Purdue University North Central

                                                                  Economics 252

                                 Review Questions Chapter 5 - National Income Accounting

 

 

 

 

(1)        Suppose autos cost consumers $20,000 and trucks cost consumers $10,000.  What contribution does the production of 100 autos and trucks make to the GDP?

 

(a)        $30,000.

(b)        $2,000,000.

(c)        $3,000,000.

(d)        $300,000.

 

(2)        One difference between GDP and GNP results from sales:

 

(a)        in the underground economy.

(b)        of goods that are produced by foreign firms in the United States.

(c)        of exports from the United States to foreign countries.

(d)        in the United States which arrive as imports.

 

(3)        A commonly used measure of a country’s standard of living is:

 

(a)        nominal GDP.

(b)        real GDP.

(c)        GDP per capita.

(d)        NDP.

 

(4)        If the real U.S. GDP was $6,928.8 billion in 1996 and the U.S. population was 266 million, the per capita real GDP would have been approximately:

 

(a)        $462,700 per person.

(b)        $12,194 per person.

(c)        $38,390 per person.

(d)        $26,048 per person.

 

(5)        Which of the following is not a final good or service?

 

(a)        A printing press purchased by a printing company.

(b)        Automobile tires purchased by an auto manufacturing company.

(c)        Gasoline purchased for personal use by a family in the family car.

(d)        The preparation of your tax return by an accountant.

 

 

 

(6)        An electronic calculator manufacturer sells assembled calculators for $25 apiece.  If the manufacturer pays $10 for components in each calculator, the value added to each calculator by manufacturing is:

 

(a)        $25

(b)        $10

(c)        $35

(d)        $15

 

(7)        If nominal GDP was $7,241 billion in 1995 and the price level in 1995 was 106.7, then real GDP would have been approximately:

 

(a)        $5,675.2 billion.

(b)        $5,230.8 billion.

(c)        $6,786.4 billion.

(d)        $7,726.3 billion.

 

(8)        The national income aggregate calculated by subtracting capital consumption (depreciation) from GDP is known as:

 

(a)        net investment.

(b)        Net Domestic Product.

(c)        gross investment.

(d)        value added.

 

(9)        The stock of capital in the United States can grow only if:

 

(a)        depreciation is positive.

(b)        gross investment minus depreciation is positive.

(c)        GDP - NDP is positive.

(d)        All of the above.

 

(10)      Disposable income is:

 

(a)        Personal income - personal taxes.

(b)        National income - personal taxes.

(c)        Personal income - indirect business taxes.

(d)        Consumption - saving.