Deck 7: Measuring Domestic Output and National Income

Question 1

A nation's gross domestic product (GDP)

A) $\text { can be found by summing } C + I _ { g } + G + X _ { n }$
B) is the dollar value of the total output produced by its citizens, regardless of where they are living.
C) $\text { can be found by summing } C + S + G + X _ { n } \text {. }$
D) $\text { is always some amount less than its NDP. }$

Answer 1

$\text { can be found by summing } C + I _ { g } + G + X _ { n }$

Question 2

The National Income and Product Accounts (NIPA) help economists and policymakers to

A) determine which firms are likely to succeed or fail.
B) follow the long-run course of the economy to determine whether it has grown or stagnated.
C) measure what is occurring in each specific labor market.
D) accomplish all of these.

Answer 2

follow the long-run course of the economy to determine whether it has grown or stagnated.

Question 3

The system that measures the economy's overall performance is formally known as

A) national income accounting.
B) business cycle measurement.
C) GDP assessment.
D) final output and income statistics.

Answer 3

national income accounting.

Question 4

Which of the following transactions would be included in GDP?

A) Mary buys a used book for $5 at a garage sale.
B) Nick buys $5,000 worth of stock in Microsoft.
C) Olivia receives a tax refund of $500.
D) Peter buys a newly constructed house.

Question 5

Tom Atoe grows fruits and vegetables for home consumption. This activity is

A) excluded from GDP in order to avoid double counting.
B) excluded from GDP because an intermediate good is involved.
C) productive but is excluded from GDP because no market transaction occurs.
D) included in GDP because it reflects production.

Question 6

By summing the dollar value of all monetary transactions in the economy, we would

A) determine the market value of all resources used in the production process.
B) obtain a sum substantially larger than GDP.
C) determine value added for the economy.
D) measure GDP.

Question 7

Final goods and services refers to

A) goods and services that are unsold and therefore added to inventories.
B) goods and services whose value has been adjusted for changes in the price level.
C) goods and services purchased by ultimate users, rather than for resale or further processing.
D) the excess of U.S. exports over U.S. imports.

Question 8

Which of the following is an intermediate good?

A) the purchase of gasoline for a ski trip to Colorado
B) the purchase of baseball uniforms by a professional baseball team
C) the purchase of a pizza by a college student
D) the purchase of jogging shoes by a professor

Question 9

Suppose the total monetary value of all final goods and services produced in a particular country in a year is $500 billion and the total monetary value of final goods and services sold is $450 billion.
We can conclude that

A) GDP that year is $450 billion.
B) NDP is $450 billion.
C) GDP that year is $500 billion.
D) inventories fell by $50 billion.

Question 10

Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells
The dresses for $1,200 to kids attending the prom. The total contribution to GDP of this series of
Transactions is

A) $1,200.
B) $500.
C) $2,300.
D) $1,100.

Question 11

The agency responsible for compiling the National Income and Product Accounts for the U.S. economy is the

A) Council of Economic Advisers.
B) Bureau of Economic Analysis.
C) National Bureau of Economic Research.
D) Bureau of Labor Statistics.

Question 12

Alejandro Scoobertini owns a store specializing in soccer jerseys. One year, he purchased $150,000 worth of jerseys from manufacturers and later that year, sold the jerseys for $280,000. Based on this
Information, what was the value added at Alejandro's store?

A) $130,000
B) $150,000
C) $280,000
D) $40,000

Question 13

The value added of a firm is the market value of

A) a firm's output plus the value of the inputs bought from others.
B) a firm's output less the value of the inputs bought from others.
C) the firm's output.
D) the firm's inputs bought from others.

Question 14

GDP is the

A) national income minus all nonincome charges against output.
B) monetary value of all final goods and services produced within the borders of a nation in a particular year.
C) monetary value of all economic resources used in producing a year's output.
D) monetary value of all goods and services, final and intermediate, produced in a specific year.

