8. U.S. GDP and U.S. GNP are related as follows:
a. GNP = GDP + Value of exported goods - Value of imported goods.
b. GNP = GDP - Value of exported goods + Value of imported goods.
c. GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens
abroad.
d. GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens
abroad.
____ 16. Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied
housing and (2) purchases of newly-constructed homes. How are these two items accounted for when
GDP is calculated?
a. Both item (1) and item (2) are included in the consumption component of GDP.
b. Item (1) is included in the consumption component of GDP, while item (2) is included in
the investment component of GDP.
c. Item (1) is included in the investment component of GDP, while item (2) is included in the
consumption component of GDP.
d. Only item (2) is included in GDP, and it is included in the investment component.
____ 17. Goods that go into inventory and are not sold during the current period are
a. counted as intermediate goods and so are not included in current period GDP.
b. counted in current period GDP only if the firm that produced them sells them to another
firm.
c. included in current period GDP as inventory investment.
d. included in current period GDP as consumption.
____ 18. Transfer payments are
a. included in GDP because they represent income to individuals.
b. included in GDP because they eventually will be spent on consumption.
c. not included in GDP because they are not payments for currently produced goods or
services.
d. not included in GDP because taxes will have to be raised to pay for them.
____ 19.
____ 20. In the economy of Wrexington in 2008, consumption was $5300, GDP was $8800,
government purchases were $1800, imports were $500, and investment was $2000. What
were Wrexington’s exports in 2008?
a. -$800
b. -$300
c. $200
d. $300
Table 23-2
The table below contains data for the country of Wrexington for the year 2008.
Household purchases of durable goods
Household purchases of nondurable goods
Household purchases of services
Household purchases of new housing
Purchases of capital equipment
Inventory changes
$1293
$1717
$301
$704
$310
$374
Purchases of new structures
Depreciation
Salaries of government workers
Government expenditures on public works
Transfer payments
Foreign purchases of domestically produced goods
Domestic purchases of foreign goods
$611
$117
$1422
$553
$777
$88
$120
____ 21. Refer to Table 23-2. What was Wrexington’s consumption in 2008?
a. $2018
b. $3010
c. $3311
d. $4015
24.
The
____ 25. In the economy of Wrexington in 2008, real GDP was $5 trillion and the GDP deflator
was 200. What was Wrexington’s nominal GDP in 2008?
a. $2.5 trillion
b. $10 trillion
c. $40 trillion
d. $ The table below contains data for the country of Dachsland, which produces only
pretzels and books. The base year is 2005.
____ 26.
_