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AP Macroeconomics: Unit 2 Exam
Questions and Answers 100% Pass
national income accounting - ✔✔The techniques used to measure the overall production of the economy
and other related variables for the nation as a whole.
gross domestic product - ✔✔The total market value of all final goods and services produced annually
within the boundaries of the United States, whether by U.S. or foreign-supplied resources.
intermediate goods - ✔✔products that are purchased for resale or further processing or manufacturing.
final goods - ✔✔goods that have been purchased for final use and not for resale or further processing or
manufacturing.
multiple counting - ✔✔wrongly including the value of intermediate goods in the gross domestic product;
counting the same good or service more than once.
value added - ✔✔The value of the product sold by a firm less the value of the produces (materials)
purchased and used by the firm to produce the product.
expenditures approach - ✔✔the method that adds all expenditures made for final goods and services to
measure the gross domestic product.
income approach - ✔✔the method that adds all the income generated by the production of final goods
and services to measure the gross domestic product.
personal consumption expenditures (C) - ✔✔the expenditures of households for durable and nondurable
consumer goods and services.
Emily Charlene, ©2025 All Rights Reserved.
, 2|Page
gross private domestic investment (Ig) - ✔✔Expenditures for newly produced capital goods (such as
machinery, equipment, tools, and buildings) and for additions to inventories.
net private domestic investment - ✔✔gross private domestic investment less consumption of fixed
capital; the addition to the nation's stock of capital during a year.
government purchases (G) - ✔✔expenditures by government for goods and services that government
consumes in providing public goods and for public (or social) capital that has a long lifetime; the
expenditures of all governments in the economy for those final goods and services.
net exports (Xn) - ✔✔Exports minus imports
national income - ✔✔total income earned by resource suppliers for their contributions to gross domestic
product; equal to the gross domestic product minus nonincome charges, minus net foreign factor income.
indirect business taxes - ✔✔such taxes as sales, excise, and business property taxes, license fees, and
tariffs that firms treat as costs of producing a product and pass on (in whole or in part) to buyers by
charging higher prices.
consumption of fixed capital - ✔✔an estimate of the amount of capital worn out or used up (consumed)
in producing the gross domestic product; also called depreciation.
net domestic product (NDP) - ✔✔gross domestic product less the part of the year's output that is needed
to replace the capital goods worn out in producing the output; the nation's total output available for
consumption or additions to the capital stock.
personal income (PI) - ✔✔the earned and unearned income available to resource suppliers and others
before the payment of personal taxes.
disposable income (DI) - ✔✔personal income less personal taxes; income available for personal
consumption expenditures and personal saving.
Emily Charlene, ©2025 All Rights Reserved.
AP Macroeconomics: Unit 2 Exam
Questions and Answers 100% Pass
national income accounting - ✔✔The techniques used to measure the overall production of the economy
and other related variables for the nation as a whole.
gross domestic product - ✔✔The total market value of all final goods and services produced annually
within the boundaries of the United States, whether by U.S. or foreign-supplied resources.
intermediate goods - ✔✔products that are purchased for resale or further processing or manufacturing.
final goods - ✔✔goods that have been purchased for final use and not for resale or further processing or
manufacturing.
multiple counting - ✔✔wrongly including the value of intermediate goods in the gross domestic product;
counting the same good or service more than once.
value added - ✔✔The value of the product sold by a firm less the value of the produces (materials)
purchased and used by the firm to produce the product.
expenditures approach - ✔✔the method that adds all expenditures made for final goods and services to
measure the gross domestic product.
income approach - ✔✔the method that adds all the income generated by the production of final goods
and services to measure the gross domestic product.
personal consumption expenditures (C) - ✔✔the expenditures of households for durable and nondurable
consumer goods and services.
Emily Charlene, ©2025 All Rights Reserved.
, 2|Page
gross private domestic investment (Ig) - ✔✔Expenditures for newly produced capital goods (such as
machinery, equipment, tools, and buildings) and for additions to inventories.
net private domestic investment - ✔✔gross private domestic investment less consumption of fixed
capital; the addition to the nation's stock of capital during a year.
government purchases (G) - ✔✔expenditures by government for goods and services that government
consumes in providing public goods and for public (or social) capital that has a long lifetime; the
expenditures of all governments in the economy for those final goods and services.
net exports (Xn) - ✔✔Exports minus imports
national income - ✔✔total income earned by resource suppliers for their contributions to gross domestic
product; equal to the gross domestic product minus nonincome charges, minus net foreign factor income.
indirect business taxes - ✔✔such taxes as sales, excise, and business property taxes, license fees, and
tariffs that firms treat as costs of producing a product and pass on (in whole or in part) to buyers by
charging higher prices.
consumption of fixed capital - ✔✔an estimate of the amount of capital worn out or used up (consumed)
in producing the gross domestic product; also called depreciation.
net domestic product (NDP) - ✔✔gross domestic product less the part of the year's output that is needed
to replace the capital goods worn out in producing the output; the nation's total output available for
consumption or additions to the capital stock.
personal income (PI) - ✔✔the earned and unearned income available to resource suppliers and others
before the payment of personal taxes.
disposable income (DI) - ✔✔personal income less personal taxes; income available for personal
consumption expenditures and personal saving.
Emily Charlene, ©2025 All Rights Reserved.
