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ECO 372 Week 1 Apply: Output, Income, and Economic Growth Homework – One Attempt
Review the Week 1 Output, Income, and Economic Growth Quiz in preparation for this assignment.
Complete the Week 1 Output, Income, and Economic Growth Assignment in McGraw-Hill Connect®. These are randomized questions.
Note: You have only one attempt available to complete assignments. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date.
Which of the following scenarios would be included in GDP?
Darius unclogs the drain in his sink using the plunger he owns.
Sandra is a waitress at Morton’s Steakhouse. She receives a cash tip of $50 that she pockets and does not report.
Pam buys a new 40-inch television at Walmart.
Miguel won $100 in his office fantasy football league.
Which of the following expenditures is an example of a consumer durable good?
Marcus buys some new soccer cleats at the sporting goods store.
Arti buys a new refrigerator from Sears.
Latisha gets a manicure from the nail salon in the mall.
Colin buys a large coffee and a donut from Dunkin’ Donuts.
The equation for net investment is written as:
Net Investment = Nominal GDP – Gross Investment
Net Investment = Gross Investment – Depreciation
Net Investment = Consumption – Gross Investment
Net Investment = Depreciation – Gross Investment
Which of the following ly describes GDP using the income approach?
GDP = Wages + Rents + Interest + Profits and Losses + National Income
GDP = Consumption + Gross Investment + Net Exports + Government Purchases
GDP = Wages + Rents + Interest + Profits and Losses
GDP = National Income + Indirect Business Taxes + Depreciation + Net Foreign Factor Income
The major difference between nominal GDP and real GDP is:
nominal GDP measures the value of output with constant output levels, while real GDP measures output using current-year output levels.
nominal GDP measures the value of output in constant prices, while real GDP measures output using current-year prices.
nominal GDP measures the value of output with current-year output levels, while real GDP measures output using constant output levels.
nominal GDP measures the value of output in current-year prices, while real GDP measures output using constant prices.
The U.S. produces and sells millions of different products. To aggregate them together into a single measure of domestic output, the quantity of each good produced is weighted by its _____.
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Multiple Choice
utility to consumers
market price
contribution to corporate profits
cost of production
A nation’s nominal gross domestic product (GDP) _____.
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Multiple Choice
is the dollar value of all final output produced within the borders of the nation during a specific period of time
is the dollar value of all final output produced by its citizens, regardless of where they are living
is always some amount less than C + I + G + NX
can be found by summing C + I + S + NX
Which of the following is not included in gross domestic private investment, as defined in national income accounts?
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Multiple Choice
Changes to business inventories
The value of all new capital goods bought by business firms
Domestic home construction undertaken by and for the private sector
Government construction of new highways and dams
GDP measured using current prices is called _____
deflated GDP
constant GDP
real GDP
nominal GDP
Which of the following is a primary use for national income accounts?
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Multiple Choice
To analyze the environmental cost of economic growth
To assess the economic efficiency of specific industries in the economy
To determine whether there is a fair and equitable distribution of income in the economy
To measure changes in the value of production and income in the economy
Final goods and services refer to _____.
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Multiple Choice
goods and services that are unsold and therefore added to inventories
goods and services purchased by ultimate users, rather than for resale or further processing
goods and services whose value has been adjusted for changes in the price level
the excess of U.S. exports over U.S. imports
Nominal GDP differs from real GDP because _____.
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Multiple Choice
nominal GDP is based on constant prices
nominal GDP results from adjusting for changes in the price level
real GDP results from adjusting for changes in the price level
real GDP is based on current prices
Which of the following is not an example of an intermediate good?
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Multiple Choice
an oven bought by a homeowner
office supplies bought by an accounting firm
gasoline bought by a trucking company
flour bought by a bakery
In the treatment of U.S. exports and imports, national income accountants _____.
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Multiple Choice
subtract exports but add imports in calculating GDP
subtract both exports and imports in calculating GDP
add both exports and imports in calculating GDP
add exports but subtract imports in calculating GDP
The value of corporate stocks and bonds traded in a given year is _____.
