27-101
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty:
02 Medium
Learning Objective: 27-02 Describe how expenditures on goods and services can be
summed to determine GDP.
Test Bank: II
Topic:
The Expenditures Approach
218. In an economy that is experiencing a shrinking production capacity,
219. In an economy that has stationary production capacity,
220. Disinvestment occurs when
27-102
221. Government purchases in national income accounts would include payments for
222. When local police and fire departments buy new cars for their operations, these are
counted as part of
223. A distinguishing characteristic of public transfer payments is that
224. Net exports is a positive number when
225. In the expenditures approach of national income accounting, C, Ig, and G include
expenditures for
27-104
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 27-02 Describe how expenditures on goods and services can be
summed to determine GDP.
Test Bank: II
Topic:
The Expenditures Approach
226. Computation of GDP by the expenditures method would include the purchase of
227. In the reservoir analogy for stock versus flow, the stock of capital is similar to the
228. In the reservoir analogy of stock and flow for the economy,
27-105
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 27-02 Describe how expenditures on goods and services can be
summed to determine GDP.
Test Bank: II
Topic:
The Expenditures Approach
229. If inflows to the capital stock are greater than outflows, then
230. GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion,
government purchases are $1,989 billion, and gross investment is $1,410 billion. Net
exports must be
231. The following are national income account data for a hypothetical economy in billions
of dollars: gross private domestic investment ($320), imports ($35), exports ($22),
personal consumption expenditures ($2,460), and government purchases ($470). What is
GDP in this economy?
232. The following are national income account data for a hypothetical economy in billions
of dollars: government purchases ($1,050), personal consumption expenditures ($4,800),
imports ($370), exports ($240), and gross private domestic investment ($1,130). Personal
consumption expenditures are approximately what percentage of this economy?
233. The expenditures or output approach to GDP measures it by summing up
27-107
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C.
the total spending for consumption, investment, net exports, and government purchases.
D. the total spending for consumption and government purchases, but subtracting public
and private transfer payments.
234.
Personal Consumption Expenditures
$4,500
Consumption of Fixed Capital
150
Gross Private Domestic Investment
800
Government Purchases
950
Exports
65
Imports
85
Refer to the accompanying data about a hypothetical economy (in billions of dollars). GDP
in this economy is
235.
Personal Consumption Expenditures
$4,500
27-108
Consumption of Fixed Capital
150
Gross Private Domestic Investment
800
Government Purchases
950
Exports
65
Imports
85
Refer to the accompanying data about a hypothetical economy (in billions of dollars). How
much are net exports of this economy?
236.
Disposable Income
$200
Net Private Domestic Investment
40
US Imports
15
National Income
300
Personal Taxes
31
Net Exports
9
Gross Private Domestic Investment
55
Net Foreign Factor Income
10
Statistical Discrepancy
0
Refer to the accompanying national income data (in billions of dollars). In these data, U.S.
exports are
27-109
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A. $9 billion.
B. $16 billion.
C.
$24 billion.
D. $28 billion.
237.
Disposable Income
$200
Net Private Domestic Investment
40
US Imports
15
National Income
300
Personal Taxes
31
Net Exports
9
Gross Private Domestic Investment
55
Net Foreign Factor Income
10
Statistical Discrepancy
0
Refer to the accompanying national income data (in billions of dollars). In these data, U.S.
GDP is
238. In 2014, the three largest economies in the world were (listed in order, from largest)
239.
1
Consumption of Fixed Capital
$438
2
Taxes on Production and Imports
326
3
Compensation of Employees
2,347
4
Rents
14
5
Interest
287
6
Proprietors’ Income
242
7
Corporate Profits
297
8
Personal Consumption Expenditures
2,582
9
Gross Private Domestic Investment
669
10
Government Purchases
815
11
Net Exports
-78
12
Net Foreign Factor Income
46
13
Statistical Discrepancy
50
Refer to the accompanying national income data (in billions of dollars). The expenditures
approach to GDP calculation can be done by adding
27-111
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B. 2 through 7.
C.
8 through 11.
D. 8 through 13.
240.
1
Consumption of Fixed Capital
$438
2
Taxes on Production and Imports
326
3
Compensation of Employees
2,347
4
Rents
14
5
Interest
287
6
Proprietors’ Income
242
7
Corporate Profits
297
8
Personal Consumption Expenditures
2,582
9
Gross Private Domestic Investment
669
10
Government Purchases
815
11
Net Exports
-78
12
Net Foreign Factor Income
46
13
Statistical Discrepancy
50
Refer to the accompanying national income data (in billions of dollars). The national
income in this economy can be estimated by adding items
27-112
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty:
02 Medium
Learning Objective: 27-03 Explain how GDP can be determined by summing up all of the
incomes that were derived from producing the economys output of goods and services.
Test Bank: II
Topic:
The Income Approach
241.
