ECO 201 Principles of Microeconomics Chapter 8 Quiz Answers
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Saint Leo ECO 201 Chapter 8 Quiz Answers
1. The flow of gross domestic product during a given interval must always be equivalent to the flow of gross domestic
2. According to the circular flow of income and output, which of the following is not true?
3. Total income can be viewed as the sum of
4. Total income equals the dollar value of total output because
5. In the circular flow of income
6. Each year after a regular spring cleaning, Maria spruces up her home a little by retexturing and repainting the walls of one room in her house. In a given year, she spends
$23 on magazines to get ideas about wall textures and paint shades, $42 on newly produced texturing materials and tools, $34 on new paintbrushes and other painting equipment, and $177 on newly produced paint. Normally, she preps the walls, a service that a professional wall-texturing specialist would charge $209 to do, and applies two coats of paint, a service that a painter would charge $342 to do, on her own.
7. Explain what happens to contributions to in each of the following situations.
8. Which of the following activities of a computer manufacturer during the current year are included in this year's measure of
9. The combined effect of these events on for the year 2015 was
10. The loss in national welfare will
11. Which of the following statements is not true about the use of GDP as a measure of national welfare?
12. The following table gives the per loaf sales values at each stage of bread production:
Stage of Production
|
$ Value of Sales
|
Stage 1: Seed, fertilizer
|
$0.10
|
Stage 2: Growing
|
$0.22
|
Stage 3: Milling
|
$0.28
|
Stage 4: Baking
|
$0.55
|
Stage 5: Retail price
|
$0.95
|
13. The addition to GDP from the production and sale of one loaf of bread is
14. The production and sale of one bread loaf adds
$0.95 to the nation's GDP. This value can be found either by noting its price when sold as a final good, or by summing the values added over its five stages.
15. The GDP has a variety of features including the exclusion of second-hand goods, transfer payments, and financial transactions. Additionally, the GDP is restricted to "final" goods and services to avoid double counting.
16. Consider the following hypothetical data for the U.S. economy in 2016 (all amounts are in trillions of dollars):
17. The largest component of GDP by far is
18. If a household purchases a new car and a new refrigerator, this would be classified as spending on
19. Durable goods are arbitrarily defined as items that last more than three years; they include automobiles, furniture, and household appliances.
20. The biggest component of GDP using the expenditure approach is ____________ and the biggest component of GDP using the income approach is _____________.
21. The income households actually receive before they pay personal income taxes is:
22. Suppose social security contributions rise by $1 billion while social security benefits also rise by $1 billion. Further, personal income taxes fall by $500 million. As a result,
23. An increase in corporate income taxes would reduce
24.
Higher corporate income taxes will reduce the amount of personal income. This is because a larger portion of earned income is no longer being received.
An increase in social security benefits will make
25.
Higher social security benefits will increase the amount of personal income. These increased payments to retirees clearly make received income higher. However, since the recipients concurrently produced no goods or services, earned income did not change.
26.
What is the difference between nominal GDP and real GDP?
27.
Real GDP is computed by adjusting nominal GDP for
28.
If real GDP increases in any year, we know that
29.
When comparing per capita GDP across countries, GDP should be adjusted for
30.
Per capita real GDP equals
31.
The country with the highest per capita GDP based on purchasing power parity (U.S. dollars) is
32.
The problem with using foreign exchange rates to convert one country's GDP into dollars is that
33.
The adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries is called
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