Question 1

The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors' income is

Accepted Answer

A)  gross domestic income. 
B)  net domestic income at factor cost. 
C)  net domestic product. 
D)  gross domestic product. 
A)  gross domestic income. 
B)  net domestic income at factor cost. 
C)  net domestic product. 
D)  gross domestic product.

Question 2

GDP counts only final goods and services because this

Accepted Answer

A)  method avoids including any goods that are produced this year and sold next year. 
B)  method avoids double counting of goods going through several stages of production. 
C)  method avoids understating the value of GDP produced during a given year. 
D)  amount can be more easily determined in the marketplace. 
A)  method avoids including any goods that are produced this year and sold next year. 
B)  method avoids double counting of goods going through several stages of production. 
C)  method avoids understating the value of GDP produced during a given year. 
D)  amount can be more easily determined in the marketplace.

Question 3

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP. One of these adjustments is adding depreciation. What is depreciation and why must it be added?

Accepted Answer

Depreciation is the wear and tear of cap

Question 4

-From the data in the above table, GDP equals

Accepted Answer

A)  $1,360. 
B)  $1,290. 
C)  $1,280. 
D)  $1,120. 
A)  $1,360. 
B)  $1,290. 
C)  $1,280. 
D)  $1,120.

Question 5

All economic activity in the underground economy represents the production of illegal goods and services.

Accepted Answer

A) True 
 B)False

Question 6

Gross investment equals

Accepted Answer

A)  net investment - depreciation + change in inventories. 
B)  depreciation + change in inventories. 
C)  net investment + depreciation. 
D)  net investment + change in inventories. 
A)  net investment - depreciation + change in inventories. 
B)  depreciation + change in inventories. 
C)  net investment + depreciation. 
D)  net investment + change in inventories.

Question 7

Which of the following is included in the category of corporate profits when measuring GDP?
I. Profits paid as dividends.
II. Undistributed profits.
III. Income received by owners and operators of businesses.

Accepted Answer

A)  I, II and III 
B)  I only 
C)  I and II 
D)  I and III 
A)  I, II and III 
B)  I only 
C)  I and II 
D)  I and III

Question 8

To measure GDP using the expenditure approach you must collect data on

Accepted Answer

A)  inflation. 
B)  wages. 
C)  saving. 
D)  exports. 
A)  inflation. 
B)  wages. 
C)  saving. 
D)  exports.

Question 9

Which of the following relationships is correct?

Accepted Answer

A)  Net Investment = Gross Investment + Depreciation 
B)  Depreciation = Gross Investment - Capital Consumption 
C)  Gross Investment = Net Investment + Depreciation 
D)  Capital Consumption = Net Investment - Depreciation 
A)  Net Investment = Gross Investment + Depreciation 
B)  Depreciation = Gross Investment - Capital Consumption 
C)  Gross Investment = Net Investment + Depreciation 
D)  Capital Consumption = Net Investment - Depreciation

Question 10

The income approach to measuring GDP sums together

Accepted Answer

A)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracts subsidies paid by the government. 
B)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid, and depreciation. 
C)  the sales of each firm in the economy. 
D)  the costs of each firm in the economy and then subtracts indirect business taxes and depreciation. 
A)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracts subsidies paid by the government. 
B)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid, and depreciation. 
C)  the sales of each firm in the economy. 
D)  the costs of each firm in the economy and then subtracts indirect business taxes and depreciation.

Question 11

The circular flow shows that the household sector earns its income by

Accepted Answer

A)  selling goods and services. 
B)  selling factors of production. 
C)  buying factors of production. 
D)  selling financial assets. 
A)  selling goods and services. 
B)  selling factors of production. 
C)  buying factors of production. 
D)  selling financial assets.

Question 12

Of the following, which is correct?

Accepted Answer

A)  Nominal GDP is not affected by changes in prices of goods and services. 
B)  Real GDP changes only when the prices of goods and services really change. 
C)  Nominal GDP does not change when the production of goods and services increases. 
D)  Nominal GDP increases when the prices of goods and services increase. 
A)  Nominal GDP is not affected by changes in prices of goods and services. 
B)  Real GDP changes only when the prices of goods and services really change. 
C)  Nominal GDP does not change when the production of goods and services increases. 
D)  Nominal GDP increases when the prices of goods and services increase.

Question 13

List and explain the two phases and two turning points of the business cycle.

