Question

T or F

31. FULL EMPLOYMENT = ZERO UNEMPLOYMENT.

32. OPEN SYSTEM, GLOBALIZATION, AND INTERNATIONAL MARKETING ARE DIFFERENT FROM

GLOBAL MANAGEMENT.

33. GDP MEASURES ALL PRODUCTS AND SERVICES MADE IN THE US, PUERTO RICO, GUAM,

BAHAMAS, THE US VIRGIN ISLANDS, AND PARTS OF SOUTHERN CANADA.

34. GDP = C + G + I + NX; THIS IS THE INCOME APPROACH AND THE EXPENDITURE APPROACH.

35. AN EXPENSIVE 2014 MERCEDES BENZ BOUGHT LAST YEAR IS COUNTED IN THE GDP.

Answer 1

31  False. Full employment does not imply zero unemployment. Even at full employment, there might be voluntary unemployment. Technological and frictional unemployment may exist even during full employment.

32 True

33 False. GDP measures the final value of all goods and services produced within a country. Each country has its own GDP value. Thus GDP is not a measure of all products and services made in the US, Puerto Rico, etc.GDP measures the value of all final goods and services produced within a country.

34 False. We do not use the same formula to measure GDP using the income and expenditure approach. The equation mentioned in the question is used to measure GDP using the expenditure approach. The starting point of the two approaches are a little different. The expenditure approach begins with the money spend on goods and services while the income approach begins with the income earned. The equation used to measure the GDP using the income approach is given below

TNI=Sales Taxes+Depreciation+NFFI

where:TNI=Total national incomeNFFI=Net foreign factor income​

35 False. A product will be counted in the GDP calculation only once in its lifetime.The 2014 Mercedez Benz would have been included in the GDP calculation of the year 2014, if it was produced during that year.