Gross Domestic Product Accounting
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1. Final goods are
a. goods that are not used in the production of other goods.
b. goods that are produced domestically but sold to consumers in other countries.
c. goods that are used in the production of other goods.
d. goods that are included in GNP but not in GDP.
2. Durable goods are
a. goods used to produce other goods.
b. goods manufactured in one country in a factory owned by another country.
c. goods expected to last more than a year.
d. goods that firms keep in reserve to facilitate sales.
3. The expenditure approach to GDP calculation
a. adds all expenditures for final goods and service by households, firms and the government.
b. adds all expenditures by households and the government, but not firms.
c. adds all expenditures by households and firms, but not the government.
d. does not include durable goods.
4. The four expenditure categories of GDP are
a. durable goods, final goods, inventories, government expenditures.
b. consumption, investment, government expenditures, net exports.
c. consumption, final goods, government expenditures, net exports.
d. consumption, investment, inventories, government expenditure.
5. The largest share of U.S. government expenditures is found in
a. defense expenditures by the federal government.
b. non-defense expenditures by the federal government.
c. expenditures by state and local governments.
d. foreign aid.
6. Which of the following would
NOT
be included in the income approach to calculating gross domestic product?
a. rent on an apartment
b. corporate dividends
c. interest on bonds
d. All would be included in GDP.
e. None of them would be included in GDP.
7. Gross National Product equals
a. the sum of consumption, investment, government purchases and net exports plus indirect taxes.
b. national income plus indirect taxes.
c. gross domestic product plus capital depreciation.
d. the sum of consumption, investment, government purchases, and exports minus imports.
8. Indirect taxes are taxes that are levied on
a. firms.
b. individuals.
c. goods and services.
d. imports.
9. Honda owns several automobile plants in Kentucky. The production of these plants
a. would be included in the U.S. gross domestic product.
b. would be included in the U.S. gross national product.
c. would be included in the Japanese gross domestic product.
d. would not be included in the GNP of either country.
10. To reconcile the difference between gross national product and national income, we
a. add government purchases and depreciation to gross national product.
b. subtract government purchases and depreciation from gross national product.
c. add depreciation and indirect business taxes to gross national product.
d. subtract depreciation and indirect business taxes from gross national product.
11. U.S. national income for the year 2000
a. does not include interest paid on corporate bonds paid during 2000.
b. includes all income earned during 2000, but not income received but not earned during that year.
c. includes all income received during 2000.
d. is equal to personal income minus direct taxes paid during 2000.
12. Personal income
a. is the income people actually earned in a given year, whether they actually receive it or not.
b. is the payment people actually receive in a given year.
c. would not include transfer payments made by the government to individuals.
d. is all income received minus taxes paid.
13. Disposable personal income is personal income
a. minus indirect taxes.
b. minus direct taxes.
c. plus transfer payment.
d. minus transfer payments.
14. GNP is an NOT an accurate measure of the economy's size because it does not include
a. activities in the cash economy.
b. government expenditures.
c. direct taxes.
d. indirect taxes.
15. GDP calculations would be more accurate if they were reduced by
a. the value of unpaid housework.
b. the value of transactions in the underground economy.
c. the cost of environmental damage.
d. the value of our leisure time.
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