S.7 Economics National Income Accounting

Transcription

1 S.7 Economics National Income Accounting S.7 Economics/National Income Accounting/p Which of the following statements is/are correct? (1) GNP is always larger the net national product. (2) GNP is always larger than gross domestic product (GDP) (3) GNP at current market prices is always larger than GNP at constant market prices. A (1) only B (1) and (2) only C (2) and (3) only D (1), (2) and (3) 95 2 GDP components $ billion Private consumption expenditure 20 Gross domestic fixed capital formation 8 Government consumption expenditure 10 Capital consumption allowances 2 Indirect taxes 3 Subsidies 4 Net export of goods and services -3 Net income from abroad 6 Refer to the above table. A 36 B 41 C 42 D 44 The GNP at factor cost (in billion$) is 96 5 Which of the following transactions is regarded as investment in the national income accounts? A The Hong Kong Cultural buys a painting of the law century for $5 million. B You buy shares of Hong Kong Telecom stock. C Your father buys a newly constructed flat for $7 million. D All of the above Suppose gross national product increases but gross domestic product falls. Then the net income from abroad A is negative B is positive C increase

2 D decrease S.7 Economics/National Income Accounting/p Real gross domestic product is NOT a good measure of the welfare of a country because it does not take into account (1) The population size. (2) Non-market transactions (3) The change in the price level. A (1) and (2) only. B (1) and (3) only. C (2) and (3) only. D (1), (2) and (3) Study the following information of an economy: $ million Consumption expenditure Indirect tax Gross domestic fixed capital formation depreciation 300 Gross national product Subsidies 200 What is the net product at factor costs? A $ 3 300m B $4 300m C $5 000m D $7 100m Suppose over a period of one year, nominal GDP, population and the price level increase by 5%, 2% and 6% respectively. Which of the following is correct? A The per capital nominal GDP increases but the per capita real GDP decreases. B The per capita nominal GDP decreases but the per capita real GDP increases. C Both the per capita nominal GDP and the per capita real GDP increase. D Both the capita nominal GDP and the per capita real GDP decrease.

3 S.7 Economics/National Income Accounting/p Gross Domestic Product (GDP) Components $billion Private consumption expenditure 50 Government consumption expenditure 30 Net domestic fixed capital formation 20 Increase in inventory 5 Depreciation 10 Indirect taxes 4 Subsidies 3 Net exports 15 Net profit 12 Profits tax 6 Refer to the above table. The GDP at factor cost (in billion$) is A 119 B 123 C 129 D Gross National Product (GNP) Components $billion Private consumption expenditure 160 Government consumption expenditure 60 Gross domestic fixed capital formation 20 Increase in inventory 5 Depreciation 4 Indirect taxes 8 Subsidies 2 Net exports of good and services 40 Net income from abroad -10 The net national product at factor cost (in $billion) is A 265 B 275 C 277 D 285

4 S.7 Economics/National Income Accounting/p GNP Components $billion Private consumption expenditure 30 Gross domestic fixed capital formation 10 Government consumption expenditure 12 Capital consumption allowances 4 Indirect taxes 2 Subsidies 3 Net exports of goods and services -6 Net income from aboard -4 Refer to the above table. The GNP at factor cost (in billion$) is A 42 B 43 C 46 D Suppose the GNP at current market prices and the GNP at constant market prices of an economy increase by the same percentage. This means A real output increases but price level remains unchanged. B both price level and real output increase by the same percentage. C price level rises at a greater percentage than real output. D price level rises but real output remains unchanged Consider the following information on an economy Nominal GNP Growth Rate -3% Real GNP Growth Rate -4% Per Capita Nominal GNP Growth Rate -5% The above table shows that there is a in price level and a/an in population. A rise increase B rise decrease C fall increase D fall decrease

