Chapter 12: Gross Domestic Product Exam
Questions with Answers
1. National Income Accounting correct answer: A system that collects macroeconomic
statistics on production, income, investment, and savings
2. Gross Domestic Product correct answer: The dollar value of all final goods and services
produced with a country's borders in a given year
3. Dollar Value correct answer: total of the selling prices of all goods and services produced in
country in one year
4. Intermediate goods correct answer: goods used in the production of final goods
5. Final goods/ Services correct answer: products in form to sold to consumers
6. Expenditure Approach correct answer: economics estimate annual expenditure on 4
categories of final goods and services, then add total expenditures on all categories
7. Durable Goods correct answer: goods that last a long time
8. Nondurable Goods correct answer: goods that last a short period of time, such as food, light
bulbs and sneakers
9. Income Approach correct answer: calculates GDP by adding all incomes in economy
10. Nominal GDP correct answer: GDP measured in current prices - use current years prices
to calculate value of current years output but increase in process appears to make GDP rise
11. Read GDP correct answer: GDP expressed in constant, or unchanging prices when real
GDP rise, can be certain whether economy producing more goods, regardless of changing prices
12. Nonmarket Activities correct answer: doesn't measure what people make/ do
themselves, does rise when people pay someone to do these things
13. Underground Economy correct answer: black market/informal transactions, adds
nothing to GDP
14. Negative Externalities correct answer: clean environment isn't counted in GDP ,
even though cleaned up areas have social value
15. Quality of Life correct answer: GDP measures output/income within economy, not
individuals quality of life
16. Gross National Product correct answer: the annual income earned by US owned
firms and US citizens; derived from GDP
17. Depreciation correct answer: the loss of the value of capital equipment that results from
1/
5
, normal wear and tear
18. GNP -cost of depreciation= correct answer: net national product
19. NNP- sales/excise taxes= correct answer: national income
20. Personal Income correct answer: how much pretax income businesses actually pay
to US households after reinvesting some of their income and paying additional taxes
21. Disposable Income correct answer: how much money people actually have to spend
after paying taxes; personal income minus individual income taxes.
22. Aggregate Supply correct answer: supply curve for whole economy
2/
5
Questions with Answers
1. National Income Accounting correct answer: A system that collects macroeconomic
statistics on production, income, investment, and savings
2. Gross Domestic Product correct answer: The dollar value of all final goods and services
produced with a country's borders in a given year
3. Dollar Value correct answer: total of the selling prices of all goods and services produced in
country in one year
4. Intermediate goods correct answer: goods used in the production of final goods
5. Final goods/ Services correct answer: products in form to sold to consumers
6. Expenditure Approach correct answer: economics estimate annual expenditure on 4
categories of final goods and services, then add total expenditures on all categories
7. Durable Goods correct answer: goods that last a long time
8. Nondurable Goods correct answer: goods that last a short period of time, such as food, light
bulbs and sneakers
9. Income Approach correct answer: calculates GDP by adding all incomes in economy
10. Nominal GDP correct answer: GDP measured in current prices - use current years prices
to calculate value of current years output but increase in process appears to make GDP rise
11. Read GDP correct answer: GDP expressed in constant, or unchanging prices when real
GDP rise, can be certain whether economy producing more goods, regardless of changing prices
12. Nonmarket Activities correct answer: doesn't measure what people make/ do
themselves, does rise when people pay someone to do these things
13. Underground Economy correct answer: black market/informal transactions, adds
nothing to GDP
14. Negative Externalities correct answer: clean environment isn't counted in GDP ,
even though cleaned up areas have social value
15. Quality of Life correct answer: GDP measures output/income within economy, not
individuals quality of life
16. Gross National Product correct answer: the annual income earned by US owned
firms and US citizens; derived from GDP
17. Depreciation correct answer: the loss of the value of capital equipment that results from
1/
5
, normal wear and tear
18. GNP -cost of depreciation= correct answer: net national product
19. NNP- sales/excise taxes= correct answer: national income
20. Personal Income correct answer: how much pretax income businesses actually pay
to US households after reinvesting some of their income and paying additional taxes
21. Disposable Income correct answer: how much money people actually have to spend
after paying taxes; personal income minus individual income taxes.
22. Aggregate Supply correct answer: supply curve for whole economy
2/
5
