Question 1

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Accepted Answer

A) True 
 B)False

Question 2

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A)  Ghana, Kenya, Tanzania
B)  Ghana, Tanzania, Kenya
C)  Kenya, Tanzania, Ghana
D)  Kenya, Ghana, TanzaniaE) B) and C)
F) A) and C)

Question 3

Nominal GDP will definitely increase when

Accepted Answer

A)  prices increase and output increases.
B)  prices increase and output decreases.
C)  prices decrease and output increases.
D)  All of the above are correct.E) B) and D)
F) A) and C)

Question 4

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Accepted Answer

A)  investment.
B)  government spending.
C)  consumption of services.
D)  consumption of durable goods.E) A) and C)
F) A) and B)

Question 5

Which of the following is correct?

Accepted Answer

A)  Nominal GDP is always less than real GDP.
B)  Nominal GDP is always greater than real GDP.
C)  Nominal GDP equals real GDP in the base year.
D)  Nominal GDP equals real GDP in all years but the base year.E) All of the above
F) B) and C)

Question 6

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Accepted Answer

A) True 
 B)False

Question 7

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974. 
-Refer to Table 23-7. Which of the following is not correct?

Accepted Answer

A)  This economy experienced growth from 1974 to 1975.
B)  This economy experienced growth from 1975 to 1976.
C)  This economy experienced growth from 1976 to 1977.
D)  This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977.E) B) and D)
F) None of the above

Question 8

According to the circular-flow diagram, GDP

Accepted Answer

A)  can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
B)  can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
C)  can be computed as either the revenue firms receive from the sales of goods and services or the payments firms make to factors of production.
D)  can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.E) None of the above
F) A) and B)

Question 9

According to the circular-flow diagram GDP

Accepted Answer

A)  can be computed as the total income paid by firms or as expenditures on final goods and services.
B)  can be computed as the total income paid by firms, but not as expenditures on final goods and services.
C)  can be computed as expenditures on final goods and services, but not as the total income paid by firms.
D)  cannot be computed as either total income paid by firms or expenditures on final goods and services.E) C) and D)
F) A) and B)

Question 10

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

Accepted Answer

A)  reduced measured GDP.
B)  not affected measured GDP.
C)  increased measured GDP by the value of the restaurant meals.
D)  increased measured GDP by the value added by the restaurant's preparation and serving of the meals.E) A) and D)
F) None of the above

Question 11

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Accepted Answer

A)  1/3 times as much to GDP as the production of good B.
B)  3/2 times as much to GDP as the production of good B.
C)  3 times as much to GDP as the production of good B.
D)  2/3 times as much to GDP as production of good B.E) None of the above
F) All of the above

Question 12

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur...

Question 13

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Accepted Answer

A)  Sam's and Ellen's.
B)  Sam's but not Ellen's.
C)  Ellen's but not Sam's.
D)  Neither Sam's nor Ellen's.E) None of the above
F) A) and C)

Question 14

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Accepted Answer

A) True 
 B)False

Question 15

Household spending on education is included in

Accepted Answer

A)  consumption, although it might be argued that it would fit better in investment.
B)  investment, although it might be argued that it would fit better in consumption.
C)  government spending, based on the fact that most higher-education students attend publicly-supported colleges and universities.
D)  None of the above is correct; in general, household spending on services is not included in any component of GDP.E) A) and D)
F) A) and C)

Question 16

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

Accepted Answer

A)  inventory goods.
B)  transitory goods.
C)  final goods.
D)  intermediate goods.E) B) and D)
F) B) and C)

Question 17

A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A)  Mexican GNP and U.S. GNP.
B)  Mexican GDP and U.S. GNP.
C)  Mexican GNP and U.S. GDP.
D)  Mexican GDP and U.S. GDP.E) None of the above
F) C) and D)

Question 18

Write the formula for calculating a GDP deflator using only nominal and real GDP.

Accepted Answer

The answer of Write the formula for calculating a GDP...

Question 19

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Accepted Answer

The answer of Last quarter Newton computers produced 3,000 computers....

Question 20

How is net national product (NNP)  calculated?

Accepted Answer

A)  Saving is added to the total income of a nation's citizens.
B)  Saving is added to the total income earned within a nation.
C)  Depreciation losses are subtracted from the total income of a nation's citizens.
D)  Depreciation losses are subtracted from the total income earned within a nation.E) A) and B)
F) All of the above

Exam 23: Measuring a Nation S Income

According to the circular-flow diagram GDP

Correct AnswerverifiedShow Answer

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

Correct AnswerverifiedShow Answer

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Correct AnswerverifiedShow Answer

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Correct AnswerverifiedShow Answer

A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

Correct AnswerverifiedShow Answer

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. Which of the following is not correct?

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Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Correct AnswerverifiedShow Answer

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

Correct AnswerverifiedShow Answer

Write the formula for calculating a GDP deflator using only nominal and real GDP.

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Which of the following is correct?

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Nominal GDP will definitely increase when

Correct AnswerverifiedShow Answer

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct AnswerverifiedShow Answer

Household spending on education is included in

Correct AnswerverifiedShow Answer

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Correct AnswerverifiedShow Answer

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Correct AnswerverifiedShow Answer

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Correct AnswerverifiedShow Answer

According to the circular-flow diagram, GDP

Correct AnswerverifiedShow Answer

How is net national product (NNP) calculated?

Correct AnswerverifiedShow Answer

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Correct AnswerverifiedIntermediate goods produced and sold dur...View AnswerShow Answer

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Correct AnswerverifiedShow Answer

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Intermediate goods produced and sold dur...
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