Test Review

```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. &amp; 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. &amp; 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. &amp; 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)
_________
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