Question 1

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for the United States? For countries with many citizens who work abroad?

Accepted Answer

The answer of What is the main conceptual difference between...

Question 2

If a local government collects taxes of $500,000,has $350,000 of government consumption expenditures,makes transfer payments of $100,000,and has no interest payments or investment,its budget would

Accepted Answer

The budget surplus is calculated by subtracting the total expenditures from the total taxes collected. Here, total expenditures include government consumption expenditures ($350,000) and transfer payments ($100,000), totaling $450,000. Subtracting this from the taxes collected ($500,000) results in a surplus of $50,000.

Question 3

Pete the Pizza Man produced $87,000 worth of pizzas in the past year.He paid $39,000 to employees,paid $11,000 for vegetables and other ingredients,and paid $5000 in taxes.He began the year with ingredient inventories valued at $1000,and ended the year with inventories valued at $2000.What was Pete's (and his employees')total contribution to GDP this year?

Accepted Answer

The answer of Pete the Pizza Man produced $87,000 worth...

Question 4

The government budget surplus equals

Accepted Answer

The government budget surplus is the amount by which government receipts exceed government outlays. Thus, the correct formula for calculating the government budget surplus is "government receipts minus government outlays." Option B represents this formula. Option A adds transfers to the formula, which is not accurate as transfers are part of government outlays. Option C subtracts net receipts, which is not a recognized formula. Option D subtracts transfers instead of outlays, which is incorrect.

Question 5

The uses-of-saving identity says that an economy's private saving is used for

Accepted Answer

The uses-of-saving identity in an economy states that private saving is used for investment, financing the government budget deficit, and funding the current account surplus. This reflects how savings within an economy are allocated towards domestic investment, lending to the government, and investing abroad.

Question 6

Private disposable income equals

Accepted Answer

Private disposable income is the income available to households after taxes and other government deductions have been made. It is calculated as national income minus taxes plus transfers plus interest.

Question 7

Carl's Computer Center sells computers to business firms.Businesses then use the computers to produce other goods and services.Over the past year,sales representatives were paid $3.5 million,$0.5 million went for rent on the building,$0.5 million went for taxes,$0.5 million was profit for Carl,and $10 million was paid for computers at the wholesale level.What was the firm's total contribution to GDP?

Accepted Answer

The answer of Carl's Computer Center sells computers to business...

Question 8

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

Accepted Answer

Private saving can be calculated using the following formula:
Private Saving = GDP - Taxes - Consumption - Government Purchases + Transfers Received + Net Factor Payments from Abroad - Interest Payments on Government Debt
Plugging in the values, we get:
Private Saving = $9841 - $869 - $8148 - $185 + $296 + $889 - $103
Private Saving = $2397

Question 9

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

Accepted Answer

Private saving can be calculated using the formula: Private saving = GDP + Net Factor Payments from Abroad - Taxes + Transfers - Consumption - Government Purchases. Plugging in the given values: Private saving = $9841 + $889 - $869 + $296 - $8148 - $185 = $2112.

Question 10

Private saving is defined as

Accepted Answer

Private saving is the portion of private disposable income that is not consumed but rather saved or invested, thus Private saving is defined as Private disposable income minus consumption. Option A correctly represents this definition.

Question 11

Which of the following equations describes the government deficit?

Accepted Answer

The government deficit is described by the equation G + TR + INT - T, where G is government spending, TR is transfer payments, INT is interest on debt, and T is taxes. This equation sums the government's expenditures (including spending, transfers, and interest payments) and subtracts its revenue (taxes) to find the deficit.

Question 12

The value of a household's assets minus the value of its liabilities is called

Accepted Answer

The value of a household's assets minus the value of its liabilities is called wealth. This represents the net worth of the household. Income is the money earned by the household, while debt represents the amount owed by the household. Stock refers to ownership in a company.

Question 13

In one year in the country of Countem,workers earned $4150,proprietor's income was $392,rental income was $20,corporate profits were $683,net interest was $228,taxes on production and imports were $329,business current transfer payments were $12,the current surplus of government enterprises was $3,statistical discrepancy was $28,consumption of fixed capital was $882,factor income received from the rest of the world was $331,and payments of factor income to the rest of the world was $623.Based on these data,compute national income,net national product,gross national product,and gross domestic product.

Accepted Answer

The answer of In one year in the country of...

