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51 Cards in this Set
- Front
- Back
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Ex. of an Intermediate Product: a. steel purchased by GM from USX Corp b. cheeseburger purchased by student c. golf shoes purchased by retired econ prof. d. NY Yankees memorabilia purchased by sporting goods store |
a. Steel purchased by GM from USX Corporation |
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Value added @ each stage of production = a. labor costs of the firm b. capital costs of the firm c. cost of raw materials punch. by firm d. diff between the value of a firms product & its payments to other firms that supplied inputs used in production e. revenue received by the firm |
d. The difference between the value of a firm's product and it's payments to other firms that supplied inputs used in producing the product. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX: A new computer produced by IBM, which remained unsold at the end of last year |
Counted, +, I Counted in GDP as an increase in Inventories "I" |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, C Counted in GDP; "C" |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, I Counted. Increase inventory investment by market value of 1000 computers |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, --, NX Counted. Decrease in Net Exports by $50,000 |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. This is an intermediate good whose value will be included in the value of the restaurant meals. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Stock is not a final good or service. (The broker's commission, however, would be counted in GDP, as "C", if a household paid the commission). |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted The property itself was not produced |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, C Counted in GDP. The service provided by the real estate agent is counted as part of "C". (Notice that the purchase price of the property is not counted, since it is just represented by an exchange of existing goods, not something newly produced). |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Intermediate products are excluded in GDP. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, C Counted. Increase in the private consumption of durables. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Goods that are not newly produced are not counted. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Not a transaction for the marketplace. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, G Counted. $100,000 increase in government purchases of services |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, NX Counted in GDP; "NX" |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Social Security payments are transfer payments, not government purchases. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, C Counted. $5 increase in private nondurable consumption |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, (Unsure) Counted. You are purchasing housing services from your landlord. |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Transfers are not considered a part of government expenditures |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Counted, +, C Counted. $1,000 increase in private consumption of services |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted Not Counted. Black market is also not included in GDP |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted The value of the used house does not enter GDP (There is a mere transfer, no production). Counted, +, C The broker fee increases private consumption services by $2,000 |
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Counted directly in GDP? Increase or decrease in C, I, G, or NX:
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Not Counted or Counted, +, C The air travel, if on a U.S. airline, would be included. If the travel is on a foreign carrier, it would not be included. Not Counted The wine and cheese would not be included. |
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During the current yr, Jess sold her house, built two yrs ago, to Kim for $175,000. Kim then sold the house to Dave for $185,000. How much does GDP increase due to these transactions? a. $0 b. $175,000 c. $185,000 d. $360,000 e. $10,000 |
e. $10,000 When Jess sold the house it was not new and does not count toward GDP. The house resold adds an additional $10,000 from the original GDP added when the house was built. |
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Which of the following would be included in the official calculation of GDP? a. You wash & was your fathers car as a favor b. A student buys a used textbook @ the bookstore c. You illegally download music off the internet d .Firestone sells $2 million worth of tires to GM e. You buy a new iPod |
e. You buy a new iPod |
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GoodYear produces 50k tires. 40k go on new cars and 10k are sold individually. How many tires would be counted in current GDP? a. 50k b. 40k c. 10k d. 0 |
c. 10,000, because 40,000 will be counted in the value of the new cars |
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A woman has an exterminator treat her house every month but she then marries the exterminator who now performs the service for free. As a result, GDP would: a. Increase b. decrease c. not change, because services are not counted in the first place d. not change, as activity occurred monthly e. not change, because the activity is an intermediate good or service |
b. decrease |
