Question 1

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

Accepted Answer

U.S. GDP includes all production in the

Question 2

Gross private domestic investment is a component of which approach to measuring GDP?

Accepted Answer

A)  incomes approach 
B)  linking approach 
C)  output approach 
D)  expenditure approach 
A)  incomes approach 
B)  linking approach 
C)  output approach 
D)  expenditure approach

Question 3

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, has occurred.

Accepted Answer

A)  net investment 
B)  replacement investment 
C)  depreciation 
D)  gross investment 
A)  net investment 
B)  replacement investment 
C)  depreciation 
D)  gross investment

Question 4

Gross domestic product can be calculated

Accepted Answer

A)  by adding up the personal consumption of all members of the society. 
B)  either by valuing the nation's output of goods and services or by valuing the income generated in the production process. 
C)  by adding up the income tax returns of all members of the society. 
D)  by adding up the value of all intermediate goods used in the economy. 
A)  by adding up the personal consumption of all members of the society. 
B)  either by valuing the nation's output of goods and services or by valuing the income generated in the production process. 
C)  by adding up the income tax returns of all members of the society. 
D)  by adding up the value of all intermediate goods used in the economy.

Question 5

"As the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be China's ability to plough on regardless of double- digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent i each of the last two months".
Beijing's Burden, FT.com, by Geoff Dyer, Sept. 23,
-According to the article, the best description of Canada's position in the business cycle is

Accepted Answer

A)  at a trough 
B)  in an expansion 
C)  in a recession 
D)  at a peak 
A)  at a trough 
B)  in an expansion 
C)  in a recession 
D)  at a peak

Question 6

In the circular flow diagram, aggregate expenditure includes the sum of

Accepted Answer

A)  income and saving. 
B)  consumption, investment, and saving. 
C)  consumption and investment. 
D)  saving and investment. 
A)  income and saving. 
B)  consumption, investment, and saving. 
C)  consumption and investment. 
D)  saving and investment.

Question 7

In 2009, Ozzie purchased a 1999 Ford Escort from his neighbor for his son, purchased a 1999 "one owner" Camry from Larchmont Toyota for his wife, bought a 2009 new Ford for himself, and sold his 1993 Dodge Caravan to his teenage nephew. Which, if any, of these transactions will be included in GDP in 2009?

Accepted Answer

A)  all four transactions 
B)  the purchase of the Ford and the Caravan 
C)  only the purchase of the Ford 
D)  all three purchases but not the sale 
A)  all four transactions 
B)  the purchase of the Ford and the Caravan 
C)  only the purchase of the Ford 
D)  all three purchases but not the sale

Question 8

Comparing gross domestic product and net domestic product we see that

Accepted Answer

A)  net domestic product is smaller than gross domestic product. 
B)  gross domestic product is smaller than net domestic product. 
C)  there is no consistent relationship. 
D)  they are equal in the United States. 
A)  net domestic product is smaller than gross domestic product. 
B)  gross domestic product is smaller than net domestic product. 
C)  there is no consistent relationship. 
D)  they are equal in the United States.

Question 9

-Using the data in the above table, what is the value of net exports?

Accepted Answer

A)  $181 billion 
B)  - $181 billion 
C)  $957 billion 
D)  - $957 billion 
A)  $181 billion 
B)  - $181 billion 
C)  $957 billion 
D)  - $957 billion

Question 10

The productivity growth slowdown refers to the

Accepted Answer

A)  years during the 1990s. 
B)  years following the 1930s depression. 
C)  period during the 1970s and for some years afterwards. 
D)  situation in foreign nations but not in the United States. 
A)  years during the 1990s. 
B)  years following the 1930s depression. 
C)  period during the 1970s and for some years afterwards. 
D)  situation in foreign nations but not in the United States.

Question 11

Which of the following is NOT part of the expenditure approach to measuring GDP?

Accepted Answer

A)  gross private domestic investment 
B)  net interest 
C)  personal consumption expenditures 
D)  net exports of goods and services 
A)  gross private domestic investment 
B)  net interest 
C)  personal consumption expenditures 
D)  net exports of goods and services

Question 12

In the expenditure approach to GDP, the largest component is

Accepted Answer

A)  net exports. 
B)  personal consumption expenditures. 
C)  gross private domestic investment. 
D)  government expenditure on goods and services. 
A)  net exports. 
B)  personal consumption expenditures. 
C)  gross private domestic investment. 
D)  government expenditure on goods and services.

Question 13

Use the information in the table above to calculate the value of net exports.

Accepted Answer

A)  $30 million 
B)  $0 
C)  $10 million 
D)  - $10 million 
A)  $30 million 
B)  $0 
C)  $10 million 
D)  - $10 million

Question 14

In any year, real GDP

Accepted Answer

A)  will always be greater than potential GDP because of the tendency of nations to incur inflation. 
B)  always equals potential GDP. 
C)  might be greater or less than potential GDP. 
D)  must always be less than potential GDP. 
A)  will always be greater than potential GDP because of the tendency of nations to incur inflation. 
B)  always equals potential GDP. 
C)  might be greater or less than potential GDP. 
D)  must always be less than potential GDP.