Question 14

Monica grows coconuts and catches fish.Last year she harvested 1500 coconuts and 600 fish.She values one fish as having a worth of three coconuts.She gave Rachel 300 coconuts and 100 fish for helping her to harvest coconuts and catch fish,all of which were consumed by Rachel.Monica set aside 200 fish to help with next year's harvest.In terms of fish,consumption would equal

Accepted Answer

Since Rachel received 300 coconuts and 100 fish, we can convert the fish into coconuts using the given ratio of 1 fish = 3 coconuts. This gives Rachel a total of 300 + (100*3) = 600 coconuts. 
Therefore, Monica was left with 1500 - 300 - 600 = 600 coconuts for herself. 
Monica also set aside 200 fish for next year's harvest, which means she consumed 600 - 100 - 200 = 300 fish. 
Adding the fish Rachel consumed (100) and the fish Monica consumed (300), we get a total consumption of 400 fish. Therefore, the answer is B) 900 fish (since 400 + 500 = 900).

Question 15

Which of the following equations describes government saving?

Accepted Answer

Government saving is calculated as the difference between total government revenues (T) and total government spending, excluding interest payments on the debt (INT). Government spending includes transfer payments (TR) and government purchases of goods and services (G). Therefore, the correct formula is T - TR - INT - G.

Question 16

If a local government collects taxes of $250,000,has $175,000 of government consumption expenditures,makes transfer payments of $75,000,and has no interest payments or investment,its budget would

Accepted Answer

The budget is balanced because the total tax revenue ($250,000) equals the sum of government consumption expenditures ($175,000) and transfer payments ($75,000), with no surplus or deficit.

Question 17

In the country of Kwaki,people produce canoes,fish for salmon,and grow corn.In one year they produced 5000 canoes using labor and natural materials only,but sold only 4000,as the economy entered a recession.The cost of producing each canoe was $1000,but the ones that sold were priced at $1250.They fished $30 million worth of salmon.They used $3 million of the salmon as fertilizer for corn.They grew and ate $55 million of corn.What was Kwaki's GDP for the year?

Accepted Answer

The answer of In the country of Kwaki,people produce canoes,fish...

Question 18

Citizens of the country of Heehaw produce hay and provide entertainment services (banjo playing).In one year they produced $15 million worth of hay,with $11 million consumed domestically and the other $4 million sold to neighboring countries.They provided $7 million worth of banjo-playing services,$5 million in Heehaw,and $2 million in neighboring countries.They purchased $6 million worth of soda pop from neighboring countries.
Calculate the magnitudes of GNP,GDP,net factor payments from abroad,net exports,and the current account balance.

Accepted Answer

The answer of Citizens of the country of Heehaw produce...

Question 19

National saving equals private saving plus government saving,which in turn equals

Accepted Answer

National saving is the total income in the economy that remains after paying for consumption and government purchases, which is calculated as GDP plus Net Foreign Factor Income (NFP) minus Consumption (C) and Government spending (G).

Question 20

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had government saving equal to

Accepted Answer

Government saving is calculated as the difference between government revenue and government spending. Government revenue includes taxes and net factor payments from abroad, while government spending includes government purchases and transfers to the public. Interest payments on the government's debt are not considered part of the government's spending for the purpose of calculating government saving. Therefore, government saving = (Taxes + Net factor payments from abroad) - (Government purchases + Transfers) = ($869 + $889) - ($185 + $296) = $1758 - $481 = $1277. However, since none of the provided options match this calculation, it appears there was a mistake in my calculation based on the provided options. Re-evaluating the correct approach: Government saving should be calculated as Taxes - (Government purchases + Transfers). Thus, it should be $869 - ($185 + $296) = $869 - $481 = $388. This calculation was intended to find the correct answer, but it seems there was a misunderstanding in the interpretation of the options provided, leading to an incorrect initial explanation.

Quiz 2: The Measurement and Structure of the National Economy

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for the United States? For countries with many citizens who work abroad?

If a local government collects taxes of $500,000,has $350,000 of government consumption expenditures,makes transfer payments of $100,000,and has no interest payments or investment,its budget would

The government budget surplus equals

The uses-of-saving identity says that an economy's private saving is used for

Private disposable income equals

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

Private saving is defined as

Which of the following equations describes the government deficit?

The value of a household's assets minus the value of its liabilities is called

Which of the following equations describes government saving?

If a local government collects taxes of $250,000,has $175,000 of government consumption expenditures,makes transfer payments of $75,000,and has no interest payments or investment,its budget would

National saving equals private saving plus government saving,which in turn equals

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had government saving equal to