**The expenditure approach to tabulating GDP: Question 1 options: adds consumpti
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Question
**The expenditure approach to tabulating GDP:
Question 1 options:
adds consumption expenditures, investment expenditures, government expenditures, interest payment and wages.
adds up the total amount spent on newly produced domestic goods and services during the year.
adds up the total value of all income earnings during the year.
excludes investment expenditures because they yield consumption in the future.
**Question 2 (1 point)
Question 2 Unsaved
Total income equals the dollar value of total output because:
Question 2 options:
foreign trade is allowed.
people spend all of their income in every period, so it must go some where.
of the definition of GDP
spending by one group represents income to the other group.
**Question 3 (1 point)
Total income RECEIVED by all factors of production is called:
Question 3 options:
national income.
personal income.
disposable personal income.
gross domestic income.
**Question 4 (1 point)
Question 4 Unsaved
What is the difference between nominal GDP and real GDP?
Question 4 options:
Nominal GDP represents purchasing power while real GDP is measured in terms of current dollars.
Nominal GDP is measured in current market prices while real GDP corrects for changes in the overall level of prices from year to year.
Nominal GDP is computed by using the expenditure approach while real GDP is computed by using the income approach.
Nominal GDP is the total value of output produced while real GDP is the amount per individual.
**Question 5 (1 point)
Question 5 Unsaved
Which of the following statements is NOT TRUE about the use of GDP as a measure of national welfare?
Question 5 options:
GDP is a useful measure of national welfare since it excludes nonmarket transactions.
GDP is limited as a measure of national welfare since it does not consider the amount of leisure time available to the nation's residents.
GDP is limited as a measure of national welfare since it does not consider environmental quality.
GDP is limited as a measure of national welfare since it does not account for labour market discrimination.
**Question 6 (1 point)
Question 6 Unsaved
According to the circular flow of income and output, which of the following is NOT TRUE?
Question 6 options:
Total income and total output must be equal.
Goods and services flow in one direction and money payments flow in the other direction.
In every economic transaction, the seller receives exactly the same amount that the buyer spends.
Goods, services and money all flow in one direction since money pays for the goods and services.
**Question 7 (1 point)
Question 7 Unsaved
When comparing per capita GDP across countries, GDP should be adjusted for:
Question 7 options:
foreign exchange rates.
purchasing power parity.
the unemployment rate.
population.
**Question 8 (1 point)
Question 8 Unsaved
If real GDP increases in any year, we know that:
Question 8 options:
nominal GDP must have risen.
both inflation and output have increased.
the output of goods and services produced this year has increased.
inflation has raised the value of output.
**Question 9 (1 point)
Question 9 Unsaved
An increase in corporate income taxes would reduce:
Question 9 options:
personal income.
national income.
net domestic product.
gross domestic product.
**Question 10 (1 point)
Question 10 Unsaved
An increase in social security benefits will make:
Question 10 options:
national income larger.
national income smaller.
personal income larger.
net domestic product smaller.
**Question 11 (1 point)
Question 11 Unsaved
Gross Domestic Product:
Question 11 options:
only includes "final" goods and services to avoid double counting.
does not include transfer payments or financial transactions.
does not include the transfer of second-hand goods.
all of the above.
**Question 12 (1 point)
Question 12 Unsaved
The problem with using foreign exchange rates to convert one country's GDP into dollars is that:
Question 12 options:
not all goods and services are sold on world markets.
exchange rates do not reflect differences in inflation rates.
the dollar has been losing value over the last twenty years.
the values of currencies are not comparable.
**Question 13 (1 point)
Question 13 Unsaved
In the factor market, households
Question 13 options:
1)
sell resources.
2)
buy resources.
3)
are neither buyers nor sellers of resources.
4)
are both buyers and sellers of resources.
Explanation / Answer
adds up the total amount spent on newly produced domestic goods and services during the year.
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