True/False Indicate whether the sentence or statement is true or false. 1. For an economy as a whole, income equals expenditure because the income of the seller must be equal to the expenditure of the buyer. 2. The production of an apple contributes more to GDP than the production of a gold ring because food is necessary for life itself. 3. If a timber yard sells $1,000 of timber to a carpenter and the carpenter uses the timber to build a garage which he sells for $5,000, the contribution to GDP is $6,000. 4. A country with a larger GDP per person generally has a greater standard of living or quality of life than a country with a smaller GDP per person. 5. If nominal GDP in 2005 exceeds nominal GDP in 2004, real output must have risen. 6. If US GDP exceeds US GNP, then foreigners produce more in the US than US citizens produce in the rest of the world, 7. Wages are an example of a transfer payment because there is a transfer of payment from the firm to the worker. 8. In the US, investment is the largest component of GDP. 9. Nominal GDP employs current prices to value output while real GDP employs constant base- year prices to value output. 10. A new car produced in 2004, but first sold in 2005, should be counted in 2005 GDP because that is when it was first sold as a final good. 11. When the city council of Southampton purchases a new school building, the investment component of GDP increases. 12 A recession occurs when real GDP declines. 13. Depreciation is the value of the wear and tear on the economy's equipment and structures. 14. Net National Product always exceeds a nation's total income because of depreciation and taxes