Question 1

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

Accepted Answer

A)   $0
B)   $10,000
C)   $90,000
D)   $100,000E) B) and D)
F) B) and C)

Question 2

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)   U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100.
B)   U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100.
C)   U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.
D)   U.S. consumption increases by $100, U.S. net exports do not change, and U.S. GDP increases by $100.E) B) and C)
F) None of the above

Question 3

Table 23-8
A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year.
 
-Refer to Table 23-8. In 2012, GDP deflator is

Accepted Answer

A)   122.
B)   134.
C)   92.
D)   113.E) B) and C)
F) B) and D)

Question 4

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 5

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 6

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Accepted Answer

A)   87.5.
B)   114.3.
C)   400.
D)   896.E) All of the above
F) None of the above

Question 7

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   spending on new residential construction and spending on stocks and bonds
B)   spending on new residential construction but not spending on stocks and bonds
C)   spending on stocks and bonds but not spending on new residential construction
D)   neither spending on stocks and bonds nor spending on new residential constructionE) All of the above
F) A) and D)

Question 8

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Accepted Answer

A)   values of goods and services based on surveys of consumers.
B)   market prices.
C)   quantities purchased by a typical urban household.
D)   profits from producing goods and services.E) A) and B)
F) None of the above

Question 9

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 10

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarters)  doesdo)  these transactions raise investment?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) B) and C)
F) B) and D)

Question 11

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Accepted Answer

A)   decreases.
B)   increases.
C)   doesn't change because both legal and illegal production are included in GDP.
D)   doesn't change because these activities are never included in GDP.E) None of the above
F) C) and D)

Question 12

GDP is equal to

Accepted Answer

A)   the market value of all final goods and services produced within a country in a given period of time.
B)   Y.
C)   C + I + G + NX.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 13

If total spending rises from one year to the next, then which of the following could not be true?

Accepted Answer

A)   the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices.
B)   the economy is producing a larger output of goods and services, and goods and services are selling at lower prices.
C)   the economy is producing a larger output of goods and services, and goods and services are selling at higher prices.
D)   the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.E) A) and B)
F) A) and C)

Question 14

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974.
 
-Refer to Table 23-7. From 1975 to 1976,

Accepted Answer

A)   inflation was 25% and output did not grow.
B)   inflation was 25% and output grew.
C)   inflation was 50% and output did not grow.
D)   inflation was 50% and output grew.E) A) and B)
F) A) and C)

Question 15

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Accepted Answer

A) True 
 B)False

Question 16

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 17

In the economy of Talikastan in 2015, consumption was $600, exports were $300, GDP was $1300, government purchases were $250, and investment was $300. What were Talikastan's imports in 2015?

Accepted Answer

A)   -$150
B)   -$200
C)   $200
D)   $150E) B) and C)
F) A) and C)

Question 18

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) None of the above
F) A) and B)

Question 19

Which of the following transactions is not included in GDP?

Accepted Answer

A)   oranges sold to households by a grocer.
B)   orange juice sold by a restaurant to its diners.
C)   oranges sold by a farmer to a grocery store.
D)   All of the above are included in GDP.E) All of the above
F) C) and D)

Question 20

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarters)  is are)  GDP higher?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) A) and C)
F) None of the above

Exam 15: Measuring a Nations Income

If total spending rises from one year to the next, then which of the following could not be true?

Correct AnswerverifiedShow Answer

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $600, exports were $300, GDP was $1300, government purchases were $250, and investment was $300. What were Talikastan's imports in 2015?

Correct AnswerverifiedShow Answer

When an American household purchases a bottle of Italian wine for $100,

Correct AnswerverifiedShow Answer

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarters) doesdo) these transactions raise investment?

Correct AnswerverifiedShow Answer

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

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

GDP is equal to

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Correct AnswerverifiedShow Answer

Household spending on education is included in

Correct AnswerverifiedShow Answer

Changes in real GDP reflect only changes in the amounts being produced.

Correct AnswerverifiedShow Answer

Table 23-8 A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-8. In 2012, GDP deflator is

Correct AnswerverifiedShow Answer

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Correct AnswerverifiedShow Answer

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

Correct AnswerverifiedShow Answer

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarters) is are) GDP higher?

Correct AnswerverifiedShow Answer

Which of the following transactions is not included in GDP?

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Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. From 1975 to 1976,

Correct AnswerverifiedShow Answer

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