24.1 In what ways are national-income statistics useful?
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24.2 Why
do national income accountants compare the market value of the total
outputs in various years rather than actual physical volumes of
production? What problem is posed by any comparison over time of the
market values of various total outputs? How is this problem resolved?
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24.3 Which
of the following goods are usually intermediate goods and which are
usually final goods: running shoes; cotton fibers; watches;
textbooks; coal; sunscreen lotion; lumber?
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24.4 Why
do economists include only final goods and services in measuring GDP
for a particular year? Why don’t they include the value of the stocks
and bonds bought and sold? Why don’t they include the value of the used
furniture bought and sold?
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24.5 Explain why an economy’s output, in essence, is also its income.
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24.6 Provide three examples of each: consumer durable; goods, consumer nondurable goods, and services.
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24.7 Why
are changes in inventories included as part of investment spending?
Suppose inventories declined by $1 billion during 2010. How would this
affect the size of gross private domestic investment and gross domestic
product in 2010? Explain.
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24.8 What
is the difference between gross private domestic investment and net
private domestic investment? If you were to determine net domestic
product (NDP) through the expenditures approach, which of these two
measures of investment spending would be appropriate? Explain.
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24.9 Use
the concepts of gross investment and net investment to distinguish
between an economy that has a rising stock of capital and one that has a
falling stock of capital. Explain: “Though net investment can be
positive, negative, or zero, it is impossible for gross investment to be
less than zero.
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24.10 Define
net exports. Explain how U.S. exports and imports each affect domestic
production. How are net exports determined? Explain how net exports
might be a negative amount.
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24.11 Contrast
the ideas of nominal GDP and real GDP. Why is one more reliable than
the other for comparing changes in the standard of living over a series
of years? What is the GDP price index and what is its role in
differentiating nominal GDP and real GDP?
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24.12 Which of the following are included or excluded in this year's GDP? Explain your answer in each case.a. Interest received on an AT&T corporate bond.b. Social Security payments received by a retired factory worker.c. Unpaid services of a family member in painting the family home.d. Income of a dentist from the dental services provided.e. A monthly allowance a college student receives from home.f. Money received by Josh when he resells his nearly brand-new Honda automobile to Kim.g. The publication and sale of a new college textbook.h. An increase in leisure resulting from a 2-hour decrease in the length of the workweek, with no reduction in pay.i. A $2 billion increase in business inventories.j. The purchase of 100 shares of Google common stock.
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24.13 LAST WORD
What government agency compiles the U.S. NIPA tables? In what U.S.
department is it located? Of the several specific sources of
information, name one source for each of the four components of GDP:
consumption, investment, government purchases, and net exports.
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