Chapter 11 Measuring a Nation’s Production and Income

| November 9, 2018

7)
Recall the application. Large increases in per capita income in the United
States over the past 30 years have
A)
had the greatest impact on retired people.
B)
not increased happiness levels.
C)
led to a higher divorce rate.
D)
lowered stress levels.

8)
GDP ignores all of the following EXCEPT
A)
household production.
B)
the value of leisure time.
C)
products produced in other countries that are sold in the United States.
D)
changes in the environment that occur in the production of output.

9)
GDP calculations tend to exclude all of the following EXCEPT
A)
illegal transactions.
B)
environmental quality.
C)
work that people do for themselves in their own homes.
D)
salaries paid to government employees.

10)
Not including transactions from the underground economy will tend to ________
GDP, and not including environmental changes caused by pollution will tend to
________ GDP.
A)
overvalue; undervalue
B)
undervalue; overvalue
C)
overvalue; overvalue
D)
undervalue; undervalue

11)
GDP ignores transactions that take place in the underground economy.

12)
If GDP included the value of leisure time, the value of U.S. GDP would most
likely increase.

13)
GDP measures underestimate the value of output produced by an economy because
they include services not transferred through markets.

14)
Why is GDP only an imperfect valid measure of the value of output produced by
an economy?

15)
Give some examples of transactions in markets which are not regulated or
controlled.

16)
List four things considered to be shortcomings in the determination of GDP in
relation to the use of GDP as a measure of welfare.

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