Question 1

The base period is the time period used for comparative analysis for the calculation of real GDP.

Accepted Answer

A) True 
 B)False

Question 2

An economy's production possibilities are most likely to expand if

Accepted Answer

A) Net investment is negative. 
B) Net investment is zero. 
C) Gross investment is greater than depreciation. 
D) Depreciation is greater than gross investment. 
A) Net investment is negative. 
B) Net investment is zero. 
C) Gross investment is greater than depreciation. 
D) Depreciation is greater than gross investment.

Question 3

One In the News article titled "$2 Trillion in "Underground" Economy" reports that the underground economy is roughly 12 percent of total output.This is an example of

Accepted Answer

A) An intermediate good. 
B) Unreported Income. 
C) Market activity. 
D) Value added. 
A) An intermediate good. 
B) Unreported Income. 
C) Market activity. 
D) Value added.

Question 4

A nation's production possibilities curve should,ceteris paribus,shift

Accepted Answer

A) Inward if gross investment exceeds depreciation. 
B) Inward if net investment is zero. 
C) Outward if net investment is positive. 
D) Outward if gross investment is positive. 
A) Inward if gross investment exceeds depreciation. 
B) Inward if net investment is zero. 
C) Outward if net investment is positive. 
D) Outward if gross investment is positive.

Question 5

A nation's capital stock will decline,ceteris paribus,in all of the following situations except

Accepted Answer

A) The population increases faster than the capital stock. 
B) Net investment is negative. 
C) Depreciation exceeds gross investment. 
D) None of the choices are correct. 
A) The population increases faster than the capital stock. 
B) Net investment is negative. 
C) Depreciation exceeds gross investment. 
D) None of the choices are correct.

Question 6

Which of the following expenditures are included in consumption?

Accepted Answer

A) Police services. 
B) Personal medical services. 
C) Public highways. 
D) Public parks. 
A) Police services. 
B) Personal medical services. 
C) Public highways. 
D) Public parks.

Question 7

In national income accounting,the two uses of disposable income are

Accepted Answer

A) Saving and consumption. 
B) Saving and investment. 
C) Consumption and investment. 
D) Personal income and personal taxes. 
A) Saving and consumption. 
B) Saving and investment. 
C) Consumption and investment. 
D) Personal income and personal taxes.

Question 8

If a nation has a population of 100 million,a labor force of 60 million,and GDP of $200 billion,then GDP per capita must be

Accepted Answer

A) $2,000.00. 
B) $3,333.33. 
C) $200.00. 
D) $333.33. 
A) $2,000.00. 
B) $3,333.33. 
C) $200.00. 
D) $333.33.

Question 9

When an individual makes repairs to her own home instead of hiring a company to make the repairs,the activity is

Accepted Answer

A) Included in GDP because it represents production. 
B) Productive but excluded from GDP because it is a nonmarket activity. 
C) Excluded from GDP because it is an intermediate good. 
D) Included in GDP but not included in GNP. 
A) Included in GDP because it represents production. 
B) Productive but excluded from GDP because it is a nonmarket activity. 
C) Excluded from GDP because it is an intermediate good. 
D) Included in GDP but not included in GNP.

Question 10

To avoid counting the same output more than once,the calculation of GDP includes

Accepted Answer

A) Intermediate goods plus final goods. 
B) Only the value of final goods. 
C) The value added at each stage of production plus intermediate goods. 
D) Only the output produced by U.S.factors of production. 
A) Intermediate goods plus final goods. 
B) Only the value of final goods. 
C) The value added at each stage of production plus intermediate goods. 
D) Only the output produced by U.S.factors of production.

Question 11

Savings equal the difference between personal income and consumption.

Accepted Answer

A) True 
 B)False

Question 12

Businesses return purchasing power to the circular flow in the form of

Accepted Answer

A) Retained earnings. 
B) Depreciation. 
C) Business investment. 
D) Profit. 
A) Retained earnings. 
B) Depreciation. 
C) Business investment. 
D) Profit.

Exam 5: National Income Accounting

The base period is the time period used for comparative analysis for the calculation of real GDP.

An economy's production possibilities are most likely to expand if

One In the News article titled "$2 Trillion in "Underground" Economy" reports that the underground economy is roughly 12 percent of total output.This is an example of

A nation's production possibilities curve should,ceteris paribus,shift

A nation's capital stock will decline,ceteris paribus,in all of the following situations except

Which of the following expenditures are included in consumption?

In national income accounting,the two uses of disposable income are

If a nation has a population of 100 million,a labor force of 60 million,and GDP of $200 billion,then GDP per capita must be

When an individual makes repairs to her own home instead of hiring a company to make the repairs,the activity is

To avoid counting the same output more than once,the calculation of GDP includes

Savings equal the difference between personal income and consumption.

Businesses return purchasing power to the circular flow in the form of

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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