Question 1

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Accepted Answer

A)   GDP increases by $10.00
B)   GDP increases by $12.00
C)   GDP increases by $22.00
D)   GDP increases by $32.00E) None of the above
F) A) and B)

Question 2

Which of the following is an example of a durable good?

Accepted Answer

A)   a hair dryer.
B)   a suit.
C)   a pair of shoes.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 3

GDP includes the value of all

Accepted Answer

A)   final goods and services produced within a country using primarily market prices to measure the value of goods and services.
B)   final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.
C)   goods and services produced within a country using primarily market prices to measure the value of goods and services.
D)   goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.E) A) and C)
F) A) and B)

Question 4

For an economy as a whole, income must equal expenditure because

Accepted Answer

A)   the number of firms is equal to the number of households in an economy.
B)   individuals can only spend what they earn each period.
C)   every dollar of spending by some buyer is a dollar of income for some seller.
D)   every dollar of saving by some consumer is a dollar of spending by some other consumer.E) B) and C)
F) A) and C)

Question 5

When economists talk about growth in the economy, they measure that growth as the

Accepted Answer

A)   absolute change in nominal GDP from one period to another.
B)   percentage change in nominal GDP from one period to another.
C)   absolute change in real GDP from one period to another.
D)   percentage change in real GDP from one period to another.E) None of the above
F) B) and D)

Question 6

Changes in inventory are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 7

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 2011, this country's real GDP was

Accepted Answer

A)   $320.
B)   $440.
C)   $760.
D)   $770.E) A) and B)
F) None of the above

Question 8

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

Question 9

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. What was this country's real GDP in 2016?

Accepted Answer

A)   $10,575
B)   $11,250
C)   $10,950
D)   $12,550E) A) and D)
F) None of the above

Question 10

In the actual economy, goods and services are purchased by

Accepted Answer

A)   households, but not firms or the government.
B)   households and firms, but not the government.
C)   households and the government, but not firms.
D)   households, firms, and the government.E) None of the above
F) B) and C)

Question 11

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a question addressed by macroeconomists?

Accepted Answer

A)   Why is average income high in some nations but low in others?
B)   What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment?
C)   What is the impact of foreign competition on the U.S. auto industry?
D)   Why do production and employment expand in some years and contract in others?E) None of the above
F) A) and C)

Question 13

The basic tools of supply and demand are

Accepted Answer

A)   useful only in the analysis of economic behavior in individual markets.
B)   useful in analyzing the overall economy, but not in analyzing individual markets.
C)   central to microeconomic analysis, but seldom used in macroeconomic analysis.
D)   central to macroeconomic analysis as well as to microeconomic analysis.E) C) and D)
F) A) and D)

Question 14

GDP is defined as the

Accepted Answer

A)   value of all goods and services produced within a country in a given period of time.
B)   value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
C)   value of all final goods and services produced within a country in a given period of time.
D)   value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.E) None of the above
F) A) and B)

Question 15

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Accepted Answer

A) True 
 B)False

Question 16

Gross domestic product includes all

Accepted Answer

A)   legal and illegal final goods, but it excludes all legal and illegal final services.
B)   legal and illegal final goods and all legal and illegal final services.
C)   legal final goods and services, but it excludes illegal final goods and services.
D)   legal and illegal final goods and legal final services, but it excludes illegal final services.E) A) and B)
F) A) and C)

Question 17

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

Question 18

Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Accepted Answer

A)   Country A because it had the higher nominal GDP per person.
B)   Country B because it had the higher nominal GDP per person.
C)   Country A because it had the higher real GDP per person.
D)   Country B because it had the higher real GDP per person.E) None of the above
F) C) and D)

Question 19

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

Question 20

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Accepted Answer

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

Exam 10: Measuring a Nations Income

GDP is defined as the

Correct Answer
verified

In the actual economy, goods and services are purchased by

Correct Answer
verified

Microeconomics and macroeconomics are closely linked.

Correct Answer
verified

For an economy as a whole, income must equal expenditure because

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's real GDP in 2016?

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 2011, this country's real GDP was

Correct Answer
verified

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Correct Answer
verified

Social Security payments are

Correct Answer
verified

The basic tools of supply and demand are

Correct Answer
verified

GDP includes the value of all

Correct Answer
verified

Changes in inventory are included in the investment component of GDP.

Correct Answer
verified

Correct Answer
verified

Which of the following is an example of a durable good?

Correct Answer
verified

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

Correct Answer
verified

Gross domestic product includes all

Correct Answer
verified

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct Answer
verified

Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Correct Answer
verified

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Correct Answer
verified

Which of the following is not a question addressed by macroeconomists?

Correct Answer
verified

When economists talk about growth in the economy, they measure that growth as the

Correct Answer
verified

Exam 10: Measuring a Nations Income

GDP is defined as the

Correct AnswerverifiedShow Answer

In the actual economy, goods and services are purchased by

Correct AnswerverifiedShow Answer

Microeconomics and macroeconomics are closely linked.

Correct AnswerverifiedShow Answer

For an economy as a whole, income must equal expenditure because

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's real GDP in 2016?

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 2011, this country's real GDP was

Correct AnswerverifiedShow Answer

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Correct AnswerverifiedShow Answer

Social Security payments are

Correct AnswerverifiedShow Answer

The basic tools of supply and demand are

Correct AnswerverifiedShow Answer

GDP includes the value of all

Correct AnswerverifiedShow Answer

Changes in inventory are included in the investment component of GDP.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of a durable good?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gross domestic product includes all

Correct AnswerverifiedShow Answer

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct AnswerverifiedShow Answer

Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Correct AnswerverifiedShow Answer

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Correct AnswerverifiedShow Answer

Which of the following is not a question addressed by macroeconomists?

Correct AnswerverifiedShow Answer

When economists talk about growth in the economy, they measure that growth as the

Correct AnswerverifiedShow Answer

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