Chapter 11 Measuring a Nation’s Production and Income

| November 9, 2018

15)
Recall the application. What was the approximate value of Wal-Mart’s value
added in 2008?
A)
$88 billion
B)
$ 286 billion
C)
$ 374 billion
D)
$ 661 billion

16)
In the expanded circular flow diagram, the government supplies
A)
goods and services to the product market.
B)
factors of production to the factor market.
C)
goods and services to households.
D)
factors of production to firms.

17)
In the expanded circular flow diagram, the rest of the world interacts directly
with
A)
households.
B)
firms.
C)
product markets.
D)
factor markets.

18)
National income is the income that individuals and firms earn from their
production.

19)
Personal disposable income is pre-tax income that flows directly to households.

20)
Compensation of employees is the largest component of national income.

21)
Explain the difference between U.S. GDP and U.S. GNP.

11.4 A Closer Examination of Nominal and Real GDP

1)
If real GDP was 100 in 2011 and 104.4 in 2012, the growth rate of real GDP
between 2011 and 2012 was
A)
2.2%.
B)
4.4%.
C)
100%.
D)
102.2%.

2)
If the economy grew at 7% from 2011 to 2012 and real GDP was 400 in 2011, what
was real GDP in 2012?
A)
393
B)
400
C)
407
D)
428

3)
Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242.
Assume that inflation is 10% per year. How fast did the economy grow between
these two years?
A)
10%
B)
12%
C)
21%
D)
42%

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