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Chapter 07 - Measuring Domestic Output and National Income
140. Refer to the above diagram. Which of the following statements is correct?
141. In an economy experiencing a persistently falling price level:
142. If real GDP rises and the GDP price index has increased:
Chapter 07 - Measuring Domestic Output and National Income
143. In determining real GDP, economists adjust the nominal GDP by using the:
144. The fact that nominal GDP has risen faster than real GDP:
145. Which of the following activities is excluded from GDP, causing GDP to understate a
nation's well-being?
Chapter 07 - Measuring Domestic Output and National Income
146. Which of the following activities is excluded from GDP, causing GDP to understate a
nation's production?
147. A large underground economy results in an:
148. The GDP tends to:
Chapter 07 - Measuring Domestic Output and National Income
149. GDP excludes:
150. The growth of GDP may understate changes in the economy's economic well-being over
time if the:
151. Environmental pollution is accounted for in:
Chapter 07 - Measuring Domestic Output and National Income
152. Assume that the size of the underground economy increases both absolutely and
relatively over time. As a result:
153. (Consider This) When making a capital stock and reservoir analogy, the:
154. (Consider This) When making a capital stock and reservoir analogy, the:
Chapter 07 - Measuring Domestic Output and National Income
155. (Consider This) Capital is a:
156. (Last Word) The U.S. government agency responsible for compiling the national income
accounts is the:
157. (Last Word) Which of the following is a source of data for the consumption component
of the U.S. GDP?
Chapter 07 - Measuring Domestic Output and National Income
158. (Last Word) Which of the following is a source of data for the investment component of
U.S. GDP?
159. Within the circular flow model, the level of total resource income and total spending on
output will be approximately equal.
160. In determining GDP by the expenditures method it is appropriate to use net investment
rather than gross investment as a measure of investment spending.
Chapter 07 - Measuring Domestic Output and National Income
161. Gross private domestic investment exceeds depreciation in an economy that experiences
expanding production capacity.
162. Interest on the public debt is included as a part of government purchases in determining
GDP by the expenditures method.
163. All expenditures on new construction are included as investment in calculating GDP.
164. Exports are subtracted from imports in calculating U.S. GDP because exports are not
available for domestic consumption.
Chapter 07 - Measuring Domestic Output and National Income
165. The purchase of Wal-Mart stock is a part of gross investment, but not of net investment.
166. The simplest way to calculate GDP is to sum the total sales of all business firms.
167. Personal income usually exceeds disposable income.
168. Welfare payments to low-income families are included in national income.
Chapter 07 - Measuring Domestic Output and National Income
169. Disposable income measures the before-tax income received by resource suppliers.
170. NDP can be determined by adding taxes on production and imports to GDP.
171. If nominal GDP is 150 and the GDP price index is 200, real GDP is 75.
172. If real GDP is 50 and nominal GDP is 100, the GDP price index is 200.
Chapter 07 - Measuring Domestic Output and National Income
173. Real GDP accounts for changes in product quality; nominal GDP does not.