Question 15

A nation's gross domestic product (GDP)

A) is the dollar value of all ?nal output produced within the borders of the nation during a speci?c period of time.
B) is the dollar value of all ?nal output produced by its citizens, regardless of where they are living.
C) $\text { can be found by summing } C + I _ { n } + S + X _ { n } \text {. }$
D) $\text { is always some amount less than } C + I _ { g } + G + X _ { n }$

Question 16

National income accountants can avoid multiple counting by

A) including transfer payments in their calculations.
B) only counting final goods.
C) counting both intermediate and final goods.
D) only counting intermediate goods.

Question 17

Which of the following is a final good or service?

A) a haircut purchased by a father for his 12-year-old son
B) fertilizer purchased by a farm supplier
C) diesel fuel bought for a delivery truck
D) Chevrolet windows purchased by a General Motors assembly plant

Question 18

If intermediate goods and services were included in GDP,

A) then GDP would be overstated.
B) then GDP would then have to be deflated for changes in the price level.
C) nominal GDP would exceed real GDP.
D) then GDP would be understated.

Question 19

Gross domestic product (GDP) measures and reports output

A) as an index number.
B) in percentage terms.
C) in dollar amounts.
D) in quantities of physical units (for example, pounds, gallons, and bushels).

Question 20

Suppose Smith pays $100 to Jones.

A) We can say with certainty that the GDP has increased by $100.
B) We can say with certainty that the GDP has increased, but we cannot determine the amount.
C) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased.
D) We need more information to determine whether GDP has changed.

Question 21

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock

A) may have either increased or decreased.
B) increased by $65 billion.
C) increased by $55 billion.
D) decreased by $55 billion.

Question 22

In 1933, net private domestic investment was a minus $6.0 billion. This means that

A) gross private domestic investment exceeded depreciation by $6.0 billion.
B) the economy was expanding that year.
C) the production of 1933's GDP used up more capital goods than were produced that year.
D) the economy produced no capital goods at all in 1933.

Question 23

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each
Speaker is

A) $110.
B) $30.
C) $40.
D) $70.

Question 24

If depreciation exceeds gross investment,

A) the economy's stock of capital may be either growing or shrinking.
B) the economy's stock of capital is shrinking.
C) the economy's stock of capital is growing.
D) net investment is zero.

Question 25

Value added refers to

A) any increase in GDP that has been adjusted for adverse environmental effects.
B) the excess of gross investment over net investment.
C) the difference between the value of a firm's output and the value of the inputs it has purchased.
D) the portion of any increase in GDP that is caused by inflation as opposed to an increase in real output.

Question 26

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is

A) $300,000.
B) $100,000.
C) $200,000.
D) zero dollars.

Question 27

An economy is enlarging its stock of capital goods

A) when net investment exceeds gross investment.
B) when gross investment exceeds depreciation.
C) whenever gross investment is positive.
D) when depreciation exceeds gross investment.

Question 28

GDP can be calculated by summing

A) personal consumption, investment, government purchases, exports, and imports.
B) personal consumption, investment, government purchases, and net exports.
C) personal consumption, investment, wages, and rents.
D) personal consumption, investment, government purchases, and imports.

Question 29

In national income accounting, the personal consumption expenditures category includes purchases of

A) both new and used consumer goods.
B) automobiles for personal use but not houses.
C) consumer durable and nondurable goods but not services.
D) consumer nondurable goods and services but not consumer durable goods.

Question 30

Which of the following is not economic investment?

A) the purchase of a new drill press by the Ajax Manufacturing Company
B) the purchase of 100 shares of AT&T by a retired business executive
C) construction of a suburban housing project
D) the piling up of inventories on a grocer's shelf

Question 31

Which of the following do national income accountants consider to be investment?

A) the purchase of an automobile for private, nonbusiness use
B) the purchase of a new house
C) the purchase of corporate bonds
D) the purchase of gold coins

Question 32

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment
Economy C: gross investment exceeds depreciation
Based on this information, positive net investment is occurring in

A) economy A only.
B) economy B only.
C) economy C only.
D) economies A and B only.

