SOLVED

11) Which of the following goods is directly counted in GDP? A) the lettuce that Subway purchases for its sandwiches B) the bread that Subway purchases for its sandwiches C) a 12-inch Subway sandwich purchased by a student D) the plastic bags that Subway purchases to wrap its sandwiches 12) Which of the following transactions represents the purchase of a final good? A) Starbucks purchases coffee beans. B) Delta buys a new European-made jetliner. C) Apple computer buys computer processors from Intel. D) Your father buys a new John Deere riding lawn mower. 13) Which of the following is not directly counted in GDP? A) investment expenditures B) government purchases C) intermediate goods D) consumer goods 14) Value added equals the market price of the firm’s product minus A) wages and salaries. B) the price of intermediate goods. C) the price of all factors of production. D) depreciation on plant and equipment. 15) Which of the following would be directly counted in GDP in 2012? A) kitchen cabinets purchased from Home Depot in 2012 to be installed in a house built in 1997 B) kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home C) kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950 D) none of the above    16) Refer to Table 12-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals A) 3,090 units. B) $7,250. C) $8,750. D) $9,750.    17) Refer to Table 12-2. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals A) $7,400. B) $6,400. C) $5,800. D) 2,440 units. 18) In the circular flow model, the value of total income for an economy ________ the value of total production. A) equals B) is greater than C) is less than D) may be greater than or less than 19) In the circular flow model, the value of total production for an economy ________ the value of total expenditures on final goods and services. A) equals B) is greater than C) is less than D) may be greater than or less than 20) The nominal GDP of the U.S. in 2010 was approximately $14.6 trillion. This means that A) the value of output in 2010 was around $14.6 trillion. B) total income in 2010 was around $14.6 trillion. C) total spending in 2010 was around $14.6 trillion. D) all of the above are true.