Question 1

Which of the following items is not a component of the expenditure approach to measuring U.S. GDP?

Accepted Answer

A)  purchases of food made by families 
B)  purchases of U.S.- made movies by Europeans 
C)  social security payments made by the government 
D)  purchases of new homes made by families 
A)  purchases of food made by families 
B)  purchases of U.S.- made movies by Europeans 
C)  social security payments made by the government 
D)  purchases of new homes made by families

Question 2

The fact that prices for similar goods differ across nations complicates comparisons of real GDP across countries.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following transactions in a particular year is included in gross domestic product for that year?

Accepted Answer

A)  The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. 
B)  A car is produced in the previous year and remains in inventory for the entire year under consideration. 
C)  A stay- at- home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform. 
D)  Social Security payments to retirees 
A)  The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. 
B)  A car is produced in the previous year and remains in inventory for the entire year under consideration. 
C)  A stay- at- home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform. 
D)  Social Security payments to retirees

Question 4

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

Accepted Answer

The statement is false. Factors other th

Question 5

If you buy a new water skis and other new equipment for $2,500 and take a week off of your job, where you earn $1,000 a week, to go water skiing. The equipment you purchased was all produced in the United States. You think that the week was worth $4,000. As a result of your vacation, GDP changes by how much?

Accepted Answer

GDP changes by only

Question 6

When calculating the compensation of employees part of GDP,

Accepted Answer

A)  taxes withheld on earnings are not included. 
B)  fringe benefits are not included. 
C)  social security contributions must be included. 
D)  the value of vacation time must be included. 
A)  taxes withheld on earnings are not included. 
B)  fringe benefits are not included. 
C)  social security contributions must be included. 
D)  the value of vacation time must be included.

Question 7

Real GDP is

Accepted Answer

A)  the value of total production when the unemployment rate is 6 percent. 
B)  the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced. 
C)  the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year. 
D)  an increase in the average level of prices. 
A)  the value of total production when the unemployment rate is 6 percent. 
B)  the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced. 
C)  the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year. 
D)  an increase in the average level of prices.

Question 8

In the national income accounts, net interest is the total interest payments received by households on loans made by them minus

Accepted Answer

A)  interest payments made by households to foreign lenders. 
B)  interest received from households' ownership of government bonds. 
C)  interest payments made by households on their own borrowing. 
D)  taxes paid by households on their interest income. 
A)  interest payments made by households to foreign lenders. 
B)  interest received from households' ownership of government bonds. 
C)  interest payments made by households on their own borrowing. 
D)  taxes paid by households on their interest income.

Question 9

Suppose the country of Dingo experienced an economic trough in January 2004. We can conclude that

Accepted Answer

A)  an expansion occurred after January 2004. 
B)  real GDP in Dingo was increasing in January 2004. 
C)  Dingo did not experience a recession in 2003. 
D)  Dingo's potential GDP fell in 2004. 
A)  an expansion occurred after January 2004. 
B)  real GDP in Dingo was increasing in January 2004. 
C)  Dingo did not experience a recession in 2003. 
D)  Dingo's potential GDP fell in 2004.

Question 10

In the national income accounts, government expenditure on goods and services refer to those purchases made by

Accepted Answer

A)  federal and state governments only. 
B)  state and local governments only. 
C)  the federal government only. 
D)  all levels of government. 
A)  federal and state governments only. 
B)  state and local governments only. 
C)  the federal government only. 
D)  all levels of government.

Question 11

What is a recession?

Accepted Answer

A recession is a period of time during w

Question 12

A common definition of a recession is a period of time

Accepted Answer

A)  with no change in the dollar (money) value of economic output. 
B)  with an increase in real economic output from the previous period. 
C)  with no change in real GDP. 
D)  of at least 6 months during which real GDP decreases. 
A)  with no change in the dollar (money) value of economic output. 
B)  with an increase in real economic output from the previous period. 
C)  with no change in real GDP. 
D)  of at least 6 months during which real GDP decreases.

Question 13

"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, in have contributed to Canada's change in real GDP.

Accepted Answer

A)  decreases; exports and investment; unexpected 
B)  decreases; exports and government spending; expected 
C)  increases; consumption and exports; expected 
D)  increases; consumption and investment; unexpected 
A)  decreases; exports and investment; unexpected 
B)  decreases; exports and government spending; expected 
C)  increases; consumption and exports; expected 
D)  increases; consumption and investment; unexpected

Question 14

Net exports is negative if

Accepted Answer

A)  the value of imports exceeds the value of exports. 
B)  too much production occurs in the exporting country during the year. 
C)  the tariff payments are included in the value of imported and exported items. 
D)  the value of exports exceeds the value of imports. 
A)  the value of imports exceeds the value of exports. 
B)  too much production occurs in the exporting country during the year. 
C)  the tariff payments are included in the value of imported and exported items. 
D)  the value of exports exceeds the value of imports.

