1. Which would be considered an investment in the context of national income accounting according to economists

A. the purchase of newly issued shares of stock in Microsoft

B. the construction of a new computer chip factory by Intel

C. the resale of stock originally issued by the General Motors Corporation

D. the sale of retail department store building by Sears to Walmart

2. The best measure of the income households actually have available to spend is

A. disposable personal income

B. national income

C. net national product

D. Gross Domestic Product

3. Disposable Personal Income is equal to

A. Personal Income minus personal income tax payments

B. Personal Income minus government transfer payments

C. Personal Income minus social security payments

D. the income households have to consume, save, and pay taxes

4. To arrive at personal income from national income, the BEA must

A. add corporate retained earnings

B. add profits

C. add government transfer payments

D. All of the above

E. none of the above

6. Real GDP is

A. the value of goods and services evaluated at current year prices

B. the value of goods and services evaluated at base year prices

C. equal to the value of nominal GDP in every year except for the base year

D. a measure of output that was replaced by nominal GDP some time age

7. Household production and the underground economy

A. are fully accounted for in GDP figures

B. are not considered formal production of goods and services and, therefore, not included in GDP

C. are important but unaccounted for in the estimate of GDP

D. are irrelevant because they constitute only a very small fraction of GDP for most countries

8. If Americans still worked 60 hours per week as they did in 1890

A. both GDP and the well-being of the typical person would be much higher than they are.

B. both GDP and the well-being of the typical person would be lower than they are.

C. GDP would be lower than what it is, but the well-being of the typical person would likely be higher

D. GDP would be much higher than what it is, but the well-being of the typical person would not necessarily be higher

9. In the equation that sums up the information on the components of GDP, Y C + I + G + NX, which component has the largest dollar value?

A. C

B. I

C. G

D. NX