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Multiple Choice
included in the calculation of net private domestic investment
excluded from the calculation of GDP because it does not represent new production
included in the calculation of GDP because it is a component of gross investment
included in the calculation of gross private domestic investment
Suppose that real GDP per capita in the United States is $49,000. If the long-term growth rate of real GDP per capita is 1.6% per year, how many years will it take for real GDP per capita to reach $98,000?
Instructions: Enter your answer as a whole number.
years
The table below shows real GDP per capita for the United States between the years 1950–2016.
Real GDP per Capita over Time
| Year | Real GDP per Capita (dollars) |
| 1950 | $13,819 |
| 1975 | 24,601 |
| 2000 | 43,935 |
| 2016 | 52,172 |
Instructions: Round your answers to one decimal place.
- What is the growth rate in the standard of living from 1950 to 1975?
- What is the growth rate in the standard of living from 1975 to 2000?
- What is the growth rate in the standard of living from 2000 to 2016?
Suppose that Italy can produce either goods or services with its resources, and that its PPF curve is shown on the graph as PPF1.
Using the graph, for each of the following situations, determine whether the PPF curve shifts.
- Suppose that Italy increases its spending on education, which increases the amount of human capital in Italy.
Italy’s PPF curve would
- A recession causes Italy’s unemployment rate to increase above the natural rate of unemployment.
Italy’s PPF curve would
- Italy experiences an influx of immigrants from surrounding countries, which causes the population of Italy to increase.
Italy’s PPF curve would
Which of the following is a measure of economic growth that is most useful for comparing changes in standards of living?
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Multiple Choice
increases in real GDP
increases in real GDP per capita
growth in nominal GDP
decreases in the rate of unemployment
The benefits of economic growth are _____, while the costs of economic growth are _____.
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Multiple Choice
increased output per person; the consumption sacrificed in exchange for capital formation
increased output per person; less future consumption
increased output per person; too small for concern
more current consumption; less future consumption
Use the following production possibilities frontiers to answer the next question.
Curve (a) is the current frontier for the economy. Focusing on curve (a), point N suggests that the economy currently produces
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Multiple Choice
more goods for the future than at point P.
less goods for the present than at point P.
less goods for the future than at point P.
a combination of output that is less than its potential.
The application of new technologies to the production process will increase
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Multiple Choice
labor productivity.
the share of the population employed.
the unemployment rate.
the quantity of human capital.
Real GDP per capita is found by
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Multiple Choice
dividing real GDP by population.
subtracting population from real GDP.
dividing population by real GDP.
adding real GDP and population.
Human capital is
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Multiple Choice
the financial resources available to humans for investment.
the talents, training, and education of workers.
the factories and machinery used by humans in the production process.
the factories and machinery made by workers.
To increase future living standards by pursuing higher current rates of investment spending, an economy must
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Multiple Choice
reduce the current capital stock.
allow higher rates of current consumption.
reduce current rates of consumption spending.
decrease the amount of future research and development spending.
Which of the following is a measure of economic growth that is most useful for measuring changes in the overall size of an economy?
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Multiple Choice
decreases in the rate of unemployment
increases in real GDP
increases in real GDP per capita
growth in nominal GDP
Human capital refers to the
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Multiple Choice
amount of financing available to start-up firms.
tools and equipment available to workers.
education, training, and skills of workers.
number of workers available in the economy.
Economic growth can best be portrayed as a(n)
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Multiple Choic
outward shift of the production possibilities frontier.
movement from a point inside to a point outside of the production possibilities frontier.
inward shift of the production possibilities frontier.
movement from a point near the vertical axis to a point near the horizontal axis on the production possibilities frontier.
The cost of a higher living standard in the future is giving up
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Multiple Choice
current consumption.
current investment.
future consumption.
future investment.
The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the
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Multiple Choice
the less an additional unit of capital adds to production.
less is produced.
the more an additional unit of capital adds to production.
less production is wasted.