Question 1

The five categories of income used in the income approach to the measurement of GDP are

Accepted Answer

A)  employee compensation, net interest, rental income, corporate profits, and proprietor's income. 
B)  consumption, saving, rental income, corporate profits, and investment. 
C)  employee compensation, consumption, rental income, corporate profits, and proprietor's income. 
D)  employee compensation, saving, rental income, corporate profits, and investment. 
A)  employee compensation, net interest, rental income, corporate profits, and proprietor's income. 
B)  consumption, saving, rental income, corporate profits, and investment. 
C)  employee compensation, consumption, rental income, corporate profits, and proprietor's income. 
D)  employee compensation, saving, rental income, corporate profits, and investment.

Question 2

GDP does not directly include intermediate goods because

Accepted Answer

A)  intermediate goods are not valuable. 
B)  that would count the intermediate goods twice. 
C)  intermediate goods are not useful to consumers. 
D)  that would understate the true size of GDP. 
A)  intermediate goods are not valuable. 
B)  that would count the intermediate goods twice. 
C)  intermediate goods are not useful to consumers. 
D)  that would understate the true size of GDP.

Question 3

GDP equals

Accepted Answer

A)  the value of the aggregate production in a country during a given time period. 
B)  aggregate income. 
C)  aggregate expenditure. 
D)  all of the above 
A)  the value of the aggregate production in a country during a given time period. 
B)  aggregate income. 
C)  aggregate expenditure. 
D)  all of the above

Question 4

The data show Argentina's GDP (using purchasing power parity) in billions of dollars.   The data show that

Accepted Answer

A)  GDP per person more than doubled between 1990 and 2006. 
B)  Argentina's economy was in a recession in 2001 and 2002. 
C)  Argentina's economy reached a peak in 1996. 
D)  Argentina's economy was in a recession from 2004 through 2006. 
A)  GDP per person more than doubled between 1990 and 2006. 
B)  Argentina's economy was in a recession in 2001 and 2002. 
C)  Argentina's economy reached a peak in 1996. 
D)  Argentina's economy was in a recession from 2004 through 2006.

Question 5

The income approach measures GDP by adding together compensation of employees, proprietors' income, .

Accepted Answer

A)  net interest, rental income, and corporate profits 
B)  net saving, investment income, and profits 
C)  net investment, saving, and farmers' income 
D)  net investment, rental income, and corporate profits 
A)  net interest, rental income, and corporate profits 
B)  net saving, investment income, and profits 
C)  net investment, saving, and farmers' income 
D)  net investment, rental income, and corporate profits

Question 6

What is the difference between real and nominal GDP and why do economists make this distinction?

Accepted Answer

Real GDP is a measure of the final goods

Question 7

-Using the information in the table above, calculate the value of GDP.

Accepted Answer

A)  $145 million 
B)  $140 million 
C)  $185 million 
D)  $195 million 
A)  $145 million 
B)  $140 million 
C)  $185 million 
D)  $195 million

Question 8

Real GDP

Accepted Answer

A)  can be called potential GDP when it is adjusted for price changes. 
B)  grows at a constant 3 to 4 percent per year. 
C)  fluctuates around potential GDP. 
D)  fluctuates from year to year but is always below potential GDP. 
A)  can be called potential GDP when it is adjusted for price changes. 
B)  grows at a constant 3 to 4 percent per year. 
C)  fluctuates around potential GDP. 
D)  fluctuates from year to year but is always below potential GDP.

Question 9

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

Accepted Answer

A) True 
 B)False

Question 10

-The above table gives data for a hypothetical nation. Gross domestic product is

Accepted Answer

A)  $4,054 billion. 
B)  $4,079 billion. 
C)  $4,339 billion. 
D)  $4,049 billion. 
A)  $4,054 billion. 
B)  $4,079 billion. 
C)  $4,339 billion. 
D)  $4,049 billion.

Question 11

Two reasons why valuing goods at their market prices is different than valuing them at their factor costs include

Accepted Answer

A)  exports and imports. 
B)  personal taxes and corporate taxes. 
C)  depreciation and investment. 
D)  indirect taxes and subsidies. 
A)  exports and imports. 
B)  personal taxes and corporate taxes. 
C)  depreciation and investment. 
D)  indirect taxes and subsidies.

Question 12

Which of the following statements is true?

Accepted Answer

A)  Potential GDP fluctuates around real GDP. 
B)  Potential GDP is the same as real GDP. 
C)  Real GDP fluctuates around potential GDP. 
D)  When all of the economy's resources are fully employed, the value of production is called real GDP. 
A)  Potential GDP fluctuates around real GDP. 
B)  Potential GDP is the same as real GDP. 
C)  Real GDP fluctuates around potential GDP. 
D)  When all of the economy's resources are fully employed, the value of production is called real GDP.

Question 13

List the components of the expenditure approach to measuring GDP.

