Quiz: Mcconnell And Brue Economics- 15th Edition.

National income accounting allows us to assess the performance of the economy and make policies to improve that performance

Gross domestic product measures at their market value the total output of all goods and services produced in the economy in a given year.

GDP is simply a count of the quantity of output and is not a monetary measure.

The total market value of the wine produced in the US during a year is equal to the number of bottles of wine produced in that year multiplied by the average price at which the bottles sold that year.

GDP includes the sale of intermediate goods and excludes the sale of final goods.

The total value added to a product and the value of the final product are equal.

Social security payments and other public transfer payments are counted as part of GDP.

The sale of stocks and bonds is excluded from GDP.

In computing GDP, private transfer payments are excluded because they do not represent payments for currently produced goods and services.

The two approaches to the measurement of GDP yield identical results because one approach measures the total amount spent on the products produced by business firms during a year while the second approach measures the total income of business firms during the year.