Question 33

Net exports are negative when

A) a nation's imports exceed its exports.
B) the economy's stock of capital goods is declining.
C) depreciation exceeds domestic investment.
D) a nation's exports exceed its imports.

Question 34

Value added can be determined by

A) summing the profits of all enterprises in the economy.
B) subtracting the purchase of intermediate products from the value of the sales of final products.
C) calculating the year-to-year changes in real GDP.
D) deflating nominal GDP.

Question 35

Economy A: gross investment equals depreciation
Economy B: depreciation exceeds gross investment
Economy C: gross investment exceeds depreciation
Other things equal, the information suggests that the production capacity in economy

A) B is growing more rapidly than that in either economy A or C.
B) A is growing more rapidly than that in either economy B or C.
C) A is growing less rapidly than that in economy B.
D) C is growing more rapidly than that in economy B.

Question 36

In national income accounting, the personal consumption expenditures category includes purchases of

A) both new and used consumer goods.
B) consumer durable goods and consumer nondurable goods but not services.
C) consumer durable goods, consumer nondurable goods, and services.
D) changes in business inventories.

Question 37

When an economy's production capacity is expanding,

A) nominal GDP, but not necessarily real GDP, is rising.
B) net exports is always a positive amount.
C) DI exceeds PI.
D) gross domestic investment exceeds depreciation.

Question 38

The concept of net domestic investment refers to

A) the amount of machinery and equipment used up in producing the GDP in a specific year.
B) the difference between the market value and book value of outstanding capital stock.
C) gross domestic investment less net exports.
D) total investment less the amount of investment goods used up in producing the year's output.

Question 39

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that

A) nominal GDP is rising but real GDP is declining.
B) net investment is negative.
C) the economy is importing more than it exports.
D) the economy's production capacity is expanding.

Question 40

Net exports are

A) that portion of consumption and investment goods sent to other countries.
B) exports plus imports.
C) exports less imports.
D) imports less exports.

Question 41

$$\begin{array} { | l | c | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). GDP is

A) $390.
B) $417.
C) $422.
D) $492.

Question 42

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories fell by $10 billion. GDP in year 2 is

A) $180 billion.
B) $190 billion.
C) $200 billion.
D) $210 billion.

Question 43

Transfer payments are

A) excluded when calculating GDP because they only reflect inflation.
B) excluded when calculating GDP because they do not reflect current production.
C) included when calculating GDP because they are a category of investment spending.
D) included when calculating GDP because they increase the spending of recipients.

Question 44

In calculating GDP, governmental transfer payments, such as Social Security or unemployment compensation, are

A) not counted.
B) counted as investment spending.
C) counted as government spending.
D) counted as consumption spending.

Question 45

Suppose that inventories were $40 billion in year 1 and $50 billion in year 2. For year 2, national income accountants would

A) add $10 billion to other elements of investment in calculating total investment.
B) subtract $10 billion from other elements of investment in calculating total investment.
C) add $45 billion (= $90/2) to other elements of investment in calculating total investment.
D) subtract $45 billion (= $90/2) from other elements of investment in calculating total investment.

Question 46

The value of U.S. imports is

A) added to exports when calculating GDP because imports reflect spending by Americans.
B) subtracted from exports when calculating GDP because imports do not constitute spending by Americans.
C) subtracted from exports when calculating GDP because imports do not constitute production in the United States.
D) added when calculating GDP because imports do not constitute production in the United States.

Question 47

In year 1, Trailblazer Bicycle Company produced a mountain bike that was delivered to a retail outlet in November of that same year. The bicycle was sold to E.Z. Ryder in March of the next year, year 2.
This bicycle is counted as

A) consumption in year 1 and as negative investment in year 2.
B) negative investment in year 1 and as consumption in year 2.
C) negative investment in year 1 and as investment in year 2.
D) investment in year 1 and as negative investment in year 2.

Question 48

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year
2 is

A) $180 billion.
B) $190 billion.
C) $200 billion.
D) $210 billion.