Question 15

If we compare the U.S. GDP and the Chinese GDP,

Accepted Answer

A)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
B)  real GDP per person is about the same in the two countries. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
A)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
B)  real GDP per person is about the same in the two countries. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences.

Question 16

Which of the following expenditures associated with the production of a new high- performance SUV will be directly included in GDP?

Accepted Answer

A)  the purchase of used welding robots to assemble to vehicles 
B)  the purchase of new machine tools to manufacture the engines 
C)  the sale of bonds to finance the construction of the assembly plant 
D)  the purchase of new tires to be installed on the new vehicles 
A)  the purchase of used welding robots to assemble to vehicles 
B)  the purchase of new machine tools to manufacture the engines 
C)  the sale of bonds to finance the construction of the assembly plant 
D)  the purchase of new tires to be installed on the new vehicles

Question 17

The circular flow of income shows that

Accepted Answer

A)  governments purchase goods and services. 
B)  firms generally are the demanders in the goods markets and suppliers in the factor markets. 
C)  households transact only in the goods market. 
D)  None of the above answers is correct. 
A)  governments purchase goods and services. 
B)  firms generally are the demanders in the goods markets and suppliers in the factor markets. 
C)  households transact only in the goods market. 
D)  None of the above answers is correct.

Question 18

Using the data in the above table, net private domestic investment equals

Accepted Answer

A)  $260. 
B)  $510. 
C)  $210. 
D)  some amount that cannot be determined without more information. 
A)  $260. 
B)  $510. 
C)  $210. 
D)  some amount that cannot be determined without more information.

Question 19

GDP can be computed as the sum of

Accepted Answer

A)  the total expenditures of consumers and business over a period of time. 
B)  the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time. 
C)  the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time. 
D)  all sales that have taken place in an economy over a period of time. 
A)  the total expenditures of consumers and business over a period of time. 
B)  the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time. 
C)  the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time. 
D)  all sales that have taken place in an economy over a period of time.

Question 20

The circular flow diagram shows

Accepted Answer

A)  how nominal GDP is distinct from real GDP. 
B)  the effects of inflation in a simple economy. 
C)  how the prices of factors are determined. 
D)  the flows between different sectors of the economy. 
A)  how nominal GDP is distinct from real GDP. 
B)  the effects of inflation in a simple economy. 
C)  how the prices of factors are determined. 
D)  the flows between different sectors of the economy.

Which of the following items is not a component of the expenditure approach to measuring U.S. GDP?

The fact that prices for similar goods differ across nations complicates comparisons of real GDP across countries.

Which one of the following transactions in a particular year is included in gross domestic product for that year?

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

When calculating the compensation of employees part of GDP,

Real GDP is

In the national income accounts, net interest is the total interest payments received by households on loans made by them minus

Suppose the country of Dingo experienced an economic trough in January 2004. We can conclude that

In the national income accounts, government expenditure on goods and services refer to those purchases made by

What is a recession?

A common definition of a recession is a period of time

Net exports is negative if

If we compare the U.S. GDP and the Chinese GDP,

Which of the following expenditures associated with the production of a new high- performance SUV will be directly included in GDP?

The circular flow of income shows that

Using the data in the above table, net private domestic investment equals

GDP can be computed as the sum of

The circular flow diagram shows

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

Which of the following items is not a component of the expenditure approach to measuring U.S. GDP?

The fact that prices for similar goods differ across nations complicates comparisons of real GDP across countries.

Which one of the following transactions in a particular year is included in gross domestic product for that year?

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

When calculating the compensation of employees part of GDP,

Real GDP is

In the national income accounts, net interest is the total interest payments received by households on loans made by them minus

Suppose the country of Dingo experienced an economic trough in January 2004. We can conclude that

In the national income accounts, government expenditure on goods and services refer to those purchases made by

What is a recession?

A common definition of a recession is a period of time

Net exports is negative if

If we compare the U.S. GDP and the Chinese GDP,

Which of the following expenditures associated with the production of a new high- performance SUV will be directly included in GDP?

The circular flow of income shows that

Using the data in the above table, net private domestic investment equals

GDP can be computed as the sum of

The circular flow diagram shows

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