Practice Worksheet for test 1. If May tag produces a washer and sells it, it counts as (consumption/investment/disinvestment). If they don’t sell it, it counts as (“c”/investment/disinvestment. If they don’t sell it until the next year, it counts as (“c”/ investment/disinvestment). 2. GDP is all goods/services produced (by a nation’s citizens all over the world /within the US). 3. National Income Accounting [just the first 2-GDP and NDP] a. GDP=C+Ig+G+X-M b. NDP=GDP-depreciation c. NI=NDP+NFFI-statistical Discrepancy d. PI=NI, U (-undis. Corp profits), Can (-corp. inc. taxes), See (-Soc. Security), Those (-Taxes on production and imports) Thunderducks (+ Transfer payments) (U Can See Those Thunderducks) e. DI=PI-Individual income taxes 4. Nominal GDP: Price Index x100=GDP 5. Workers most likely to get hurt during a depression are (durable/non-durable) ones because these goods are postponable and they have monopoly (few sellers) power. 6. Know the formulas and be able to apply them on the test. 7. In the base year, the price index is always? _______ 8. Income earned by US resource suppliers [here and abroad] is (NDP/NI/PI). 9. During a recession, (actual/potential) GDP exceeds (actual/potential) GDP, but the (actual/potential) unemployment rate exceeds the (actual/potential) unemployment rate.. 10. IF there are 5 milliion part time workers and 2 milliion get full time jobs, the unemployment rate (increases/decreases/stays the same). 11. If there are 6 milliion unemployed and 3 million get discouraged and quit looking, unemployment (increases/decreases/ stays the same 12. The presence of discouraged workers and counting part-time workers as fully employed (understates/overstates) the official rate. 13. If the unemployment rate is 10% and nominal GDP is $400 billiion, then cyclical (real unemployment is ___%, the % gap is ___% , and output (GDP) being forgone is $____________. 14. If unemployment is 15% a nominal GDP is $100 bil., then cyclical (real) unemployment is ___% the % gap is ___%, and Y being forgone is $________. NIA practice 1: Personal taxes 50 -Undistributed corp. profits 23 Exports 109 -Social Security contrib. 40 Imports 89 Personal consumption 358 +Transfer payments 41 Gross private domes invest. 130 -Corporate income taxes 38 Government purchases 165 -Taxes on prod. & imports 21 Depreciation [capital consumption] 45 Statistical Discrepancy 8 N.F.F.I.E. in the U.S. -23 C= $ _________ Ig = $ _________ G= $ _________ Xn = $ _________ Gross Domestic Product (GDP) -Consumption of fixed capital Net Domestic Product (NDP) _________ _________ _________ +Net For. Factor Inc. Earn. U.S. _________ -Statistical Discrepancy _________ National Income (NI) _________ -Undistributed Corporate Profits _________ -Corporate income taxes _________ -Social Security Contributions _________ -Taxes on prod. and imports _________ +Transfer payments _________ Personal Income (PI) _________ -Personal Taxes _________ Disposable Income (DI) _________ NIA practice 2: Personal taxes 60 -Undistributed corp. profits Exports 37 -Social Security contrib. 32 Imports 23 Personal consumption 312 +Transfer payments 50 Gross Investment 104 -Corporate income taxes 42 Government purchases 110 -Taxes on prod. & imports 34 N.F.F.I.E. in the U.S. Depreciation [cap. Consumption] 24 Statistical Discrepancy C= $ _________ Ig = $ _________ G= $ _________ Xn = $ _________ Gross Domestic Product (GDP) -Consumption of fixed capital Net Domestic Product (NDP) _________ _________ _________ +Net For. Factor Inc. Earn. U.S. _________ -Statistical Discrepancy _________ National Income (NI) _________ -Undistributed Corporate Profits _________ -Corporate income taxes _________ -Social Security Contributions _________ -Taxes on prod. and imports _________ +Transfer payments _________ Personal Income (PI) _________ -Personal Taxes _________ Disposable Income (DI) _________ 16 -30 14 NIA practice 3: Exports 34 -Undistributed corp. profits 35 Imports 32 -Social Security contrib. 25 +Transfer payments 42 Personal consumption 260 -Corporate Income Taxes 40 Gross private domes invest. 75 -Taxes on prod. & imports 30 Government purchases 100 Personal Taxes 50 Depreciation [capital consumption] 15 Statistical discrepancy 30 N.F.F.I. 20 C= $ _________ Ig = $ _________ G= $ _________ Xn = $ _________ Gross Domestic Product (GDP) -Consumption of fixed capital Net Domestic Product (NDP) _________ _________ _________ +Net For. Factor Inc. Earn. U.S. _________ -Statistical Discrepancy _________ National Income (NI) _________ -Undistributed Corporate Profits _________ -Corporate income taxes _________ -Social Security Contributions _________ -Taxes on prod. and imports _________ +Transfer payments _________ Personal Income (PI) _________ -Personal Taxes _________ Disposable Income (DI) _________