1
Consumption of Fixed Capital
$438
2
Taxes on Production and Imports
326
3
Compensation of Employees
2,347
4
Rents
14
5
Interest
287
6
Proprietors’ Income
242
7
Corporate Profits
297
8
Personal Consumption Expenditures
2,582
9
Gross Private Domestic Investment
669
10
Government Purchases
815
11
Net Exports
-78
12
Net Foreign Factor Income
46
13
Statistical Discrepancy
50
Refer to the accompanying national income data (in billions of dollars). Which items need
to be accounted for in going from national Income to GDP?
242. National income is the sum of employee compensation, profits, and the following
items, except
243. “Corporate profits” in the national income accounts consists of the following, except
244. “Net foreign factor income” in the national income accounts refers to the difference
between
27-114
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 27-03 Explain how GDP can be determined by summing up all of the
incomes that were derived from producing the economys output of goods and services.
Test Bank: II
Topic:
The Income Approach
245. Depreciation is all of the following, except
246. The “statistical discrepancy” that the NIPA includes in the data is to account for the
following, except
247.
Consumption of Fixed Capital
$25
27-115
Government Purchases
315
US imports
260
Personal Taxes
45
Transfer Payments
247
US Exports
249
Personal Consumption Expenditures
475
Net Foreign Factor Income
5
Gross Private Domestic Investment
300
Taxes on Production and Imports
245
Undistributed Corporate Profits
60
Social Security Contributions
240
Corporate Income Taxes
65
Statistical Discrepancy
40
Refer to the accompanying national income data (in billions of dollars). Gross domestic
product is
248.
Consumption of Fixed Capital
$25
Government Purchases
315
US imports
260
Personal Taxes
45
Transfer Payments
247
US Exports
249
Personal Consumption Expenditures
475
27-116
Net Foreign Factor Income
5
Gross Private Domestic Investment
300
Taxes on Production and Imports
245
Undistributed Corporate Profits
60
Social Security Contributions
240
Corporate Income Taxes
65
Statistical Discrepancy
40
Refer to the accompanying national income data (in billions of dollars). Net domestic
product equals
249.
Consumption of Fixed Capital
$25
Government Purchases
315
US imports
260
Personal Taxes
45
Transfer Payments
247
US Exports
249
Personal Consumption Expenditures
475
Net Foreign Factor Income
5
Gross Private Domestic Investment
300
Taxes on Production and Imports
245
Undistributed Corporate Profits
60
Social Security Contributions
240
Corporate Income Taxes
65
27-117
Statistical Discrepancy
40
Refer to the accompanying national income data (in billions of dollars). National income is
250.
Consumption of Fixed Capital
$25
Government Purchases
315
US imports
260
Personal Taxes
45
Transfer Payments
247
US Exports
249
Personal Consumption Expenditures
475
Net Foreign Factor Income
5
Gross Private Domestic Investment
300
Taxes on Production and Imports
245
Undistributed Corporate Profits
60
Social Security Contributions
240
Corporate Income Taxes
65
Statistical Discrepancy
40
Refer to the accompanying national income data (in billions of dollars). Personal income is
251.
Consumption of Fixed Capital
$25
Government Purchases
315
US imports
260
Personal Taxes
45
Transfer Payments
247
US Exports
249
Personal Consumption Expenditures
475
Net Foreign Factor Income
5
Gross Private Domestic Investment
300
Taxes on Production and Imports
245
Undistributed Corporate Profits
60
Social Security Contributions
240
Corporate Income Taxes
65
Statistical Discrepancy
40
Refer to the accompanying national income data (in billions of dollars). Disposable income
is
27-119
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 27-04 Describe the relationships among GDP, net domestic product,
national income, personal income, and disposable income.
Test Bank: II
Topic:
Other National Accounts
252.
Gross Private Domestic Investment
$1,593
Personal Taxes
1,113
Transfer Payments
1,683
Taxes on Production and Imports
695
Corporate Income Taxes
213
Personal Consumption Expenditures
7,304
Consumption of Fixed Capital
1,393
US Exports
1,059
Dividends
434
Government Purchases
1,973
Net Foreign Factor Income
10
Undistributed Corporate Profits
141
Social Security Contributions
748
US Imports
1,483
Statistical Discrepancy
50
Refer to the accompanying national income data (in billions of dollars). Net exports are
equal to
27-120
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Other National Accounts
253.
Gross Private Domestic Investment
$1,593
Personal Taxes
1,113
Transfer Payments
1,683
Taxes on Production and Imports
695
Corporate Income Taxes
213
Personal Consumption Expenditures
7,304
Consumption of Fixed Capital
1,393
US Exports
1,059
Dividends
434
Government Purchases
1,973
Net Foreign Factor Income
10
Undistributed Corporate Profits
141
Social Security Contributions
748
US Imports
1,483
Statistical Discrepancy
50
Refer to the accompanying national income data (in billions of dollars). Corporate profits
are equal to
254.