Answer ALL questions. Write T for True and F for False
1. When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United Stat
2. The expenditure approach to measuring GDP includes firms' spending on wages.
3. Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP.
4. To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.
5. The omission of household production causes actual economic production to be underestimated.
6. All economic activity in the underground economy represents the production of illegal goods and services.
7. The underground economy means that GDP will overstate the actual level of economic welfare.
8. Factor cost is the base price that is earned by the producers or sellers.
9. Disposable Personal Income is the part of the personal income
that is left after the
payment of personal direct taxes.
10. Five hundred hours of babysitting by a Jamaican nanny for a family living in New York in 2009 (paid under the table) will be included in US’s GDP.