Exhibit 11-10 GDP data (billions of dollars)
Indirect business taxes$ 600
Depreciation950
Change in business inventories50
Compensation of employees5,400
Corporate profits700
Durable goods600
Exports100
Social Security taxes360
Transfer payments300
Fixed investment950
Government spending800
Imports150
Net interest500
Nondurable goods2,000
Personal taxes1,000
Rental income200
Services4,000
In Exhibit 11-10, and using the expenditures approach, compute net exports (X-M). Which of the following is correct?
A. $500 billion.
B. $150 billion.
C. $100 billion.
D. -$50 billion.
Answer: D
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A nation's gross domestic product (GDP) ________.
A. is always some amount less than its net domestic product B. can be found by summing C + I + G + NX C. is the dollar value of the total output produced by its citizens, regardless of where they are living D. can be found by summing C + S + G + NX
An inflationary gap means that the level of real GDP at the short-run macroeconomic equilibrium
A) is less than full-employment GDP. B) equals full-employment GDP. C) is more than full-employment GDP. D) may be less than, more than, or the same as full-employment GDP depending on the level of potential GDP.
National income, plus income received but not earned, minus income earned but not received, is
a. personal income b. personal disposable income c. pre-tax profit d. net national product e. capital depreciation
Comparative advantage implies choosing the activity that
A. has the lowest opportunity cost. B. does not demand any specialization. C. is inside the production possibilities frontier. D. has a high opportunity cost.