Question Details

Which of the following will be added to GDP as conventionally calculated 


1. A reduction in inventory is 
a) not considered in the national income accounts 
b) entered as positive investment in the national accounts 
c) entered as negative investment in the national accounts 
d) entered as a depreciation item in the national accounts 
2. Which of the following is counted as investment in national income accounting? 
a) building a new factory b) buying an existing house 
c) purchasing corporate stocks and bonds d) depositing money in a commercial bank 
3. Goods and services are valued at market prices when calculating GDP. Because the "outputs" of government are not sold, they have no market prices. In the actual calculation of GDP 
a) they are valued at zero b) they are valued at the cost of producing them 
c) their value is estimated from a survey of recipients of these services 
d) their value is estimated from the market prices of similar market-provided services 6 
4. That GDP tends to overstate a nation's economic well-being is illustrated by its treatment of which of the following 
a) you buy a new generator for your barn 
b) you decide to stay home to care for your children 
c) you decide to work fewer hours to enjoy life more 
d) the government spends millions cleaning up after an oil spill 
5. Which of the following will be added to GDP as conventionally calculated ? 
a) the cost of cleaning up an oil spill b) an unemployment insurance payment 
c) dividends earned by an American on shares in a British company 
d) the value of work done by a parent staying home to care for children



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