Question 49

$$\begin{array} { | l | c | } \hline \text { Government Purchases } & \$ 15 \\\hline \text { Consumption } & 90 \\\hline \text { Gross Investment } & 20 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 5 \\\hline \text { Exports } & 8 \\\hline \text { Imports } & 12 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). NDP (net domestic product) is

A) $116.
B) $121.
C) $125.
D) $150.

Question 50

In calculating the GDP, national income accountants

A) treat inventory changes as an adjustment to personal consumption expenditures.
B) ignore inventories because they do not represent final goods.
C) subtract increases in inventories or add decreases in inventories.
D) add increases in inventories or subtract decreases in inventories.

Question 51

The ZZZ Corporation issued $25 million in new common stock in 2020. It used $18 million of the proceeds to buy new equipment to replace obsolete equipment in its factory and $7 million to repay
Bank loans. As a result, investment

A) of $7 million occurred.
B) of $25 million occurred.
C) of $18 million occurred.
D) has not occurred.

Question 52

National income accountants define investment to include

A) any increase in business inventories.
B) the addition of cash to a savings account.
C) the purchase of common or preferred stock.
D) the purchase of any durable good, for example, an automobile or a refrigerator.

Question 53

If the economy adds to its inventory of goods during some year,

A) gross investment will exceed net investment by the amount of the inventory increase.
B) this amount should be ignored in calculating that year's GDP.
C) this amount should be subtracted in calculating that year's GDP.
D) this amount should be included in calculating that year's GDP.

Question 54

In national income accounting, government purchases include

A) purchases by federal, state, and local governments.
B) purchases by the federal government only.
C) government transfer payments.
D) purchases of goods for consumption but not public capital goods.

Question 55

The largest component of total expenditures in the United States is

A) net exports.
B) government purchases.
C) personal consumption.
D) gross investment.

Question 56

Suppose that inventories were $80 billion in year 1 and $70 billion in year 2. For year 2, national income accountants would

A) add $10 billion to other elements of investment in calculating total investment.
B) subtract $10 billion from other elements of investment in calculating total investment.
C) add $75 billion (= $150/2) to other elements of investment in calculating total investment.
D) subtract $75 billion (= $150/2) from other elements of investment in calculating total investment.

Question 57

Government purchases include government spending on

A) government consumption goods and public capital goods.
B) government consumption goods only.
C) public capital goods only.
D) government consumption goods, public capital goods, and transfer payments.

Question 58

$$\begin{array} { | l | c | } \hline \text { Government Purchases } & \$ 15 \\\hline \text { Consumption } & 90 \\\hline \text { Gross Investment } & 20 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 5 \\\hline \text { Exports } & 8 \\\hline \text { Imports } & 12 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). GDP is

A) $116.
B) $121.
C) $125.
D) $150.

Question 59

In the treatment of U.S. exports and imports, national income accountants

A) subtract exports, but add imports, in calculating GDP.
B) subtract both exports and imports in calculating GDP.
C) add both exports and imports in calculating GDP.
D) add exports, but subtract imports, in calculating GDP.

Question 60

The smallest component of aggregate spending in the United States is

A) net exports.
B) government purchases.
C) investment.
D) consumption.

Question 61

$$\begin{array} { | l | c | } \hline \text { Personal Consumption Expenditures } & \$ 400 \\\hline \text { Government Purchases } & 128 \\\hline \text { Gross Private Domestic Investment } & 88 \\\hline \text { Net Exports } & 7 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Consumption of Fixed Capital } & 43 \\\hline \text { Taxes on Production and Imports } & 50 \\\hline \text { Compensation of Employees } & 369 \\\hline \text { Rents } & 12 \\\hline \text { Interest } & 15 \\\hline \text { Proprietors' Income } & 52 \\\hline \text { Corporate Income Taxes } & 36 \\\hline \text { Dividends } & 24 \\\hline \text { Undistributed Corporate Profits } & 22 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying national income data for the economy. All ?gures are in billions of dollars. The gross domestic product for this economy is

A) $584.
B) $592.
C) $609.
D) $623.