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An example of a transfer payment is: a. a teacher's paycheck b. a purchase of a new bridge in Alaska c. a welfare payment d. a paycheck for a member of the National Guard |
c. a welfare payment |
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Assume NX are -$340, private inv. is $1500, tax rev. are $800, govt purchases are $2k, and GDP-(expenditure approach) is $9k. Consumption expenditures must be: a. $1840 b. $12960 c. $5840 d. $4360 e. $5160 |
c. $5840 |
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If consumption expenditures increased by $150 million, while GDP remained the same, which of the following could have occurred, all else equal? a. Exports increased by $150 million b. Imports decreased by $150 million c. Net exports increased by $150 million d. Net exports decreased by $150 million e. Private invest increased $150 million |
d. Net exports decreased by $150 million |
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Which component of consumption spending is the greatest? a. nondurable goods b. durable goods c. services d. new housing |
c. new housing |
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Which of the following would be classified as a private investment? a. an individual's purchase of a used car b. a family's purchase of groceries c. An individual's purchase of a General Electric bond d. a family's purchase of a newly built home e. a family's purchase of a new car |
d. a family's purchase of a newly built home |
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A U.S. auto manufacturer produced $200 mil worth of automobiles in the U.S. in 2004, but $50 mil worth went unsold. How much was the companies contribution to GDP? a. $50 million b. $250 million c. $150 million d. $200 million e. $0 |
d. $200 million |
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Suppose a farmer buys $100 worth of seed and $50 worth of fertilizer, while spending $100 on hired help, to produce $400 worth of wheat. The value added by the farmer to the wheat is: |
$250 |
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The measure of production that values production using current prices is called: a. value added GDP b. nominal GDP c. underground GDP d. real GDP |
b. nominal GDP |
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Real GDP: a. equals government borrowing b. is the market value of a nation's aggregate production of final output, based on current prices c. is the same as the capital consumption allowance, based on market prices d. adjusts for changes in prices since a certain base year |
d. adjusts for changes in prices since a certain base year |
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Which component of GDP is most likely to be negative? a. Net export b. Gross private domestic investment c. Government purchases d. imports e. consumption |
a. Net exports |
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GDP is $7 trillion. If consumption is $5 trillion, investment is $2 trillion, and government purchases are $1 trillion, then: a. net exports are zero b. exports exceed imports by $1 trillion c. imports exceed exports by $1 trillion d. imports exceed exports by $2 trillion e. exports exceed imports by $2 trillion |
c. imports exceed exports by $1 trillion |
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Which is true if Personal consumption expenditures = 4000 billion, Gross private domestic investment = 1000 billion, Government purchases = 1000 billion, Exports = 600 billion and Imports = 600 billion a. GDP is 6,000 billion b. GDP is 7200 billion c. GDP is 6600 billion d. GDP is 6400 billion |
a. GDP is $6,000 billion |
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What is value added? |
Value added = Revenue - Cost of Intermediate Goods |
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If a firm bakes cookies and sells them for $1,000 while spending $100 on sugar, $150 on chocolate, $50 on other supplies, $300 on wages, and $400 on rent, what is it's value added? |
$700 |
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What is nominal GDP? |
The value of final goods and services evaluated at current-year prices |
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What is real GDP? |
The value of final goods and services evaluated at base year prices |
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GDP Deflator = |
GDP Deflator = (Nominal GDP/Real GDP) x 100 |
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If a German firm produces cars in the United States, that production should count toward: a. It will not affect either U.S. GNP or U.S. GDP b. U.S. GDP c. U.S. GNP d. German GDP |
b. U.S. GDP |
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The output of Mexican citizens who work in Texas would be included in the: a. gross domestic product of Mexico b. net national product of the United States c. gross national product of the United States d. gross national product of Mexico |
d. gross national product of Mexico |
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Total income in an economy is equal to: a. GDP minus net exports b. Income minus taxes c. the sum of wages, interest, rent, and profit d. firm revenues |
c. the sum of wages, interest, rent, and profit |
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For developed countries like the United States, GDP will always exceed GNP: |
False |
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National Income = |
National Income = GDP - Depreciation |
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Personal Income = |
Personal Income = National Income - Retained Earnings (Income received by households only) |
