Question 1

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and __________.

Accepted Answer

A)  net taxes 
B)  government expenditures on goods and services 
C)  saving 
D)  profits 
A)  net taxes 
B)  government expenditures on goods and services 
C)  saving 
D)  profits

Question 2

Real GDP is

Accepted Answer

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

Question 3

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 sale of bonds to finance the construction of the assembly plant 
C)  the purchase of new machine tools to manufacture the engines 
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 sale of bonds to finance the construction of the assembly plant 
C)  the purchase of new machine tools to manufacture the engines 
D)  the purchase of new tires to be installed on the new vehicles

Question 4

$\begin{array}{|l|l|}
\hline \text { Government purchas es of goods and services } & \$ 240 \
\hline \text { Depreciation } & 240 \
\hline \text { Gros private domestic investment } & 400 \
\hline \text { Personal income taxes } & 140 \\hline \text { Net taxes } & 120 \
\hline \text { Net exports of goods and services } & 80 \
\hline \text { Personal consumption expenditures } & 640 \
\hline \text { Net interest } & 100 \
\hline
\end{array}$
-The income approach to measuring GDP sums together

Accepted Answer

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

Question 5

The following data are estimates describing Ireland?s economy in 2006 and 2007 in millions of euros, in constant prices): $$\begin{array} { l l l } 
& \mathbf { 2 0 0 6 } & \mathbf { 2 0 0 7 } \
\text { Consumption } & 84,000 & 89,000 \
\text { Government expenditure } & 24,000 & 26,000 \
\text { Investment } & 48,000 & 48,000 \
\text { Exports } & 142,000 & 151,000 \
\text { Imports } & 123,000 & 128,000 \
\text { Subsidies } & 1,800 & 1,900 \
\text { Taxes } & 500 & 500
\end{array}$$ In 2007, Ireland?s net exports was _________million euros.

Accepted Answer

A)  -23,000 
B)  149,100 
C)  23,000 
D)  279,000 
A)  -23,000 
B)  149,100 
C)  23,000 
D)  279,000

Question 6

An expansion

Accepted Answer

A)  comes just before a trough. 
B)  follows a peak. 
C)  is defined as a period of negative real GDP growth. 
D)  is defined as a period of real GDP increases. 
A)  comes just before a trough. 
B)  follows a peak. 
C)  is defined as a period of negative real GDP growth. 
D)  is defined as a period of real GDP increases.

Question 7

Is it possible for nominal GDP to increase while real GDP does not change?

Accepted Answer

Yes, it is possible for nominal GDP to i

Question 8

In 2011, Ozzie purchased a 2008 Ford Escort from his neighbor for his son, purchased a 2007 ʺone ownerʺ Camry from Larchmont Toyota for his wife, bought a 2011 new Ford for himself, and sold his 2000 Dodge Caravan to his teenage nephew. Which, if any, of these transactions will be included in GDP in 2011?

Accepted Answer

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

Question 9

Double counting counting the same thing twice) in GDP accounting is avoided by not including

Accepted Answer

A)  intermediate goods. 
B)  illegal activities. 
C)  depreciation. 
D)  net exports. 
A)  intermediate goods. 
B)  illegal activities. 
C)  depreciation. 
D)  net exports.

Question 10

Government expenditures included in the expenditure approach to GDP include .

Accepted Answer

A)  buying a new bomber 
B)  social security and education 
C)  net exports 
D)  Both answers A and C are correct 
A)  buying a new bomber 
B)  social security and education 
C)  net exports 
D)  Both answers A and C are correct

Question 11

If an American firm produces goods that are sold to a German household, then

Accepted Answer

A)  U.S. GDP increases. 
B)  net exports in the United States will not change because an export immediately generates an offsetting import. 
C)  German GDP increases but not U.S. GDP. 
D)  the transaction is considered an export in the German GDP accounts. 
A)  U.S. GDP increases. 
B)  net exports in the United States will not change because an export immediately generates an offsetting import. 
C)  German GDP increases but not U.S. GDP. 
D)  the transaction is considered an export in the German GDP accounts.

