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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 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.

 

 
Abhinav 05-Dec-2019

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