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# Suppose GDP is \$16 trillion, with \$10 trillion coming from consumption, \$2 trillion comin

Suppose GDP is \$16 trillion, with \$10 trillion coming from consumption, \$2 trillion coming from gross investment, \$3.5 trillion coming from government expenditures, and \$500 billion coming from net exports. Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals \$1 trillion. From these figures, we see that net domestic product equals:

a. \$17.0 trillion.

b. \$16.0 trillion.

c. \$15.5 trillion.

d. None of the above.

7. Suppose GDP is \$15 trillion, with \$8 trillion coming from consumption, \$2.5 trillion coming from gross investment, \$3.5 trillion coming from government expenditures, and \$1 trillion coming from net exports. Also suppose that across the whole economy, personal income is \$12 trillion. If the government collects \$1.5 trillion in personal taxes, then disposable income will be:

a. \$13.5 trillion.

b. \$12.0 trillion.

c. \$10.5 trillion.

d. None of the above.

8. Suppose that this year’s nominal GDP is \$16 trillion. To account for the effects of inflation, we construct a price-level index in which an index value of 100 represents the price level five years ago. Using that index, we find that this year’s real GDP is \$15 trillion. Given those numbers, we can conclude that the current value of the index is:

a. Higher than 100.

b. Lower than 100.

c. Still 100.

Dec 05 2019 View more View Less Get Solution