Question 15

Transfer payments are not part of government expenditure on goods and services because transfer payments

Accepted Answer

A)  are not always spent on goods produced in the U.S. 
B)  are not predictable given the nature of their appropriation and allocation. 
C)  do not represent the purchase of a final good or service. 
D)  The premise of the question is incorrect because transfer payments are part of government purchases of goods and services. 
A)  are not always spent on goods produced in the U.S. 
B)  are not predictable given the nature of their appropriation and allocation. 
C)  do not represent the purchase of a final good or service. 
D)  The premise of the question is incorrect because transfer payments are part of government purchases of goods and services.

Question 16

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

Accepted Answer

A) True 
 B)False

Question 17

"Life expectancy is exceptionally high in Japan. Scores for political freedom and civil liberties approach those of peer countrie Europe...equality of opportunity is extremely weak. The country also possesses one of the longer working weeks." Japan's G estimated to be $4.2 trillion (purchasing power parity) and the population was 127.4 million.
"Driven by its attractive climate, Brazil performs substantially better on Life Satisfaction than Material Wealth. High international demand for Brazil's commodities and raw materials has produced a sustained economic expansion since 2004, which in turn has led to job creation, wage growth and relatively low inflation. Brazilians report that they control their own lives to a substantial degree." Brazil's GDP was estimated to be $1.7 trillion (purchasing power parity) and 190 million in 2006
-According to the information, Japan's real GDP per person

Accepted Answer

A)  cannot be expected to change much given the other factors affecting GDP growth including political freedom and life expectancy. 
B)  is lower than Brazil's, but its real GDP is higher which makes standard of living higher in Japan. 
C)  is $33,000. 
D)  is higher than Brazil's and therefore we can definitely conclude that economic well- being is higher in Japan. 
A)  cannot be expected to change much given the other factors affecting GDP growth including political freedom and life expectancy. 
B)  is lower than Brazil's, but its real GDP is higher which makes standard of living higher in Japan. 
C)  is $33,000. 
D)  is higher than Brazil's and therefore we can definitely conclude that economic well- being is higher in Japan.

Question 18

-The above table shows some (but not all) national income accounting data for a hypothetical country. According to these data, the value of GDP is _ _ billion.

Accepted Answer

A)  $2100 
B)  $2050 
C)  $2000 
D)  $1850 
A)  $2100 
B)  $2050 
C)  $2000 
D)  $1850

Question 19

The circular flow shows that

Accepted Answer

A)  GDP equals aggregate income. 
B)  aggregate expenditure is less than aggregate income. 
C)  aggregate production equals aggregate expenditure. 
D)  Both answers A and C are correct. 
A)  GDP equals aggregate income. 
B)  aggregate expenditure is less than aggregate income. 
C)  aggregate production equals aggregate expenditure. 
D)  Both answers A and C are correct.

Question 20

The following data show Uruguay's GDP using purchasing power parity in billions of dollars.

Accepted Answer

A)  Uruguay's standard of living increased steadily between 2000 and 2008. 
B)  Uruguay's economy entered a recession in 2005. 
C)  potential GDP more than doubled between 2000 and 2008. 
D)  Uruguay's economy reached a trough in 2002. 
A)  Uruguay's standard of living increased steadily between 2000 and 2008. 
B)  Uruguay's economy entered a recession in 2005. 
C)  potential GDP more than doubled between 2000 and 2008. 
D)  Uruguay's economy reached a trough in 2002.

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

Gross private domestic investment is a component of which approach to measuring GDP?

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, has occurred.

Gross domestic product can be calculated

In the circular flow diagram, aggregate expenditure includes the sum of

Comparing gross domestic product and net domestic product we see that

-Using the data in the above table, what is the value of net exports?

The productivity growth slowdown refers to the

Which of the following is NOT part of the expenditure approach to measuring GDP?

In the expenditure approach to GDP, the largest component is

Use the information in the table above to calculate the value of net exports.

In any year, real GDP

Transfer payments are not part of government expenditure on goods and services because transfer payments

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

-The above table shows some (but not all) national income accounting data for a hypothetical country. According to these data, the value of GDP is _ _ billion.

The circular flow shows that

The following data show Uruguay's GDP using purchasing power parity in billions of dollars.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring Gdp and Economic Growth

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

Gross private domestic investment is a component of which approach to measuring GDP?

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, has occurred.

Gross domestic product can be calculated

In the circular flow diagram, aggregate expenditure includes the sum of

Comparing gross domestic product and net domestic product we see that

-Using the data in the above table, what is the value of net exports?

The productivity growth slowdown refers to the

Which of the following is NOT part of the expenditure approach to measuring GDP?

In the expenditure approach to GDP, the largest component is

Use the information in the table above to calculate the value of net exports.

In any year, real GDP

Transfer payments are not part of government expenditure on goods and services because transfer payments

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

-The above table shows some (but not all) national income accounting data for a hypothetical country. According to these data, the value of GDP is _ _ billion.

The circular flow shows that

The following data show Uruguay's GDP using purchasing power parity in billions of dollars.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters