Understanding Gross Domestic Product?

[shadrach]

I have had a little trouble understanding GDP and have just completed my homework. Since it is due tomorrow I hope someone can look over it and let me know where I am going wrong. Thanks.

1. Gross private investment can include: (c)
a. Government construction of new highways and dams
b. Purchases of shares of stock in corporate businesses
***c. Household consumption expenditures on durable goods
d. Business inventories


2. The largest expenditure component of Gross Domestic Product is (B)
a. Gross private investment expenditures
***b. Household consumption expenditures
c. Net export expenditures
d. Government expenditures

3. Which of the following is a strictly a final good? (C)
a. Fertilizer used by a farmer to grow crops
b. Hamburger meat purchased by a restaurant
***c. A hamburger sold at a restaurant
d. All of the above

4. Gross Domestic product (GDP) may be defined as the monetary value of (D)
a. All intermediate goods used in the production of final goods
b. All final and intermediate goods and services produced within a country in one year
c. All final goods and services produced by nationals throughout the world in one year
***d. All final goods and services produced within a country in one year

5. The largest income component of Gross Domestic Product is (B)
a. Rental income
**b. Wage income
c. Interest income
d. Proprietary income


6. The portion of tax receipts that the public sector allocates to social security is included in government expenditure (FALSE)
a. True
***b. False


7. Which of the following is included in GDP? (A) (but for some reason I think that D could be right, too)
***a. Used autos purchased by consumers
b. Social security payments
c. Telephone service for a home
d. Bread purchased by a restaurant to make sandwiches

8. In September 2005, a US automobile maker manufactured an automobile and it was delivered to a local dealership in October 2005. The auto was sold to Sharon Smith for personal use in March of 2006. This auto would be considered a: (A)
***a. Consumption expenditure in 2005 and also a consumption expenditure in 2006.
b. Consumption expenditure in 2005 and also an investment expenditure in 2006.
c. Disinvestment in 2005 and a consumption expenditure in 2006
d. Investment expenditure in 2005 and disinvestment in 2006

9. Net exports assume a positive number when (D)
a. The monetary value of imports exceeds the monetary value of exports
b. Depreciation is greater than gross private investment
c. Gross private investment is greater than depreciation
***d. The monetary value of exports exceed the monetary value of imports

[arrigo]

1 is D
7 is C (used items are not included in GDP because it was not produced in the current year)
8 is D

The others look good.

1 & 8 both deal with the Investment piece of GDP. Investment has 3 categories:
1) purchases of capital (that is physical capital that makes labor more productive)
2) new home construction
3) changes in inventories

#1 and #8 hit the inventories category.

1 is D
7 is C (used items are not included in GDP because it was not produced in the current year)
8 is D

The others look good.

1 & 8 both deal with the Investment piece of GDP. Investment has 3 categories:
1) purchases of capital (that is physical capital that makes labor more productive)
2) new home construction
3) changes in inventories

#1 and #8 hit the inventories category.

[elkan80]

1 is D
7 is C (used items are not included in GDP because it was not produced in the current year)
8 is D

The others look good.

1 & 8 both deal with the Investment piece of GDP. Investment has 3 categories:
1) purchases of capital (that is physical capital that makes labor more productive)
2) new home construction
3) changes in inventories

#1 and #8 hit the inventories category.