Colander Chapter 7
Exam Questions and
Answers
User [Date] [Course title]
, Aggregate accounting - Correct Answer: a set of rules and definitions for measuring economic activity in
the economy as a whole
GDP - Correct Answer: The total market value of all final goods produced in an economy in one year. It's
flow, not a stock, measure of activity
Divided into four types of expenditures:
GDP=Consumption+Investment+Government spending+Net exports
Net domestic product - Correct Answer: GDP - Depreciation
NDP represents output available for purchase because production used to replace worn-out plant and
equipment (depreciation) has been subtracted
GDP describes - Correct Answer: the economic output produced within the physical borders of an
economy, while GNP describes the economic output produced by the citizens of a country
National wealth accounts - Correct Answer: The stock equivalent of the national income accounts
Aggregate income= - Correct Answer: Compensation to employees+Rent+Interest+Profit
Aggregate income equals aggregate production because - Correct Answer: whenever a good is
produced, somebody receives income for producing it. Profit is key to that equality.
Because the US has a trade deficit, total expenditures by US citizens are _______________ production in
the US - Correct Answer: greater than
To compare income over time, we must _____________. After ____________, nominal measure are
changed to _______________ - Correct Answer: adjust for price-level changes; adjusting for inflation;
"real" measures
Exam Questions and
Answers
User [Date] [Course title]
, Aggregate accounting - Correct Answer: a set of rules and definitions for measuring economic activity in
the economy as a whole
GDP - Correct Answer: The total market value of all final goods produced in an economy in one year. It's
flow, not a stock, measure of activity
Divided into four types of expenditures:
GDP=Consumption+Investment+Government spending+Net exports
Net domestic product - Correct Answer: GDP - Depreciation
NDP represents output available for purchase because production used to replace worn-out plant and
equipment (depreciation) has been subtracted
GDP describes - Correct Answer: the economic output produced within the physical borders of an
economy, while GNP describes the economic output produced by the citizens of a country
National wealth accounts - Correct Answer: The stock equivalent of the national income accounts
Aggregate income= - Correct Answer: Compensation to employees+Rent+Interest+Profit
Aggregate income equals aggregate production because - Correct Answer: whenever a good is
produced, somebody receives income for producing it. Profit is key to that equality.
Because the US has a trade deficit, total expenditures by US citizens are _______________ production in
the US - Correct Answer: greater than
To compare income over time, we must _____________. After ____________, nominal measure are
changed to _______________ - Correct Answer: adjust for price-level changes; adjusting for inflation;
"real" measures
