Question 1

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Accepted Answer

A)   both real GDP and nominal GDP.
B)   real GDP but not nominal GDP.
C)   nominal GDP but not real GDP.
D)   neither nominal GDP nor real GDP.E) A) and B)
F) All of the above

Question 2

Consider two cars manufactured by Chevrolet in 2014. During 2014, Chevrolet sells one of the two cars to Emily for $20,000. Later in the same year, Emily sells the car to Jim for $18,000. The second automobile, with a market value of $19,000, is unsold at the end of 2014 and it remains in Chevrolet's inventory. The transactions just described contribute how much to GDP for 2014?

Accepted Answer

A)   $20,000
B)   $37,000
C)   $38,000
D)   $39,000E) A) and C)
F) None of the above

Question 3

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

Accepted Answer

A)   83.33, and this indicates that the price level has decreased by 16.67 percent since the base year.
B)   83.33, and this indicates that the price level has increased by 83.33 percent since the base year.
C)   120, and this indicates that the price level has increased by 20 percent since the base year.
D)   120, and this indicates that the price level has increased by 120 percent since the base year.E) B) and C)
F) A) and D)

Question 4

GDP

Accepted Answer

A)   is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being.
B)   is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
C)   is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being.
D)   is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well­being.E) A) and D)
F) B) and D)

Question 5

Which of the following is not correct?

Accepted Answer

A)   GNP equals net national product plus losses from depreciation.
B)   For most countries, including the United States, GDP and GNP are nearly the same.
C)   GDP and GNP typically move in opposite directions.
D)   Personal income equals disposable personal income plus personal taxes plus certain nontax payments.E) A) and D)
F) A) and C)

Question 6

Otherwise legal transactions that go unreported or unrecorded are called

Accepted Answer

A)   the underground economy.
B)   the shadow economy.
C)   the informal economy.
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 7

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) B) and D)

Question 8

If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.

Accepted Answer

A) True 
 B)False

Question 9

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.E) A) and B)
F) All of the above

Question 10

Net exports equal

Accepted Answer

A)   exports plus imports.
B)   exports minus imports.
C)   imports minus exports.
D)   GDP minus imports.E) A) and D)
F) None of the above

Question 11

Expenditures on a nation's domestic production

Accepted Answer

A)   are less than its domestic production.
B)   are equal to its domestic production.
C)   are greater than its domestic production.
D)   could be less than, equal to, or greater than its domestic production.E) B) and D)
F) None of the above

Question 12

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Accepted Answer

A)   GDP would definitely increase, despite the fact that GDP includes leisure.
B)   GDP would definitely increase because GDP excludes leisure.
C)   GDP could either increase or decrease because GDP includes leisure.
D)   GDP could either increase or decrease because GDP excludes leisure.E) B) and D)
F) A) and C)

Question 13

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Accepted Answer

A)   $11 million
B)   $10 million
C)   $7 million
D)   $9 millionE) B) and D)
F) A) and C)

Question 14

The income that households and noncorporate businesses receive is called

Accepted Answer

A)   personal income.
B)   net national product.
C)   disposable personal income.
D)   national income.E) None of the above
F) All of the above

Question 15

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 16

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Accepted Answer

A) True 
 B)False

Question 17

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)   the quality of these items is not high enough to contribute value to GDP.
B)   measuring them is so difficult.
C)   the government wants to discourage the production and consumption of these items.
D)   these items are not reported on income tax forms.E) B) and C)
F) A) and D)

Question 18

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) All of the above

Question 19

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 20

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods ...

Exam 10: Measuring a Nations Income

Correct Answer
verified

The income that households and noncorporate businesses receive is called

Correct Answer
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Which of the following is not correct?

Correct Answer
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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?

Correct Answer
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If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.

Correct Answer
verified

GDP

Correct Answer
verified

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Correct Answer
verified

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Correct Answer
verified

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Correct Answer
verified

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

Correct Answer
verified

Net exports equal

Correct Answer
verified

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct Answer
verified

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Correct Answer
verified

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Correct Answer
verified

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

Correct Answer
verified

Expenditures on a nation's domestic production

Correct Answer
verified

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Correct Answer
verified

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Correct Answer
verified
Sales of used goods ...
View Answer

Otherwise legal transactions that go unreported or unrecorded are called

Correct Answer
verified

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

Correct Answer
verified

Exam 10: Measuring a Nations Income

Correct AnswerverifiedShow Answer

The income that households and noncorporate businesses receive is called

Correct AnswerverifiedShow Answer

Which of the following is not correct?

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 GDP in 2010?

Correct AnswerverifiedShow Answer

If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.

Correct AnswerverifiedShow Answer

GDP

Correct AnswerverifiedShow Answer

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Correct AnswerverifiedShow Answer

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Correct AnswerverifiedShow Answer

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

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

Net exports equal

Correct AnswerverifiedShow Answer

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Correct AnswerverifiedShow Answer

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Correct AnswerverifiedShow Answer

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

Correct AnswerverifiedShow Answer

Expenditures on a nation's domestic production

Correct AnswerverifiedShow Answer

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Correct AnswerverifiedShow Answer

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Correct AnswerverifiedSales of used goods ...View AnswerShow Answer

Otherwise legal transactions that go unreported or unrecorded are called

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

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Sales of used goods ...
View Answer

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