The usefulness of national income statistics.
Explanation of Solution
National income statistics estimates the level of production in the economy at some particular time; taking the economy as a whole, it will explain such a situation. In the long run, it will be helpful to determine if the economy is growing, constant, or declining. It offers a foundation in order to design and to apply public policies to eventually helping the economy’s performance to improve. In case national income statistics are not present, then the economic policy will just be a prediction. It also lends a helping hand to define policies that will preserve and also improve the economy's health.
Concept Introduction:
National income statistics: It is used by a country to gather data and aggregate economic activity for a given time period.
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Chapter 27 Solutions
Economics (Irwin Economics)
- (Table) According to the table, when using the expenditure approach, GDP is Category Proprietors' income Capital consumption allowance Federal government purchases of goods and services Compensation of employees Personal consumption expenditures Billions $300 440 200 S00 950 90 60 Corporate profts Exports Gross private domestic investment Rental income State and local government purchases of goods and services Net interest Federal government deficit Imports 500 30 150 100 250 90 O $1,770 billion. O $2,020 billion. O $1,320 billion. O $1,330 billion. The government decides to give tax-exempt status to a new organization whose mission is to award college scholarships to members of the armed forces. In doing so, the government is acting in its role to promote economic growth by O ensuring a stable legal system. O enhancing physical and human capital. O ensuring a stable and secure financial system. promoting free and competitive markets.arrow_forwardSuppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburgers, shirts, and cotton. Further, assume that all of the cotton is used to produce shirts. Product Shoes Hamburgers Shirts Cotton 2009, then the nominal GDP for 2017 equals: O 18672.5 O 8250 O8750 2009 Statistics Quantity 100 85 60 11,000 O 10422.5 Price $52.00 3.00 35.00 0.85 2016 Statistics Quantity 115 120 55 10,000 Price $65.00 3.00 30.00 0.70 2017 Statistics Quantity 110 135 75 11,000 Price $70.00 3.50 30.00 0.75 If the base year is the yeararrow_forwardData for 2019 Item Price Quantity Market Value Tables $100 10 $1,000 Chairs $25 100 $2,500 Nominal GDP $3,500 Data for 2020 Item Price Quantity Market Value Tables $110 15 $1,650 $3,600 $5,250 Chairs $30 |120 Nominal GDP Using the data above, what is real GDP for 2020 assuming 2019 is the reference base year? $5,100 $5,250 O $4,500 O $3,500 Cannot determine from the information abovearrow_forward
- Assume that nominal GDP is $2,800 billion and the real GDP is $2,000 billion. What is this economy's broadest price index? O 280 120 O180 O None of the above.arrow_forward$620 Personal Consumption Expenditures Saving 50 200 Government Purchases 750 Net Domestic Product Statistical Discrepancy 180 Gross Investment 780 National Income 220 Exports Imports 240 760 Personal Income Refer to the accompanying data (all figures in billions of dollars). The net investment for this economy is O 1) $200. 2) $20. 3) $230. 4) -$20.arrow_forwardA country's GDP is being measured by the expenditure method. Various categories of expenditure are recorded as follows (in billions of dollars): households' spending on consumption firms spending on capital goods firms' additions to inventories govemment spending on services government spending on capital goods government transfers (e.g., Social Security) value of exports value of imports 100 15 O$143 billion O$135 billion O$123 billion $167 billion None of the other answers are correct. 1 10 2 20 7 12 [If the image above doesn't appear click here to open it in a new tab.] What is the correct estimate of GDP?arrow_forward
- What is the GDP for a country where consumption spending is $400 billion, gross investment is $125 billion, government spending is $135 billion, exports are $200 billion, and imports are $175 billion? O $685 billion O $415 billion O $635 billion O $1 035 billion 32arrow_forwardWhich of the following would NOT be included in this year's GDP? O 1. the production of a television show. O 2. the purchase of a new work truck. O 3. the hiring of a new police officer. O4. your purchase of your neighbor's 2001 Toyota.arrow_forwardIf in some year nominal GDP was $40 billion and the GDP deflator was 70, what was real GDP? O $30.0 billion O $110.0 billion O $57.1 billion O $175,0 billionarrow_forward
- Refer to the table. Equilibrium GDP is: Government Purchases Consumption (after taxes) $-20 Gross Investment Net Exports Real GDP $15 $10 10 $+5 $0 0. +5 15 10 20 10 +5 15 40 40 10 +5 15 70 60 10 +5 15 100 80 10 +5 15 130 100 10 +5 15 160 $40. O $70. O $100. O $130. $160 O O O O Oarrow_forwardProduction Prices Year1 Year 2 Year 3 Year 1 Year 2 Year Good X 50 50 60 $1.00 $1.20 $1.20 Good Y 100 120 140 $0.60 $0.60 $1.00 Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 2 is Select one: O a. 92.4 O b. 105 O . 84.5 O d. 108.2arrow_forwardGoods and services produced by Omani working in Oman is OMR 3.1 billion, produced by Omani working outside Oman = OMR 1.5 billion, and produced by the residents who are working in Oman OMR 2.9 billion. Calculate Gross Domestic Product of Oman? Select one: O a. 0.20 O b. None of these O C. 4.50 O d. 6.00 O e. 7.50arrow_forward
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc