Answer the following statements true (T) or false (F)
1. The GDP counts durable goods only during their year of production.
2. In national income accounting, machine depreciation is treated as a cost of production, but damage to a region’s air quality is not.
3. The GDP is reported on a monthly basis by the Department of Commerce.
4. An increase in the price level adds to the value of the nominal GDP but not to the real GDP.
5. An increase in business inventories would be included in the investment component of GDP.
6. GDP overstates national income because it does not make any adjustment for national debt.
7. Most national wealth in the United States is held in the private sector.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
6. FALSE
7. TRUE
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What role can the government play in correcting for externalities?
What will be an ideal response?
An equilibrium price is unaffected by nonprice factors
a. True b. False Indicate whether the statement is true or false
Are sellers always able to produce a surplus of the goods they sell?
A) No, because almost all goods are scarce. B) Only if they can increase supply faster than demand increases C) Only if they can prevent new uses for the good from being developed. D) Yes, if they insist upon receiving a sufficiently high price that is above the market clearing level.
An autonomous expenditure is one that does not depend on:
A) government policy B) the automobile sector C) interest rates D) GDP