Question

I 1) Gross Domestic Product (GDP) is A) the total wholesale value of all final goods and services produced by factors of production owned by citizens of a nation B) the total market value of all services produced by factors of production located within a nation's borders. C) the total market value of all goods produced within a nation's borders D) the total market value of all final goods and services produced by factors of production located within a nation's borders. 12) Intermediate goods are A) goods that are used up entirely in the production of final goods. B) the stock of all resources excluding labor. C) goods that get sold to the U.S. government D) equal to the receipts of firms. 13) Suppose that for the economy of Springfield, we have the following information for 2013: consumption expenditures- $4,000; wages $3,500; gross private domestic investment- $900; imports- $1,100. Using the $1,300; government expenditures- $2,000; exports expendiure approach what would the Giross Domestic Product (GDP) be for Springfield in 2013? A) $6,200 B) $7,100 C) $7,500 D) $10,600 E) S12,800 14) Net domestic product (NDP) is A) Gross Domestic Product (GDP) minus depreciation. B) Gross Domestic Product (GDP) minus private investment. C) Gross Domestic Product (GDP) minus the foreign sector. D) Gross Domestic Product (GDP) minus government transfers. 15) The components of the expenditure approach to measuring Gross Domestic Product (GDP) include all of the following EXCEPT A) government purchases of goods and services. B) government Social Security payments. C) durable consumer goods. D) nondurable consumer goods.

Answer 1

ANSWERS :-

11)- OPTION D)

GDP CONSIDERS THE TOTAL MARKET VALUE OF ALL THE FINAL GOODS AND SERVICES PRODUCED BY FACTORS OF PRODUCTION WITHIN A NATION'S BORDERS....

12)- OPTION A)

INTERMEDIATE GOODS ARE THE GOODS USED IN THE PRODUCTION OF FINAL GOODS....

13)- OPTION B) $7100

EXPENDITURE APPROACH CALCULATES GDP AS :- PRIVATE FINAL CONSUMPTION EXPENDITURE + GOVERNMENT FINAL CONSUMPTION EXPENDITURE + GROSS PRIVATE INVESTMENT EXPENDITURE + NET EXPORTS

THEREFORE , GDP = $4000 + $1300 + $2000 + ($900 - $1100)

= $7100

14) - OPTION A)

GDP MINUS DEPRECIATION

GROSS MINUS DEPRECIATION GETS NET VALUE

15)- OPTION B)

GOVERNMENT SOCIAL SECURITY PAYMENTS ARE TRANSFER PAYMENTS AND DOES NOT INVOLVE ANY PRODUCTION ACTIVITY PAYMENT.....THEREFORE NOT INCLUDED...