Question 62

$$\begin{array} { | l | r | } \hline \text { Gross Investment } & \$ 18 \\\hline \text { National Income } & 100 \\\hline \text { Net Exports } & 2 \\\hline \text { Personal Income } & 85 \\\hline \text { Personal Consumption Expenditures } & 70 \\\hline \text { Saving } & 5 \\\hline \text { Government Purchases } & 20 \\\hline \text { Net Domestic Product } & 105 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). The gross domestic product for this economy is

A) $100.
B) $95.
C) $110.
D) $107.

Question 63

$$\begin{array} { | l | c | } \hline \text { Proprietors' Income } & \$ 20 \\\hline \text { Compensation of Employees } & 300 \\\hline \text { Consumption of Fixed Capital } & 15 \\\hline \text { Gross Investment } & 80 \\\hline \text { Rents } & 10 \\\hline \text { Interest } & 20 \\\hline \text { Exports } & 30 \\\hline \text { Imports } & 50 \\\hline \text { Corporate Profits } & 25 \\\hline \text { Taxes on Production and Imports } & 5 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. Net domestic product is

A) $395.
B) $380.
C) $375.
D) $360.

Question 64

$$\begin{array} { | l | c | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. Personal income is

A) $184.
B) $221.
C) $149.
D) $228.

Question 65

$$\begin{array} { | l | c | } \hline \text { Proprietors' Income } & \$ 20 \\\hline \text { Compensation of Employees } & 300 \\\hline \text { Consumption of Fixed Capital } & 15 \\\hline \text { Gross Investment } & 80 \\\hline \text { Rents } & 10 \\\hline \text { Interest } & 20 \\\hline \text { Exports } & 30 \\\hline \text { Imports } & 50 \\\hline \text { Corporate Profits } & 25 \\\hline \text { Taxes on Production and Imports } & 5 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. National income is

A) $395.
B) $380.
C) $375.
D) $360.

Question 66

$$\begin{array} { | l | r | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. The gross domestic product is

A) $326.
B) $282.
C) $307.
D) $300.

Question 67

$$\begin{array} { | l | c | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. The national income is

A) $265.
B) $223.
C) $208.
D) $346.

Question 68

$$\begin{array} { | l | c | } \hline \text { Personal Consumption Expenditures } & \$ 400 \\\hline \text { Government Purchases } & 128 \\\hline \text { Gross Private Domestic Investment } & 88 \\\hline \text { Net Exports } & 7 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Consumption of Fixed Capital } & 43 \\\hline \text { Taxes on Production and Imports } & 50 \\\hline \text { Compensation of Employees } & 369 \\\hline \text { Rents } & 12 \\\hline \text { Interest } & 15 \\\hline \text { Proprietors' Income } & 52 \\\hline \text { Corporate Income Taxes } & 36 \\\hline \text { Dividends } & 24 \\\hline \text { Undistributed Corporate Profits } & 22 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying national income data for the economy. All ?gures are in billions of dollars. The national income is

A) $561.
B) $573.
C) $580.
D) $530.

Question 69

$$\begin{array} { | l | c | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). PI is

A) $314.
B) $346.
C) $408.
D) $437.

Question 70

$$\begin{array} { | l | r | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. The economy characterized by the data is

A) experiencing in?ation because disposable income exceeds personal income.
B) experiencing declining production capacity because net investment is negative.
C) in a depression because personal income exceeds disposable income.
D) experiencing expanding production capacity because net private domestic investment is positive.

Question 71

$$\begin{array} { | l | r | } \hline \text { Personal Consumption Expenditures } & \$ 400 \\\hline \text { Government Purchases } & 128 \\\hline \text { Gross Private Domestic Investment } & 88 \\\hline \text { Net Exports } & 7 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Consumption of Fixed Capital } & 43 \\\hline \text { Taxes on Production and Imports } & 50 \\\hline \text { Compensation of Employees } & 369 \\\hline \text { Rents } & 12 \\\hline \text { Interest } & 15 \\\hline \text { Proprietors' Income } & 52 \\\hline \text { Corporate Income Taxes } & 36 \\\hline \text { Dividends } & 24 \\\hline \text { Undistributed Corporate Profits } & 22 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying national income data for the economy. All ?gures are in billions of dollars. Disposable income

A) cannot be determined from the data given.
B) is $484.
C) is $416.
D) is $502.

