Question 1

Explain how each of the following transactions would affect GDP for the current year. Which spending categories are affected?

Accepted Answer

The answer of Explain how each of the following transactions...

Question 2

In which spending category would you enter the following transaction? A restaurant purchases fresh fish at the local fish market that it plans to sell as one of its nightly specials.

Accepted Answer

A) None of these 
B) Consumption 
C) Government purchases 
D) Investment 
E) Net exports 
A) None of these 
B) Consumption 
C) Government purchases 
D) Investment 
E) Net exports

Question 3

The difference between investment, the purchases of final goods by firms, and depreciation is called net investment.

Accepted Answer

A) True 
 B)False

Question 4

Exhibit 18-3  
-According to the data in Exhibit 18-3, the contribution to GDP from the production of a loaf of bread is

Accepted Answer

A) $2.00. 
B) $4.50. 
C) $1.25. 
D) $.75. 
E) $.50. 
A) $2.00. 
B) $4.50. 
C) $1.25. 
D) $.75. 
E) $.50.

Question 5

Which of the following statements is true concerning the GDP deflator and the CPI as measures of inflation?

Accepted Answer

A) Only the CPI shows the rise in inflation in the 1960s and the 1970s. 
B) Inflation, as measured by the GDP deflator, is more volatile than inflation as measured by the CPI. 
C) Only the GDP deflator shows the rise in inflation the 1960s and the 1970s. 
D) The CPI and the GDP deflator show similar movements in general inflation. 
E) Only the GDP deflator shows the decline in inflation in the 1980s and the early 1990s. 
A) Only the CPI shows the rise in inflation in the 1960s and the 1970s. 
B) Inflation, as measured by the GDP deflator, is more volatile than inflation as measured by the CPI. 
C) Only the GDP deflator shows the rise in inflation the 1960s and the 1970s. 
D) The CPI and the GDP deflator show similar movements in general inflation. 
E) Only the GDP deflator shows the decline in inflation in the 1980s and the early 1990s.

Question 6

Which of the following statements is true?

Accepted Answer

A) Inventory investment is the only component of investment spending that is not included in business fixed investment. 
B) Residential investment is the only component of investment spending that is not included in business fixed investment. 
C) Investment spending is the same as business fixed investment. 
D) Inventory investment and residential investment are not part of business fixed investment. 
E) Purchases of intermediate goods by businesses are included in business fixed investment. 
A) Inventory investment is the only component of investment spending that is not included in business fixed investment. 
B) Residential investment is the only component of investment spending that is not included in business fixed investment. 
C) Investment spending is the same as business fixed investment. 
D) Inventory investment and residential investment are not part of business fixed investment. 
E) Purchases of intermediate goods by businesses are included in business fixed investment.

Question 7

The measure for GDP is reported in the United States every

Accepted Answer

A) month. 
B) other month. 
C) two weeks. 
D) three months. 
E) six months. 
A) month. 
B) other month. 
C) two weeks. 
D) three months. 
E) six months.

Question 8

Investment is

Accepted Answer

A) the purchase of final goods by business firms. 
B) the purchase of securities by business firms. 
C) the purchase of intermediate goods by business firms. 
D) the purchase of final goods by business firms and government. 
E) the purchase of final goods by the government. 
A) the purchase of final goods by business firms. 
B) the purchase of securities by business firms. 
C) the purchase of intermediate goods by business firms. 
D) the purchase of final goods by business firms and government. 
E) the purchase of final goods by the government.

Question 9

In 2015, consumption was roughly ____ of GDP in the United States.

Accepted Answer

A) 80 percent 
B) 90 percent 
C) 70 percent 
D) 60 percent 
E) 50 percent 
A) 80 percent 
B) 90 percent 
C) 70 percent 
D) 60 percent 
E) 50 percent

Question 10

There is no correlation between the decline in certain forms of pollution over the past 40 years and the increase in real GDP per capita.

Accepted Answer

A) True 
 B)False

Question 11

Expenditure on ____ is spending that is not included in GDP.

