Question 1

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Accepted Answer

The GDP deflator for 2010 was ...

Question 2

A form of government spending that is not made in exchange for a currently produced good or service is called

Accepted Answer

A)   a transfer payment.
B)   consumption.
C)   investment.
D)   None of the above is correct.E) C) and D)
F) None of the above

Question 3

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 4

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Accepted Answer

A)   longer life expectancy and a lower percentage of the population that is literate.
B)   longer life expectancy and a higher percentage of the population that is literate.
C)   very nearly the same life expectancy and a lower percentage of the population that is literate.
D)   very nearly the same life expectancy and a higher percentage of the population that is literate.E) B) and C)
F) A) and D)

Question 5

Table 23-3
The table below contains data for the country of Crete for the year 2010.
 
-Refer to Table 23-3. What was Crete's GDP in 2010?

Accepted Answer

A)   $4623
B)   $5731
C)   $6037
D)   $6839E) B) and D)
F) A) and D)

Question 6

Countries with low GDP per person tend to have

Accepted Answer

A)   lower rates of child malnutrition.
B)   fewer infants with low birth weight.
C)   higher rates of infant mortality.
D)   more access to safe drinking water.E) A) and D)
F) A) and C)

Question 7

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) A) and B)
F) A) and D)

Question 8

In the United States in 2012, consumption represented approximately

Accepted Answer

A)   60 percent of GDP.
B)   70 percent of GDP.
C)   80 percent of GDP.
D)   90 percent of GDP.E) C) and D)
F) A) and B)

Question 9

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) All of the above
F) C) and D)

Question 10

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

Accepted Answer

A)   both the increased inventory of sugar and the increased inventory of energy drinks.
B)   the increased inventory of sugar, but not the increased inventory of energy drinks.
C)   the increased inventory of energy drinks, but not the increased inventory of sugar.
D)   neither the increased inventory of sugar nor the increased inventory of energy drinks.E) C) and D)
F) A) and D)

Question 11

Explain how GNP differs from GDP.

Accepted Answer

GNP includes income from a nat...

Question 12

Total income from the domestic production of final goods and services equals

Accepted Answer

A)   only household expenditures for these goods.
B)   only household and business expenditures for these goods.
C)   only household and government expenditures for these goods.
D)   the expenditures for these goods whoever buys them.E) B) and C)
F) A) and B)

Question 13

Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year.
 
-Refer to Table 23-12. Calculate real and nominal GDP for the year 2012.

Accepted Answer

Nominal GD...

Question 14

In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $1688
B)   $9000
C)   $13,500
D)   $15,000E) A) and B)
F) A) and C)

Question 15

GDP per person tells us the income and expenditure of the

Accepted Answer

A)   richest person in the economy.
B)   poorest person in the economy.
C)   average person in the economy.
D)   entire economy.E) B) and D)
F) A) and D)

Question 16

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) A) and C)
F) A) and B)

Question 17

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) B) and C)
F) A) and D)

Question 18

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Accepted Answer

A)   U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected.
B)   U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000.
C)   U.S. government purchases, net exports, and GDP are unaffected.
D)   U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.E) All of the above
F) B) and D)

Question 19

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)   Argentina, Bolivia, Peru
B)   Argentina, Peru, Bolivia
C)   Bolivia, Argentina, Peru
D)   Peru, Bolivia, ArgentinaE) A) and D)
F) None of the above

Question 20

Government purchases include spending on goods and services by

Accepted Answer

A)   the federal government, but not by state or local governments.
B)   federal and state governments, but not by local governments.
C)   federal, state, and local governments.
D)   federal, state, and local governments, as well as household spending by employees of those governments.E) All of the above
F) A) and B)

Exam 10: Measuring a Nations Income

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Correct AnswerverifiedShow Answer

Total income from the domestic production of final goods and services equals

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Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2012.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

A form of government spending that is not made in exchange for a currently produced good or service is called

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Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's GDP in 2010?

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Explain how GNP differs from GDP.

Correct AnswerverifiedGNP includes income from a nat...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

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

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Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

Correct AnswerverifiedShow Answer

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Correct AnswerverifiedThe GDP deflator for 2010 was ...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

GDP per person tells us the income and expenditure of the

Correct AnswerverifiedShow Answer

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Correct AnswerverifiedShow Answer

Which of the following transactions is not included in GDP?

Correct AnswerverifiedShow Answer

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Correct AnswerverifiedShow Answer

Countries with low GDP per person tend to have

Correct AnswerverifiedShow Answer

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

In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

In the United States in 2012, consumption represented approximately

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Government purchases include spending on goods and services by

Correct AnswerverifiedShow Answer

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Nominal GD...
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GNP includes income from a nat...
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The GDP deflator for 2010 was ...
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