1. The four categories of final users of GDP are

1. businesses, firms, governments, and the foreign sector.
2. households, the Federal Reserve, governments, and the foreign sector.
3. businesses, corporations, firms, and farms.
4. households, firms, governments, and the foreign sector.

2.Total spending on final goods and services in an economy must equal total

1. profits.
2. production value.
3. revenues from all transactions.
4. investment.

3.The total market value of production in an economy must equal total

1. profits.
2. revenues from all transactions.
3. consumption.
4. spending on final goods and services.

4. The four components of aggregate expenditures are

1. consumption, imports, government spending, and net exports.
2. consumption, interest payments, government spending, and net exports.
3. consumer durables, investment, government spending, and net exports.
4. consumption, investment, government spending, and net exports.

5. Consumption spending includes spending on

1. durables, nondurables, and services.
2. stocks, bonds, and other financial instruments.
3. capital goods, residential housing, and changes in inventories.
4. goods and services by federal, state, and local governments.

6.Investment spending includes spending on

1. consumer durable goods.
2. new capital goods.
3. services.
4. stocks and bonds.

7. Government purchases include all of the following except

1. Social Security benefits paid by the federal government.
2. the construction of a new courthouse built by a county government.
3. the salary paid to an elementary school teacher employed by a local public school district.
4. the purchase of new military hardware by the U.S. Army.

8.Net exports equal

1. the value added of exports.
2. exports plus imports.
3. exports minus imports.
4. exports minus depreciation.

9.Which of the expenditure components of GDP can be negative?

1. Consumption spending on durables
2. Government spending
3. Consumption spending on services
4. Net exports

10.Three equivalent ways to measure GDP are total _____, total _____, and total ______.

profits; production; saving

production; income; expenditure

investment; consumption; saving

expenditure; income; profits

11.Labor income includes

wages, salaries, and earnings of the self-employed.

payments to owners of factories, machines, and buildings.

interest, dividends, and rent.

profits, royalties, and rent.

12.Real GDP is measured in ______ prices; nominal GDP is measured in ______ prices.

current; base year

base year; current

current; current

base year; base year

13. Given the following data for the economy, compute the value of GDP.

Government purchases of goods and services	10
Consumption expenditures	70
Exports	5
Imports	12
Change in inventories	7
Construction of new homes and apartments	15
Sales of existing homes and apartments	22
Government payments to retirees	17
Business fixed investment	9

1. 56
2. 83
3. 90
4. 141

14.Assume an economy produces only hamburgers and hot dogs and the base year is 2019.

	Quantities Produced	Prices
2019	2020	2019	2020
Hamburgers	2,000	3,000	$ 2	$ 3.00
Hot dogs	3,000	4,000	$ 1	$ 1.50

Given the data in the table above, what is the value of real GDP in 2020?

$ 5,000

$ 7,000

$10,000

$10,500

15.Assume an economy produces only footballs and baseballs and the base year is 2019.

	Quantities Produced	Prices
2019	2020	2019	2020
Footballs	200	300	$ 20	$ 3.00
Baseballs	500	600	$ 10	$ 1.50

Given the data in the table above, what is the value of real GDP in 2020?

$9,000

$10,000

$12,000

$12,500

16.Kenan's Barber Shop cut 3,000 heads of hair in 2019 and 3,100 in 2020. The price of a haircut was $7 in 2019 and $8 in 2020. If 2019 is the base year, what was Kenan's contribution to real GDP in 2019?

$21,000

$21,700

$24,000

$24,800