5 S.7 Economics/National Income Accounting/p GNP Components $billion Private consumption expenditure 100 Government consumption expenditure Gross domestic fixed capital formation 40 Increase in inventory 10 Depreciation 20 Net exports 5 Indirect taxes 30 Subsidies 15 Net income from aboard 8 X If net national product at factor cost is $140 billion, the value of X is A 10 B 12 C 20 D If the growth rate of per-capita real Gross Domestic Product (GDP) is greater than that of the real GDP as well as that of the per-capital nominal GDP, we can conclude that A Both the population and the general price level have fallen. B The growth rate of population is higher than that of real output and the standard of living has fallen. C The growth rate of population is lower than that of real output and the standard of living has fallen. D The inflation rate is greater than the growth rate of real output Which of the following statements about GDP is/are correct? (1) Real GDP is always equal to nominal GDP in the base year. (2) Everyone is worse off when the growth rate of real GDP is negative. (3) When the growth rate of nominal GDP is greater than the inflation rate, real GDP decreases. A (1) only B (1) and (2) only C (2) and (3) only D (1), (2) and (3) The word gross in gross national product indicates that no deduction has been made for A Exports and imports B Capital consumption allowance C Profits tax D A change in inventories.

6 S.7 Economics/National Income Accounting/p Gross Domestic Product (GDP) Components $ billion Private consumption expenditure Government consumption expenditure Gross domestic fixed capital formation Change in inventory Total exports Total imports Which of the following statements about the above table is correct? A The balance of payment is not balanced because the total export value is different from the total import value. B The value of total market transactions in the economy is $330 billion. C There is insufficient data in the table to reflect the living standard of the people in the economy. D If $50 billion of sales tax is imposed in the economy, the value of GDP at factor costs will be $280 billion In an economy the growth rate of nominal GDP is positive and falling while the population growth rate and the inflation rate are both negative. It means that A Both per capita nominal GDP and real GDP are rising. B The growth rate of real GDP must be rising. C The per capita real GDP must be falling. D The fall in nominal GDP growth rate will lead to fall in aggregate demand Consider the following information in an economy. Growth rate (relative to previous year)(%) Year 1 Year 2 Nominal GDP -3 0 General price level -4-2 Population 2-1 Which of the following about the economy is FALSE? A The nominal GDP in the above two years is the same. B The real output increased in year 2. C The general price level is decreasing at a decreasing rate. D The per capita real GDP decreased in year 2.

7 06 3 S.7 Economics/National Income Accounting/p.7 Consider the following information in an economy. Growth rate (relative to previous year)(%) Year 1 Year 2 Nominal gross domestic -3 0 product(nominal GDP) General price level -4-2 Population 2-1 Which of the following about the economy is FALSE? A The nominal GDP in the above two years is the same. B The real output increased in year 2. C The general price level is decreasing at a decreasing rate. D The per capita real GDP decreased in year B4 GDP =C+I+G+X-M (a) Although GDP is supposed to be measured at market value, there is one component which is not. What is that component? Name one item within that component. (4) (b) Why is M deducted? (4) 92 B1 As measures of welfare, GNP tends to overstate that of the newly industrialized countries and understate that of the less developed countries. Explain. (12) 93 B1 The GDP figures (in HK$m) for the last three years are as follows: At current market prices At constant 1980 prices (a) What are the GDP implicit price deflators for all three years? (1980=100). Show your working. (8) (b) What are the inflation rates as measured by the GDP deflators for 1990 and 1991? Show your working. (8) 99 C5 (a) Define gross domestic product (GDP) and gross national product (GNP) and explain their difference in an open economy. Must the economy be closed for GDP to equal GNP? (5 marks) (b) Suppose the working population in an open economy consists of both domestic and short-term (say, with less than one year of residence) imported workers. While the latter contributes to the output of the economy, they regularly remit part of their income earned in the economy back to their home countries.

8 (i) (ii) S.7 Economics/National Income Accounting/p.8 If these imported workers do NOT create unemployment for domestic workers, how will the presence of these imported workers affect the GDP and GNP of this labour-importing country? If these imported workers cerate unemployment for some domestic workers, how will the presence of these imported workers affect the GDP of this labour-importing country? In particular, how does your answer depend on whether the productivity of these imported workers is higher than that of those domestic workers they replace? (total 8 marks) 04 B1 Name one similarity and one difference between each pair of the following terms. ( 3 marks each) (a) National income; national product 06 B1 State whether each of the following statement is true, false or uncertain. Briefly explain your answer. (5 marks each) (a) In the absence of taxes (when the producers receive/pay exactly what the household pay/receive), there is no difference between national product and national income. (b) (a) By using a fixed list of consumer goods and services in a particular (called base ) year as the benchmark, the Consumer Price Index (CPI) would overstate the actual increase in the cost of living during periods of inflation.