42- Gross domestic product includes all of the following except: Consumer goods

Question

42- Gross domestic product includes all of the following except:

Consumer goods and services.

State and local government purchases.

Exports.

Federal government expenditures on income transfers.

39- Suppose during the course of a year an economy produces $20 trillion of consumer goods, $5 trillion of investment goods, $10 trillion in government services, and has $6 trillion of exports and $4 trillion of imports. For this economy, GDP would be:

$45 trillion.

$37 trillion.

$35 trillion.

$33 trillion.

34- Nearly 19 percent of U.S. output consists of:

Consumer goods and services.

Investment.

Government purchases.

Exports.

17-Since estimates of GDP are based on market purchases, not surveys of production, in order to get an accurate reading of domestic production, we must:

Add the value of imports.

Ignore the value of imports.

Subtract the value of imports.

Add the value of imports only when imports are less than exports.

Mining and manufacturing.

Private investment.

Farm production.

Consumption spending.

Consumer goods and services.

State and local government purchases.

Exports.

Federal government expenditures on income transfers.

Explanation / Answer

42. Ans: Federal government expenditures on income transfers.

Explanation:

Federal government expenditures on income transfers is a social security benefit which is not included in GDP. Because this is the reallocation of money from one party to another.

39. Ans: $37 trillion

Explanation:

GDP = C + I + G + (X - M)

         = 20 + 5 + 10 + (6 - 4)

         = $37 trillion

34. Ans: Government purchases.

Explanation:

U.S. output consists of

C = 71%

G = 19%

I = 13%

NX = -3%

17. Ans: Subtract the value of imports.

Explanation:

GDP = C + I + G + X - M          [ Where, M = Import]

11. Ans: Consumption spending.

U.S. GDP consists of

C = 71%

G = 19%

I = 13%

NX = -3%

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