5. Suppose that California imposes a sales tax of 10 percent on all goods and services. A Californian named Ralph then goes into a home improvement store in the state capital of Sacramento and buys a leaf blower that is priced at $200. With the 10 percent sales tax, his total comes to $220. How much of the $220 paid by Ralph will be counted in the national income and product accounts as private income (employee compensation, rents, interest, proprietor's income, and corporate profits)? LO7.3 a. $220. c. $180. b. $200. d. None of the above.
6. Suppose GDP is $16 trillion with $10 trillion coming from consumption, $2 trillion coming from gross investment, $3.5 trillion coming from government expenditures, and $500 billion coming from net exports. Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals $1 trillion. From these figures, we see that net domestic product equals: LO7.4 a. $17.0 trillion. c. $15.5 trillion. b. $16.0 trillion. d. None of the above.
Suppose GDP is $15 trillion, with $8 trillion coming from consumption, $2.5 trillion coming from gross investment, $3.5 trillion coming from government expenditures, and $1 trillion coming from net exports. Also suppose that across the whole economy, personal income is $12 trillion. If the government collects $1.5 trillion in personal taxes, then disposable income will be: LO7.4 a. $13.5 trillion. c. $10.5 trillion. b. $12.0 trillion. d. None of the above.
The current value of the index is: LO7.5 a. Higher than 100. b. Lower than 100. c. Still 100.
9. Which of the following items will be included in official U.S GDP statistics? LO7.6 Select one or more answers from the choices shown a. Revenue generated by illegal marijuana growers in Oregon. b. Money spent to clean up a local toxic waste site in Ohio. c. Revenue generated by legal medical marijuana sales in California. d. The dollar value of the annoyance felt by local citizens living near a noisy airport in Georgia. e. Robert paying Ted for a haircut in Chicago. f. Emily and Rhonda trading an hour of dance lessons for a haircut in Dallas.
Lion production is $1.5 trillion and distribution is $1.0 trillion. LO7.6 a. How big is GDP? b. How big is GDP minus GDP?