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In the calculation of GDP by the expenditure approach, exports from the United States must be



1) In the calculation of GDP by the expenditure approach, exports from the United States must be
A) subtracted because they are included in the consumption of a foreign country.
B) ignored because they are not bought by U.S. citizens.
C) subtracted if they are bought by foreign firms for investment purposes.
D) added.
2) Last year in the country of Nerf imports equaled exports. Nerfʹs GDP was $500 million, its
consumer expenditure was $380 million, and its investment was $20 million. Nerfʹs government
expenditure on goods and services were ________.
A) $100 million
B) $900 million
C) $500 million
D) zero
3) If imports are $100 million less than exports, government expenditures are $500 million,
consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP
is
A) $1 billion.
B) $1.9 billion.
C) $2 billion.
D) $2.1 billion.
4) If consumption expenditures are $500 million, net investment is $100 million, depreciation
equals $5 million, imports are $50 million, exports are $55 million, government expenditure on
goods and services is $220 million, and government transfer payments are $20 million, then
GDP is
A) $790 million.
B) $800 million.
C) $830 million.
D) $850 million.
5) The approach to GDP that sums compensation of employees, rental income, corporate profits,
net interest, proprietorsʹ income, depreciation, and indirect taxes and subtracts subsidies is the
A) opportunity cost approach.
B) expenditure approach.
C) added cost approach.
D) income approach.
6) The income approach to measuring GDP sums together
A) compensation of employees, rental income, corporate profits, net interest, proprietorsʹ
income, subsidies paid by the government, indirect taxes paid, and depreciation.
B) compensation of employees, rental income, corporate profits, net interest, proprietorsʹ
income, indirect taxes paid, and depreciation and subtracts subsidies paid by the
government.
C) the sales of each firm in the economy.
D) the costs of each firm in the economy and then subtracts indirect business taxes and
depreciation.



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