(Consider This) When making a capital stock and reservoir analogy, the: inflow from the river is gross investment. Economy A: gross investment equals depreciation
What is the stock of capital in the reservoir?
level of water in the reservoir is the stock of capital. Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows.
How do you calculate the consumption of fixed capital?
Consumption of fixed capital (depreciation) can be determined by: subtracting NDP from GDP. (Consider This) When making a capital stock and reservoir analogy, the: inflow from the river is gross investment. Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment
What is the difference between flow and gross investment and depreciation?
flow, whereas gross investment and depreciation are stocks. flow, as are gross investment and depreciation. stock, as are gross investment and depreciation. stock, whereas gross investment and depreciation are flows.
What are the two ways to adjust nominal GDP to reflect price change?
We account for this using real GDP, which is a measure of GDP that has been adjusted for the price level. In this way, real GDP is a truer measure of output in an economy. There are two approaches to adjusting nominal GDP to get real GDP: 1) using the same prices every year or 2) using the GDP deflator.
Which of the following is a source of data for the consumption component of the US GDP?
The growth of GDP may understate changes in the economy's economic well-being over time if the: quality of products and services improves. (Last Word) Which of the following is a source of data for the consumption component of the U.S. GDP? The Census Bureau's Retail Trade Survey.
What are the three methods to measure GDP?
GDP can be measured in three different ways: the value added approach, the income approach (how much is earned as income on resources used to make stuff), and the expenditures approach (how much is spent on stuff).
Which of the following best defines national income quizlet?
Which of the following best defines national income? Incomes earned by U.S. resource suppliers plus taxes on production and imports.
Which of the following would be considered investment in the calculation of GDP?
In calculating GDP, investment does not refer to the purchase of stocks and bonds or the trading of financial assets. It refers to the purchase of new capital goods, that is, business equipment, new commercial real estate (such as buildings, factories, and stores), residential housing construction, and inventories.
Which of the following is considered to be a problem in using GDP as a measure of national well being?
Which of the following is considered to be a problem in using GDP as a measure of national well-being? GDP is not adjusted to account for depletion of natural resources.
Which method is used to measure the economic?
The most common method is the GDP. GDP refers to the monetary value of all goods and services produced within the boundaries of a country over a period of time.
What are the various sectors to which firms make sales What are the various ways in which households are linked with other sectors of the economy?
Firms make sales to other firms, households, the government, and the rest of the world. Households are linked to firms through the sale of factors of production to firms, through purchases from firms of final goods and services, and through lending fund to firms in the financial markets.
What GDP means?
gross domestic productOne of the most common is GDP, which stands for gross domestic product. It is often cited in newspapers, on the television news, and in reports by governments, central banks, and the business community. It has become widely used as a reference point for the health of national and global economies.
Which of the following do national income accountants consider investment quizlet?
National income accountants define investment to include: any increase in business inventories. Real GDP is: the nominal value of all goods and services produced in the domestic economy corrected for inflation or deflation.
How does capital stock affect aggregate demand?
An increase in the capital stock causes an increase (rightward shift) of both aggregate supply curves. A decrease in the capital stock causes a decrease (leftward shift) of both aggregate supply curves. Other notable aggregate supply determinants include the technology, energy prices, and the wages.
Which of the following government agencies compiles the national income and product accounts?
The agency responsible for compiling the National Income Product Accounts for the U.S. economy is the: Council of Economic Advisers.
What was the total monetary value of all final goods and services produced in a particular country in 2010?
Suppose the total monetary value of all final goods and services produced in a particular country in 2010 is $500 billion and the total monetary value of final goods and services sold is $450 billion.
Why is there a difference between nominal and real GDP?
In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because: the price level may change over time. In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because: the price level may change over time.
Does GDP understate output?
GDP will tend to increasingly understate the level of output through time. The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by: national income.