Accepted Answer

The expenditure approach measures GDP by

Question 14

Neither intermediate goods nor used goods are included in GDP. Explain why these expenditures are not included in GDP.

Accepted Answer

Intermediate goods and used goods are no

Question 15

In the nation of Nirvana, depreciation is $22 billion, GDP is $260.4 billion, and national income is
$215.2 billion. Net domestic product is

Accepted Answer

A)  $445.2 billion. 
B)  $215.2 billion. 
C)  smaller than national income. 
D)  $238.4 billion. 
A)  $445.2 billion. 
B)  $215.2 billion. 
C)  smaller than national income. 
D)  $238.4 billion.

Question 16

Which of the following is TRUE regarding the chain- weighted output index method?
I. It is the method used to measure the growth rate of nominal GDP.
II. It uses data from the current year and from the previous year.
III. It is a method of measuring the growth rate of real GDP.

Accepted Answer

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

Question 17

It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1 trillion while Brazil's was $1.31 trillion. These data show that

Accepted Answer

A)  Brazil's GDP per person was $5300 in 2007. 
B)  Mexico's GDP per person was lower than was Brazil's GDP per person in 2007. 
C)  Brazil had a healthier economy than did Mexico. 
D)  Mexico's GDP per person was $9090 in 2007. 
A)  Brazil's GDP per person was $5300 in 2007. 
B)  Mexico's GDP per person was lower than was Brazil's GDP per person in 2007. 
C)  Brazil had a healthier economy than did Mexico. 
D)  Mexico's GDP per person was $9090 in 2007.

Question 18

-Using the data in the table above, gross domestic product equals

Accepted Answer

A)  $2,150. 
B)  $2,400. 
C)  $1,940. 
D)  $1,920. 
A)  $2,150. 
B)  $2,400. 
C)  $1,940. 
D)  $1,920.

Question 19

-In the above figure, flow B represents .

Accepted Answer

A)  household purchases of goods and services 
B)  firms' payments for labor services 
C)  household income 
D)  household borrowing 
A)  household purchases of goods and services 
B)  firms' payments for labor services 
C)  household income 
D)  household borrowing

Question 20

Define and distinguish between final goods and intermediate goods.

Accepted Answer

Final goods are those goods that are pur

The five categories of income used in the income approach to the measurement of GDP are

GDP does not directly include intermediate goods because

GDP equals

The data show Argentina's GDP (using purchasing power parity) in billions of dollars. The data show that

The income approach measures GDP by adding together compensation of employees, proprietors' income, .

What is the difference between real and nominal GDP and why do economists make this distinction?

-Using the information in the table above, calculate the value of GDP.

Real GDP

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

-The above table gives data for a hypothetical nation. Gross domestic product is

Two reasons why valuing goods at their market prices is different than valuing them at their factor costs include

Which of the following statements is true?

List the components of the expenditure approach to measuring GDP.

Neither intermediate goods nor used goods are included in GDP. Explain why these expenditures are not included in GDP.

In the nation of Nirvana, depreciation is $22 billion, GDP is $260.4 billion, and national income is $215.2 billion. Net domestic product is

Which of the following is TRUE regarding the chain- weighted output index method? I. It is the method used to measure the growth rate of nominal GDP. II. It uses data from the current year and from the previous year. III. It is a method of measuring the growth rate of real GDP.

It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1 trillion while Brazil's was $1.31 trillion. These data show that

-Using the data in the table above, gross domestic product equals

-In the above figure, flow B represents .

Define and distinguish between final goods and intermediate goods.

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 five categories of income used in the income approach to the measurement of GDP are

GDP does not directly include intermediate goods because

GDP equals

The data show Argentina's GDP (using purchasing power parity) in billions of dollars. The data show that

The income approach measures GDP by adding together compensation of employees, proprietors' income, .

What is the difference between real and nominal GDP and why do economists make this distinction?

-Using the information in the table above, calculate the value of GDP.

Real GDP

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

-The above table gives data for a hypothetical nation. Gross domestic product is

Two reasons why valuing goods at their market prices is different than valuing them at their factor costs include

Which of the following statements is true?

List the components of the expenditure approach to measuring GDP.

Neither intermediate goods nor used goods are included in GDP. Explain why these expenditures are not included in GDP.

In the nation of Nirvana, depreciation is $22 billion, GDP is $260.4 billion, and national income is $215.2 billion. Net domestic product is

Which of the following is TRUE regarding the chain- weighted output index method? I. It is the method used to measure the growth rate of nominal GDP. II. It uses data from the current year and from the previous year. III. It is a method of measuring the growth rate of real GDP.

It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1 trillion while Brazil's was $1.31 trillion. These data show that

-Using the data in the table above, gross domestic product equals

-In the above figure, flow B represents .

Define and distinguish between final goods and intermediate goods.

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