Accepted Answer

The economy is defined as being an expan

Question 14

Which of the following is NOT a component of the incomes approach to GDP?

Accepted Answer

A)  proprietors' income 
B)  corporate profits 
C)  wages and salaries 
D)  net exports 
A)  proprietors' income 
B)  corporate profits 
C)  wages and salaries 
D)  net exports

Question 15

What is "underground production"? Is it included in GDP?

Accepted Answer

Underground production is the production

Question 16

An increase in exports of goods or services with no change in imports of goods or services

Accepted Answer

A)  has no effect on GDP. 
B)  increases GDP. 
C)  may increase or decrease GDP depending on whether it is the export of goods or the export of services that increased. 
D)  decreases GDP. 
A)  has no effect on GDP. 
B)  increases GDP. 
C)  may increase or decrease GDP depending on whether it is the export of goods or the export of services that increased. 
D)  decreases GDP.

Question 17

A loaf of bread purchased by one of your instructors would be best described as

Accepted Answer

A)  a financial asset. 
B)  a used good. 
C)  a final good. 
D)  an intermediate good. 
A)  a financial asset. 
B)  a used good. 
C)  a final good. 
D)  an intermediate good.

Question 18

The difference between gross investment and net investment is

Accepted Answer

A)  the capital stock. 
B)  depreciation. 
C)  the level of saving. 
D)  the real interest rate. 
A)  the capital stock. 
B)  depreciation. 
C)  the level of saving. 
D)  the real interest rate.

Question 19

Which of the following is a component of the incomes approach to GDP?

Accepted Answer

A)  government expenditure on goods and services 
B)  investment 
C)  consumption expenditure 
D)  wages and salaries 
A)  government expenditure on goods and services 
B)  investment 
C)  consumption expenditure 
D)  wages and salaries

Question 20

The chain- weighted output index method of calculating real GDP compares

Accepted Answer

A)  compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
B)  prices at different points in time using a sample of goods that is representative of goods purchased by households. 
C)  quantities produced in different years with the prices that prevailed during the year in which the output was produced. 
D)  quantities produced in different years using prices from a year chosen as a reference period. 
A)  compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
B)  prices at different points in time using a sample of goods that is representative of goods purchased by households. 
C)  quantities produced in different years with the prices that prevailed during the year in which the output was produced. 
D)  quantities produced in different years using prices from a year chosen as a reference period.

The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors' income is

GDP counts only final goods and services because this

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP. One of these adjustments is adding depreciation. What is depreciation and why must it be added?

-From the data in the above table, GDP equals

All economic activity in the underground economy represents the production of illegal goods and services.

Gross investment equals

Which of the following is included in the category of corporate profits when measuring GDP? I. Profits paid as dividends. II. Undistributed profits. III. Income received by owners and operators of businesses.

To measure GDP using the expenditure approach you must collect data on

Which of the following relationships is correct?

The income approach to measuring GDP sums together

The circular flow shows that the household sector earns its income by

Of the following, which is correct?

List and explain the two phases and two turning points of the business cycle.

Which of the following is NOT a component of the incomes approach to GDP?

What is "underground production"? Is it included in GDP?

An increase in exports of goods or services with no change in imports of goods or services

A loaf of bread purchased by one of your instructors would be best described as

The difference between gross investment and net investment is

Which of the following is a component of the incomes approach to GDP?

The chain- weighted output index method of calculating real GDP compares

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

The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors' income is

GDP counts only final goods and services because this

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP. One of these adjustments is adding depreciation. What is depreciation and why must it be added?

-From the data in the above table, GDP equals

All economic activity in the underground economy represents the production of illegal goods and services.

Gross investment equals

Which of the following is included in the category of corporate profits when measuring GDP? I. Profits paid as dividends. II. Undistributed profits. III. Income received by owners and operators of businesses.

To measure GDP using the expenditure approach you must collect data on

Which of the following relationships is correct?

The income approach to measuring GDP sums together

The circular flow shows that the household sector earns its income by

Of the following, which is correct?

List and explain the two phases and two turning points of the business cycle.

Which of the following is NOT a component of the incomes approach to GDP?

What is "underground production"? Is it included in GDP?

An increase in exports of goods or services with no change in imports of goods or services

A loaf of bread purchased by one of your instructors would be best described as

The difference between gross investment and net investment is

Which of the following is a component of the incomes approach to GDP?

The chain- weighted output index method of calculating real GDP compares

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