Chapter 11 Measuring a Nation’s Production and Income

| November 9, 2018

56)
Wages paid to teachers, police personnel, and postal workers are not transfer
payments because they are payments for services and not simply “transfers”
of money.

57)
A trade surplus occurs when a country’s exports exceed that country’s imports.

58)
Net exports are total imports minus total exports.

59)
We ADD to the GDP when goods produced abroad are sold in the United States.

60)
Define GDP.

61)
Explain why only final goods are included in GDP.

62)
List and describe the four components of GDP.

63)
Define transfer payments and explain why they are not included in the
government purchases section of the GDP accounts.

11.3 The Income Approach: Measuring a Nation’s
Macroeconomic Activity Using National Income

1)
Income that flows to the private sector for services and production, is called
A)
net income.
B)
national income.
C)
deficit income.
D)
derived income.

2)
When gross domestic product (GDP) is adjusted by adding any income earned
abroad by U.S. firms or residents which is sent back to the United States and
by subtracting any income earned in the United States by non-U.S. corporations
or foreign nationals which is sent back to their home countries, it is called
A)
depreciation.
B)
subsidized income.
C)
international GDP.
D)
gross national product (GNP).

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