Deck 23: National Income Accounts

Question 1

What accounts for the difference between GDP and NDP?

A)inventory changes
B)depreciation
C)undistributed corporate profits
D)transfer payments
E)business taxes

Answer 1

B

Question 2

National income captures all income earned by American-owned resources,whether located in the United States or abroad.

Answer 2

True

Question 3

Income earned but not received refers to

A)government transfers,business transfers,and social insurance taxes
B)government transfers,social insurance taxes,and corporate income taxes
C)business transfers,net personal interest income,and rental income
D)social insurance taxes,undistributed corporate profits,and corporate income taxes
E)business transfers,social insurance taxes,and corporate profits

Answer 3

D

Question 4

In 2007,if the country of Moolah had consumption of $20 trillion,gross investment of $4 trillion,government purchases of $5 trillion,and GDP of $26 trillion,then net exports must have been

A)+ $3 trillion
B)+ $29 trillion
C)- $29 trillion
D)- $3 trillion
E)The question cannot be answered without knowing the amount of imports

Question 5

The reason that indirect business taxes are subtracted from NDP to get NI is that they

A)represent income received but not earned
B)do not represent income to any individual
C)represent income that we earn but do not receive
D)represent investment undertaken merely to replace worn-out capital
E)reflect double counting of intermediate goods

Question 6

Factors that explain the differences between National Income and Personal Income include all of the following,except one.Which is the exception?

A)Social Security contributions paid by employers
B)corporate income taxes
C)undistributed corporate profits
D)government and business transfers
E)indirect business taxes

Question 7

Disposable Income is Personal Income minus personal taxes.

Question 8

The income approach to GDP reveals that compensation of employees (i.e.,wages and salaries)is larger than profits.

Question 9

Disposable income is

A)personal income minus personal taxes
B)national income plus transfer payments
C)NDP minus personal income tax
D)personal income minus transfer payments
E)national income minus transfer payments plus taxes

Question 10

Personal income is

A)NDP minus indirect business taxes
B)NDP minus depreciation minus taxes
C)national income minus taxes
D)national income plus income received but not earned minus income earned but not received
E)national income minus income received but not earned plus income earned but not received

Question 11

Disposable income is personal income after taxes.

Question 12

Disposable income is commonly referred to as take home pay.

Question 13

Which one of the following is not included in National Income?

A)employee compensation
B)proprietors' income
C)rental incomes of persons
D)corporate profits
E)gross interest income

Question 14

Which of the following does not help account for the difference between GDP and National Income (NI)?

A)depreciation
B)net indirect business taxes
C)personal income taxes
D)earnings of American owned resources located abroad
E)earnings of foreign owned resources located in the U.S.

Question 15

Personal income equals national income minus personal taxes.

Question 16

The difference between Personal Income and Disposable Income is

A)personal taxes (e.g.,federal personal income tax)
B)indirect business taxes
C)corporate income taxes
D)payroll taxes paid by employers
E)Social Security contributions paid by employers

Question 17

National Income is best defined as sum of all income earned by

A)American-owned resources,located in the U.S.and abroad
B)resources located in the U.S.
C)American-owned resources located abroad
D)American-owned resources minus income earned by foreign owned resources located in the U.S.
E)American owned resources in the U.S.minus income earned by American owned resources located abroad

Question 18

Imputed rent is included in

A)consumption
B)investment
C)government spending
D)national income
E)indirect business taxes

Question 19

Personal income minus personal taxes equals disposable income.

Question 20

National income is

A)GDP minus depreciation
B)NDP minus depreciation
C)GDP minus depreciation plus indirect business taxes
D)GDP plus depreciation minus indirect business taxes
E)NDP minus indirect business taxes