Question 1

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Accepted Answer

The purchase of foreign equipment is cou...

Question 2

Table 23-1
The table below contains data for Chereaux for the year 2015.
 
-Refer to Table 23-1. Personal income for Chereaux in 2015 is

Accepted Answer

A)   $178.
B)   $201.
C)   $259.
D)   $196.E) All of the above
F) B) and C)

Question 3

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Accepted Answer

A)   the effect of taxes on the prices of airline tickets, and the profitability of automobile-manufacturing firms
B)   the price of beef, and wage differences between genders
C)   how consumers maximize utility, and how prices are established in markets for agricultural products
D)   the percentage of the labor force that is out of work, and differences in average income from country to countryE) A) and B)
F) A) and C)

Question 4

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)   consumption, since the goods will be sold to consumers in another period.
B)   intermediate goods, and so is not included in that year's GDP.
C)   investment, since GDP aims to measure the value of the economy's production that year.
D)   spending on durable goods, since the goods could not be inventoried unless they were durable.E) A) and C)
F) A) and B)

Question 5

Which government entity computes U.S. GDP every three months?

Accepted Answer

A)   the Council of Economic Advisers
B)   the Department of Commerce
C)   the Department of Treasury
D)   the Federal ReserveE) B) and D)
F) None of the above

Question 6

GDP does not reflect

Accepted Answer

A)   the value of leisure.
B)   the value of goods and services produced at home.
C)   the quality of the environment.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 7

Consumption consists of spending by households on goods and services, with the exception of

Accepted Answer

A)   purchases of intangible services.
B)   purchases of durable goods.
C)   purchases of new houses.
D)   spending on education.E) B) and C)
F) None of the above

Question 8

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) None of the above
F) All of the above

Question 9

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 10

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 11

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Accepted Answer

A)   nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 95.45.
B)   nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77.
C)   nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.
D)   nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 104.77.E) C) and D)
F) A) and B)

Question 12

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

Accepted Answer

A)   nominal GDP.
B)   real GDP.
C)   the GDP deflator.
D)   GNP.E) A) and B)
F) A) and C)

Question 13

Which of the following is a way to compute GDP?

Accepted Answer

A)   add up the wages paid to all workers
B)   add up the quantities of all final goods and services
C)   add up the market values of all final goods and services
D)   add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and servicesE) B) and C)
F) A) and B)

Question 14

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $1350
B)   $1450
C)   $1050
D)   $1750E) C) and D)
F) B) and C)

Question 15

Which of the following is not included in U.S. GDP?

Accepted Answer

A)   additions of newly produced output to inventory
B)   production of U.S citizens working in foreign countries.
C)   the estimated rental value of owner-occupied housing
D)   the value of food purchased from a grocery store to make meals at home without payE) B) and C)
F) A) and B)

Question 16

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Accepted Answer

A)   increased.
B)   decreased.
C)   stayed the same.
D)   may have increased, decreased, or stayed the same.E) All of the above
F) B) and D)

Question 17

Which of the following statements about nominal GDP and real GDP is correct?

Accepted Answer

A)   Nominal GDP is a better gauge of economic well-being than real GDP.
B)   Real GDP is a better gauge of economic well-being than nominal GDP.
C)   Real GDP and nominal GDP are equally good measures of economic well-being.
D)   Neither nominal nor real GDP provide a measure of economic well-being.E) A) and B)
F) None of the above

Question 18

The inflation rate is the

Accepted Answer

A)   absolute change in real GDP from one period to another.
B)   percentage change in real GDP from one period to another.
C)   absolute change in the price level from one period to another.
D)   percentage change in the price level from one period to another.E) All of the above
F) A) and B)

Question 19

If real GDP is higher in one country than in another, then we can be sure that the standard of living is higher in the country with the higher real GDP.

Accepted Answer

A) True 
 B)False

Question 20

What are transfer payments, and how do they affect the calculation of GDP?

Accepted Answer

Transfer payments are income b...

Exam 10: Measuring a Nations Income

The inflation rate is the

Correct AnswerverifiedShow Answer

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Correct AnswerverifiedThe purchase of foreign equipment is cou...View AnswerShow Answer

Which of the following is not included in U.S. GDP?

Correct AnswerverifiedShow Answer

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Correct AnswerverifiedShow Answer

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct AnswerverifiedShow Answer

If real GDP is higher in one country than in another, then we can be sure that the standard of living is higher in the country with the higher real GDP.

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

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Which government entity computes U.S. GDP every three months?

Correct AnswerverifiedShow Answer

GDP does not reflect

Correct AnswerverifiedShow Answer

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Correct AnswerverifiedShow Answer

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Personal income for Chereaux in 2015 is

Correct AnswerverifiedShow Answer

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Correct AnswerverifiedShow Answer

The value of goods added to a firm's inventory in a certain year is treated as

Correct AnswerverifiedShow Answer

Which of the following statements about nominal GDP and real GDP is correct?

Correct AnswerverifiedShow Answer

According to the circular-flow diagram GDP

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

What are transfer payments, and how do they affect the calculation of GDP?

Correct AnswerverifiedTransfer payments are income b...View AnswerShow Answer

Consumption consists of spending by households on goods and services, with the exception of

Correct AnswerverifiedShow Answer

Which of the following is a way to compute GDP?

Correct AnswerverifiedShow Answer

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The purchase of foreign equipment is cou...
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Transfer payments are income b...
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