1. What is not included in GDP for the United States but is included in GNP for the United States?

A. A foreign company's production in the United States

B. Income of a citizen of Germany working in the United States

C. Economic activity of U.S. citizens working in Japan

D. Sales of goods by one U.S. firm to another U.S. firm here in the United States

2. National Income is comprised of:

A. employee compensation, interest, and rent only.

B. employee compensation, interest, rent, and profits.

C. employee compensation, interest, rent, profits and transfer payments.

D. employee compensation, interest, rent and profits minus business taxes.

3. If a firm sold $700 worth of goods which cost $1,000 to produce:

A. national income would no longer equal GDP.

B. the firm's loss needs to be subtracted from final sales so that income and output are still equal.

C. the firm's loss would not be added to national income.

D. national income would still equal GDP.

4. Are expenditures on capital and equipment are counted as part of GDP?

5. Given nominal GDP of $4.2 trillion and a GDP deflator which is 20% greater than the base year, we can conclude that real GDP is equal to:

A. $3.0 Trillion

B. $3.5 Trillion

C. $4.2 Trillion

D. $5.88 Trillion