Question 1

Which of the following transactions adds to U.S. GDP for 2015?

Accepted Answer

A)   In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000.
B)   An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time.
C)   When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month.
D)   None of the above transactions adds to U.S. GDP for 2015.E) A) and D)
F) A) and C)

Question 2

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. In which year was this country's nominal GDP highest?

Accepted Answer

A)   2014
B)   2015
C)   2016
D)   2017E) All of the above
F) A) and C)

Question 3

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

Accepted Answer

A)   When she babysits for her sister and when she babysits for someone else.
B)   When she babysits for her sister, but not when she babysits for someone else.
C)   When she babysits for someone else, but not when she babysits for her sister.
D)   Neither when she babysits for her sister nor for someone else.E) None of the above
F) A) and B)

Question 4

Figure 23-1. 
-Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

Accepted Answer

A)   markets for factors of production and markets for goods and services
B)   firms and households
C)   GDP deflator and CPI
D)   flow of dollars and flow of inputs and outputsE) B) and D)
F) All of the above

Question 5

Which of the following transactions adds to U.S. GDP for 2015?

Accepted Answer

A)   In 2015, Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The 2000 pounds of cheese remains in Frank's inventory at the end of 2015.
B)   An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time.
C)   When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,500 per month.
D)   All of the above transactions add to U.S. GDP for 2015.E) A) and D)
F) All of the above

Question 6

Table 23-2
The table below contains data for country A for the year 2010.
 
-Refer to Table 23-2. What was country A's investment in 2010?

Accepted Answer

A)   $1178
B)   $1295
C)   $1882
D)   $1999E) C) and D)
F) None of the above

Question 7

In the GDP accounts production equals

Accepted Answer

A)   income.
B)   income + saving.
C)   income - government expenditures.
D)   income - imports.E) C) and D)
F) None of the above

Question 8

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 9

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Accepted Answer

A)   $150 to GDP.
B)   $250 to GDP.
C)   between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.
D)   $400 to GDP.E) A) and B)
F) None of the above

Question 10

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP?

Accepted Answer

A)   $8,000
B)   $15,000
C)   $17,000
D)   $13,000E) All of the above
F) A) and C)

Question 11

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays the salary of a Navy officer.
B)   The state of Nevada pays a private firm to repair a Nevada state highway.
C)   The city of Las Vegas, Nevada pays a private firm to collect garbage in that city.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 12

Table 23-2
The table below contains data for country A for the year 2010.
 
-Refer to Table 23-2. What was country A's GDP in 2010?

Accepted Answer

A)   $6359
B)   $7136
C)   $7253
D)   $8147E) A) and B)
F) None of the above

Question 13

U.S. GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 14

A recession has traditionally been defined as a period during which

Accepted Answer

A)   nominal GDP declines for two consecutive quarters.
B)   nominal GDP declines for four consecutive quarters.
C)   real GDP declines for two consecutive quarters.
D)   real GDP declines for four consecutive quarters.E) C) and D)
F) A) and B)

Question 15

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 16

Which component of GDP includes spending on new structures and equipment?

Accepted Answer

The answer of Which component of GDP includes spending on...

Question 17

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Accepted Answer

A)   consumption, investment and imports
B)   only consumption and investment
C)   only consumption and imports
D)   only investment and importsE) A) and C)
F) B) and D)

Question 18

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Accepted Answer

A)   1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP.
B)   1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.
C)   6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP.
D)   6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.E) A) and D)
F) B) and C)

Question 19

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

Accepted Answer

A)   $6.7 billion.
B)   $15 billion.
C)   $21.6 billion.
D)   $38 billion.E) A) and B)
F) None of the above

Question 20

Table 23-1
The table below contains data for Chereaux for the year 2015.
 
-Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

Accepted Answer

A)   $214.
B)   $200.
C)   $204.
D)   $230.E) None of the above
F) A) and D)

Exam 15: Measuring a Nations Income

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Correct AnswerverifiedShow Answer

Figure 23-1. -Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

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Which of the following transactions adds to U.S. GDP for 2015?

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If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

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Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

Correct AnswerverifiedShow Answer

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

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U.S. GDP excludes the production of most illegal goods.

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Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

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Which of the following items is counted as part of government purchases?

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Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's nominal GDP highest?

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Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's GDP in 2010?

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An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

A recession has traditionally been defined as a period during which

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In the GDP accounts production equals

Correct AnswerverifiedShow Answer

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP?

Correct AnswerverifiedShow Answer

Which component of GDP includes spending on new structures and equipment?

Correct AnswerverifiedShow Answer

Which of the following transactions adds to U.S. GDP for 2015?

Correct AnswerverifiedShow Answer

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Correct AnswerverifiedShow Answer

Microeconomics and macroeconomics are closely linked.

Correct AnswerverifiedShow Answer

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's investment in 2010?

Correct AnswerverifiedShow Answer

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