Question 72

$$\begin{array} { | l | c | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). NDP is

A) $370.
B) $402.
C) $392.
D) $467.

Question 73

$$\begin{array} { | l | c | } \hline \text { Personal Consumption Expenditures } & \$ 400 \\\hline \text { Government Purchases } & 128 \\\hline \text { Gross Private Domestic Investment } & 88 \\\hline \text { Net Exports } & 7 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Consumption of Fixed Capital } & 43 \\\hline \text { Taxes on Production and Imports } & 50 \\\hline \text { Compensation of Employees } & 369 \\\hline \text { Rents } & 12 \\\hline \text { Interest } & 15 \\\hline \text { Proprietors' Income } & 52 \\\hline \text { Corporate Income Taxes } & 36 \\\hline \text { Dividends } & 24 \\\hline \text { Undistributed Corporate Profits } & 22 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying national income data for the economy. All ?gures are in billions of dollars. Net domestic product is

A) $520.
B) $580.
C) $623.
D) $573.

Question 74

$$\begin{array} { | l | c | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). NI is

A) $362.
B) $382.
C) $447.
D) $402.

Question 75

$$\begin{array} { | l | r | } \hline \text { Gross Investment } & \$ 18 \\\hline \text { National Income } & 100 \\\hline \text { Net Exports } & 2 \\\hline \text { Personal Income } & 85 \\\hline \text { Personal Consumption Expenditures } & 70 \\\hline \text { Saving } & 5 \\\hline \text { Government Purchases } & 20 \\\hline \text { Net Domestic Product } & 105 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). Disposable income is

A) $83.
B) $73.
C) $75.
D) $77.

Question 76

$$\begin{array} { | l | r | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). DI is

A) $284.
B) $329.
C) $274.
D) $402.

Question 77

$$\begin{array} { | l | c | } \hline \text { Proprietors' Income } & \$ 20 \\\hline \text { Compensation of Employees } & 300 \\\hline \text { Consumption of Fixed Capital } & 15 \\\hline \text { Gross Investment } & 80 \\\hline \text { Rents } & 10 \\\hline \text { Interest } & 20 \\\hline \text { Exports } & 30 \\\hline \text { Imports } & 50 \\\hline \text { Corporate Profits } & 25 \\\hline \text { Taxes on Production and Imports } & 5 \\\hline \text { Net Foreign Factor Income } & 0 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. Gross domestic product is

A) $395.
B) $380.
C) $375.
D) $360.

Question 78

$$\begin{array} { | l | c | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data. All ?gures are in billions of dollars. The net domestic product is

A) $233.
B) $255.
C) $230.
D) $348.

Question 79

$$\begin{array} { | l | r | } \hline \text { Gross Investment } & \$ 18 \\\hline \text { National Income } & 100 \\\hline \text { Net Exports } & 2 \\\hline \text { Personal Income } & 85 \\\hline \text { Personal Consumption Expenditures } & 70 \\\hline \text { Saving } & 5 \\\hline \text { Government Purchases } & 20 \\\hline \text { Net Domestic Product } & 105 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). Consumption of ?xed capital (depreciation) is

A) $5.
B) $10.
C) $20.
D) $30.

Question 80

$$\begin{array} { | l | r | } \hline \text { Gross Investment } & \$ 18 \\\hline \text { National Income } & 100 \\\hline \text { Net Exports } & 2 \\\hline \text { Personal Income } & 85 \\\hline \text { Personal Consumption Expenditures } & 70 \\\hline \text { Saving } & 5 \\\hline \text { Government Purchases } & 20 \\\hline \text { Net Domestic Product } & 105 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). From this information we can conclude that the net foreign factor income is

A) negative $5 billion.
B) zero.
C) positive $5 billion.
D) positive $15 billion.