Question 1

During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person

Accepted Answer

A)   grew by more than 12 percent.
B)   grew, but by less than 12 percent.
C)   was unchanged.
D)   decreased.E) A) and B)
F) A) and C)

Question 2

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. 
-Refer to Table 23-6. In 2012, this country's GDP deflator was

Accepted Answer

A)   74.2.
B)   100.0.
C)   171.4.
D)   240.0.E) C) and D)
F) A) and B)

Question 3

Define gross domestic product.

Accepted Answer

The market value of all final ...

Question 4

During the third quarter of this year a firm produces consumer goods and adds some of those goods to its inventory. During the fourth quarter of this year, the firm sells the goods at a retail outlet, with the result that the value of its inventory at the end of the fourth quarter is smaller than the value of its inventory at the end of the third quarter. These actions affect which component(s)  of fourth-quarter GDP?

Accepted Answer

A)   they increase consumption and have no effect on investment
B)   they increase consumption and decrease investment
C)   they have no effect on either consumption or investment
D)   they have no effect on consumption and decrease investmentE) A) and B)
F) All of the above

Question 5

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Accepted Answer

A) True 
 B)False

Question 6

Social Security payments are

Accepted Answer

A)   included in GDP because they represent current income.
B)   included in GDP because they represent potential consumption.
C)   excluded from GDP because they are not private pensions.
D)   excluded from GDP because they do not reflect the economy's production.E) B) and C)
F) None of the above

Question 7

U.S. GNP

Accepted Answer

A)   includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign countries.
B)   includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in foreign countries.
C)   excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries.
D)   excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign countries.E) None of the above
F) A) and C)

Question 8

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

Accepted Answer

A)   $12 million
B)   $11 million
C)   $10 million
D)   $9 millionE) All of the above
F) None of the above

Question 9

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A)   Japan, Germany, United States
B)   Japan, United States, Germany
C)   Germany, United States, Japan
D)   United States, Japan, GermanyE) A) and B)
F) A) and C)

Question 10

A farmer sells sugar to a candy producer for $150. If the producer uses this sugar to make candy that sells for $200, what is the total contribution to GDP from these transactions?

Accepted Answer

The answer of A farmer sells sugar to a candy...

Question 11

In the United States in 2012, government purchases of goods and services were

Accepted Answer

A)   larger than consumption, but smaller than investment.
B)   larger than investment, but smaller than consumption.
C)   smaller than both consumption and investment.
D)   larger than both consumption and investment.E) None of the above
F) A) and C)

Question 12

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Accepted Answer

A)   the amount she paid to buy the new parts
B)   the amount she paid to buy new parts and gasoline
C)   the amount she paid to buy new parts, gasoline, and oil.
D)   the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.E) B) and D)
F) B) and C)

Question 13

U.S. GDP was almost $14 billion in 2009.

Accepted Answer

A) True 
 B)False

Question 14

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Accepted Answer

GDP is reported ever...

Question 15

If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is

Accepted Answer

A)   80, and this indicates that the price level has decreased by 20 percent since the base year.
B)   80, and this indicates that the price level has increased by 80 percent since the base year.
C)   125, and this indicates that the price level has increased by 25 percent since the base year.
D)   125, and this indicates that the price level has increased by 125 percent since the base year.E) A) and D)
F) C) and D)

Question 16

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 17

Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following values would be included in U.S. GDP for 2015?

Accepted Answer

A)   the rent that Sam, an American citizen, would have paid on his home in Houston in 2015 had he not owned that home.
B)   the rent that Jim, an American citizen, paid on his apartment in San Francisco in 2015.
C)   the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in San Antonio and practiced law there in 2015
D)   All of the above would be included in U.S. GDP for 2015.E) All of the above
F) B) and C)

Question 19

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

Question 20

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Accepted Answer

A)   U.S. net exports decrease and U.S. GDP decreases.
B)   U.S. net exports are unaffected and U.S. GDP decreases.
C)   U.S. net exports are unaffected and U.S. GDP is unaffected.
D)   U.S. net exports decrease and U.S. GDP is unaffected.E) A) and C)
F) None of the above

Exam 23: Measuring a Nations Income

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Correct Answer
verified

Which of the following values would be included in U.S. GDP for 2015?

Correct Answer
verified

Social Security payments are

Correct Answer
verified

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 Answer
verified

Correct Answer
verified

Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Correct Answer
verified

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2012, this country's GDP deflator was

Correct Answer
verified

If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is

Correct Answer
verified

A farmer sells sugar to a candy producer for $150. If the producer uses this sugar to make candy that sells for $200, what is the total contribution to GDP from these transactions?

Correct Answer
verified

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

Correct Answer
verified

In the United States in 2012, government purchases of goods and services were

Correct Answer
verified

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Correct Answer
verified

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Correct Answer
verified
GDP is reported ever...
View Answer

U.S. GNP

Correct Answer
verified

Define gross domestic product.

Correct Answer
verified
The market value of all final ...
View Answer

U.S. GDP was almost $14 billion in 2009.

Correct Answer
verified

Correct Answer
verified

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Correct Answer
verified

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Correct Answer
verified

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 Answer
verified
The purchase of foreign equipment is cou...
View Answer

Exam 23: Measuring a Nations Income

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Correct AnswerverifiedShow Answer

Which of the following values would be included in U.S. GDP for 2015?

Correct AnswerverifiedShow Answer

Social Security payments are

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

Correct AnswerverifiedShow Answer

Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Correct AnswerverifiedShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2012, this country's GDP deflator was

Correct AnswerverifiedShow Answer

If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is

Correct AnswerverifiedShow Answer

A farmer sells sugar to a candy producer for $150. If the producer uses this sugar to make candy that sells for $200, what is the total contribution to GDP from these transactions?

Correct AnswerverifiedShow Answer

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

Correct AnswerverifiedShow Answer

In the United States in 2012, government purchases of goods and services were

Correct AnswerverifiedShow Answer

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Correct AnswerverifiedShow Answer

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Correct AnswerverifiedGDP is reported ever...View AnswerShow Answer

U.S. GNP

Correct AnswerverifiedShow Answer

Define gross domestic product.

Correct AnswerverifiedThe market value of all final ...View AnswerShow Answer

U.S. GDP was almost $14 billion in 2009.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Correct AnswerverifiedShow Answer

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

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

Correct Answer
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verified
GDP is reported ever...
View Answer

Correct Answer
verified

Correct Answer
verified
The market value of all final ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The purchase of foreign equipment is cou...
View Answer