Question 1

Explain the flows of money and goods between businesses and households.
-Explain how demand and supply flows between businesses and households.

Accepted Answer

The answer of Explain the flows of money and goods...

Question 2

Discuss the relationships of GDP, expenditures, and national income.
-How is GDP measured?

Accepted Answer

The answer of Discuss the relationships of GDP, expenditures, and...

Question 3

Discuss the relationships of GDP, expenditures, and national income.
-What is national income used for? How does this correspond to expenditures and GDP?

Accepted Answer

The answer of Discuss the relationships of GDP, expenditures, and...

Question 4

Describe the components of expenditures, GDP, and national income and explain how each is calculated.
-What are the components of expenditures? Describe each one in detail. What is the difference between gross and net expenditures?

Accepted Answer

The answer of Describe the components of expenditures, GDP, and...

Question 5

Describe the components of expenditures, GDP, and national income and explain how each is calculated.
-What are the sources of income from production? What are other sources of income to households?

Accepted Answer

The answer of Describe the components of expenditures, GDP, and...

Question 6

Describe how official government agencies track aggregate economic activity in great detail.
-What agency tracks flows of dollars and production?

Accepted Answer

The answer of Describe how official government agencies track aggregate...

Question 7

Describe how official government agencies track aggregate economic activity in great detail.
-What are some measures listed under national income?

Accepted Answer

The answer of Describe how official government agencies track aggregate...

Question 8

Explain the difference between GDP, GNP, and national income.
-How is GDP calculated? How is GNP calculated?

Accepted Answer

The answer of Explain the difference between GDP, GNP, and...

Question 9

Explain the difference between GDP, GNP, and national income.
-How is national income calculated from GNP?

Accepted Answer

The answer of Explain the difference between GDP, GNP, and...

Question 10

Discuss why GDP is not necessarily a reflection of social and individual well-being.
-What are some "costs" not captured by GDP?

Accepted Answer

The answer of Discuss why GDP is not necessarily a...

Question 11

Discuss why GDP is not necessarily a reflection of social and individual well-being.
-What goods and services are not captured by GDP?

Accepted Answer

The answer of Discuss why GDP is not necessarily a...

Question 12

Which of the following would be classified as Consumption spending?

Accepted Answer

Consumption spending refers to the buying of goods and services by households. Option C is the only choice that describes money spent by individuals for goods (food and clothing). Options A, B, and D describe spending that is not consumption spending. Option A refers to investment spending by a company, option B refers to government spending for public purposes, and option D is government spending for investment in infrastructure.

Question 13

Gross Domestic Product consists of spending on

Accepted Answer

GDP is the total value of goods and services produced within a country's borders. It is calculated as the sum of consumption, investment, government spending, and net exports (exports minus imports). Choice A includes all of these components. Choice B is incorrect because transfer payments, such as social security and welfare, are not included in GDP. Choice C is incorrect because imports are subtracted from GDP to arrive at net exports. Choice D is incorrect because depreciation is not a component of spending, it is a factor that reduces the value of investment.

Question 14

What is disposable personal income?

Accepted Answer

Disposable personal income refers to the income that remains after taxes have been deducted.

Question 15

What is included in employee compensation?

Accepted Answer

Employee compensation typically includes more than just wages and salaries. It can also include bonuses, commissions, and fringe benefits, such as health insurance, retirement plans, and paid time off. Option A and C are not comprehensive enough, while option D excludes fringe benefits.

Question 16

When exports are less than imports, the US

Accepted Answer

When exports are less than imports, it means that the country is spending more on imports than it is earning from exports. This results in a trade deficit.

Question 17

The circular flow of money refers to

Accepted Answer

The circular flow of money describes the movement of money through the economy, starting with households earning income, spending that income at businesses, who in turn use that income to pay for resources and labor from households, creating a cycle. Therefore, money moves from households to businesses and from businesses to households in a circular flow.

Question 18

Property income includes

Accepted Answer

Property income specifically refers to income earned from owning or renting out property, so the only options that are relevant are those that include rent and/or interest. Profit may also be considered as property income if it comes from the sale of property, but bonuses and commissions are generally not considered property income. Therefore, the best choice is D, which includes rent, interest, and profit.

Question 19

What agency tracks aggregate activity in the U.S. economy?

Accepted Answer

The Department of Commerce includes several agencies responsible for tracking and analyzing economic activity in the U.S., including the Bureau of Economic Analysis and the Census Bureau. The Bureau of Labor Statistics primarily focuses on labor market activity. The Office of Management and Budget is responsible for developing and overseeing the federal budget, and the Supreme Court is part of the judicial branch and not involved in economic tracking.

Question 20

What's the difference between GNP and GDP?

Accepted Answer

GDP includes all goods and services produced within a country's borders, regardless of who owns the resources or where the profits go. GNP, on the other hand, includes the value of all goods and services produced by a country's residents and businesses, regardless of their location. However, GNP also deducts the payments made to foreign nationals and companies who own resources within the country, and adds payments made to residents and businesses who own resources in other countries. Therefore, GDP includes receipts from the rest of the world and subtracts payments to the rest of the world, while GNP includes receipts from the rest of the world and adds payments to the rest of the world.

Quiz 37: National Income Accounting How to Map the Circulation of Money and Goods

Explain the flows of money and goods between businesses and households. -Explain how demand and supply flows between businesses and households.

Discuss the relationships of GDP, expenditures, and national income. -How is GDP measured?

Discuss the relationships of GDP, expenditures, and national income. -What is national income used for? How does this correspond to expenditures and GDP?

Describe the components of expenditures, GDP, and national income and explain how each is calculated. -What are the components of expenditures? Describe each one in detail. What is the difference between gross and net expenditures?

Describe the components of expenditures, GDP, and national income and explain how each is calculated. -What are the sources of income from production? What are other sources of income to households?

Describe how official government agencies track aggregate economic activity in great detail. -What agency tracks flows of dollars and production?

Describe how official government agencies track aggregate economic activity in great detail. -What are some measures listed under national income?

Explain the difference between GDP, GNP, and national income. -How is GDP calculated? How is GNP calculated?

Explain the difference between GDP, GNP, and national income. -How is national income calculated from GNP?

Discuss why GDP is not necessarily a reflection of social and individual well-being. -What are some "costs" not captured by GDP?

Discuss why GDP is not necessarily a reflection of social and individual well-being. -What goods and services are not captured by GDP?