Accepted Answer

A) used goods 
B) intermediate goods 
C) financial assets 
D) All of these 
E) None of these 
A) used goods 
B) intermediate goods 
C) financial assets 
D) All of these 
E) None of these

Question 12

A base year is a year when

Accepted Answer

A) real GDP equals 100. 
B) nominal GDP equals 100. 
C) real and nominal GDP are equal to each other. 
D) there is no growth in real GDP. 
E) there is no growth in nominal GDP. 
A) real GDP equals 100. 
B) nominal GDP equals 100. 
C) real and nominal GDP are equal to each other. 
D) there is no growth in real GDP. 
E) there is no growth in nominal GDP.

Question 13

In which spending category would you enter the following transaction? Ford sells a Thunderbird from its inventory to an individual.

Accepted Answer

A) Consumption 
B) Consumption and investment 
C) Investment 
D) Government purchases 
E) Net exports 
A) Consumption 
B) Consumption and investment 
C) Investment 
D) Government purchases 
E) Net exports

Question 14

Why do economists believe that the CPI overstates the rate of inflation? Is this an important problem?

Accepted Answer

The CPI uses a fixed collection of goods

Question 15

For the hypothetical economy described in the table below, what were investment, consumption, and GDP in period 1? And for period 2?

Accepted Answer

Period 1 investment was 10 computers, an

Question 16

Intermediate goods are part of final goods.

Accepted Answer

A) True 
 B)False

Question 17

In the process of calculating the production of the economy of the United States, which of the following must be taken into account?

Accepted Answer

A) The fact that some of the goods that people buy are shipped to the United States from abroad 
B) The fact that some of the goods produced in the economy are shipped to other countries 
C) The fact that some goods are used as inputs into the production of other goods, like hamburgers 
D) All of the above 
E) Only a and b 
A) The fact that some of the goods that people buy are shipped to the United States from abroad 
B) The fact that some of the goods produced in the economy are shipped to other countries 
C) The fact that some goods are used as inputs into the production of other goods, like hamburgers 
D) All of the above 
E) Only a and b

Question 18

Answer the questions below:

Accepted Answer

The answer of Answer the questions below:
  
...

Question 19

Suppose that real GDP grew faster than nominal GDP between year 1 and year 2. What must have happened to prices on average?

Accepted Answer

Prices must have decreased. Since nomina

Question 20

What was the approximate level of GDP production in the United States in 2015?

Accepted Answer

A) $18 trillion 
B) $180 billion 
C) $18 billion 
D) $1,800 million 
E) $1.8 trillion 
A) $18 trillion 
B) $180 billion 
C) $18 billion 
D) $1,800 million 
E) $1.8 trillion

Exam 18: Measuring the Production, Income, and Spending of Nations

Explain how each of the following transactions would affect GDP for the current year. Which spending categories are affected?

In which spending category would you enter the following transaction? A restaurant purchases fresh fish at the local fish market that it plans to sell as one of its nightly specials.

The difference between investment, the purchases of final goods by firms, and depreciation is called net investment.

Exhibit 18-3 -According to the data in Exhibit 18-3, the contribution to GDP from the production of a loaf of bread is

Which of the following statements is true concerning the GDP deflator and the CPI as measures of inflation?

Which of the following statements is true?

The measure for GDP is reported in the United States every

Investment is

In 2015, consumption was roughly ____ of GDP in the United States.

There is no correlation between the decline in certain forms of pollution over the past 40 years and the increase in real GDP per capita.

Expenditure on ____ is spending that is not included in GDP.

A base year is a year when

In which spending category would you enter the following transaction? Ford sells a Thunderbird from its inventory to an individual.

Why do economists believe that the CPI overstates the rate of inflation? Is this an important problem?

For the hypothetical economy described in the table below, what were investment, consumption, and GDP in period 1? And for period 2?

Intermediate goods are part of final goods.

In the process of calculating the production of the economy of the United States, which of the following must be taken into account?

Answer the questions below:

Suppose that real GDP grew faster than nominal GDP between year 1 and year 2. What must have happened to prices on average?

What was the approximate level of GDP production in the United States in 2015?

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters