40 = $3,060
Therefore, GDP = $3,060
19. If real GDP has increased by 3 percent then real output has increased by 3 percent
20. The price index in the base year is always equal to 100
21. In order to convert nominal GDP into real GDP, we must divide nominal GDP by price index
22. To accurately measure growth rate of output between two years, one should use real gross domestic product.
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