Question 12

Net investment is the

Accepted Answer

A)  profit or loss in the stock market. 
B)  value of software and other network related products. 
C)  value of the depreciated capital multiplied by the changes in the price level. 
D)  total amount of gross investment minus depreciation. 
A)  profit or loss in the stock market. 
B)  value of software and other network related products. 
C)  value of the depreciated capital multiplied by the changes in the price level. 
D)  total amount of gross investment minus depreciation.

Question 13

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

Accepted Answer

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

Question 14

What is the relationship between actual and potential real GDP?

Accepted Answer

Real GDP equals potential GDP when all r

Question 15

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

Question 16

$\begin{array}{|l|l|}
\hline \text { Item } & \begin{array}{l}
\text { Billions of } \
\text { dollars }
\end{array} \
\hline \text { Compensation of employees } & 80 \
\hline \text { Net interest and rental income } & 30 \
\hline \text { Corporate profits } & 10 \
\hline \text { Proprietor's income } & 20 \
\hline
\end{array}$
-Use the information in the table above plus the fact that indirect taxes less subsidies are $10 billion and depreciation is $30 billion to calculate the value of GDP.

Accepted Answer

A)  $140 billion 
B)  $130 billion 
C)  $180 billion 
D)  $150 billion 
A)  $140 billion 
B)  $130 billion 
C)  $180 billion 
D)  $150 billion

Question 17

Gross domestic product GDP) is the__________ in a given time period.

Accepted Answer

A)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
D)  market value of final goods and services produced by the economy 
A)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
D)  market value of final goods and services produced by the economy

Question 18

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the method of calculating real GDP.

Accepted Answer

A)  moving-base-year 
B)  chain-weighted output index 
C)  base-year 
D)  fixed quantities/variable prices 
A)  moving-base-year 
B)  chain-weighted output index 
C)  base-year 
D)  fixed quantities/variable prices

Question 19

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

Accepted Answer

The basic point is that nothing escapes

Question 20

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

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and __________.

Real GDP is

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

Government purchas es of goods and services \ 240 Depreciation 240 Gros private domestic investment 400 Personal income taxes 140 Net taxes 120 Net exports of goods and services 80 Personal consumption expenditures 640 Net interest 100 -The income approach to measuring GDP sums together

An expansion

Is it possible for nominal GDP to increase while real GDP does not change?

Double counting counting the same thing twice) in GDP accounting is avoided by not including

Government expenditures included in the expenditure approach to GDP include .

If an American firm produces goods that are sold to a German household, then

Net investment is the

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

What is the relationship between actual and potential real GDP?

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

Item Billions of dollars Compensation of employees 80 Net interest and rental income 30 Corporate profits 10 Proprietor's income 20 -Use the information in the table above plus the fact that indirect taxes less subsidies are $10 billion and depreciation is $30 billion to calculate the value of GDP.

Gross domestic product GDP) is the__________ in a given time period.

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the method of calculating real GDP.

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

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.

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 4: Measuring Gdp and Economic Growth

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and __________.

Real GDP is

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

Government purchas es of goods and services \ 240 Depreciation 240 Gros private domestic investment 400 Personal income taxes 140 Net taxes 120 Net exports of goods and services 80 Personal consumption expenditures 640 Net interest 100 -The income approach to measuring GDP sums together

An expansion

Is it possible for nominal GDP to increase while real GDP does not change?

Double counting counting the same thing twice) in GDP accounting is avoided by not including

Government expenditures included in the expenditure approach to GDP include .

If an American firm produces goods that are sold to a German household, then

Net investment is the

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

What is the relationship between actual and potential real GDP?

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

Item Billions of dollars Compensation of employees 80 Net interest and rental income 30 Corporate profits 10 Proprietor's income 20 -Use the information in the table above plus the fact that indirect taxes less subsidies are $10 billion and depreciation is $30 billion to calculate the value of GDP.

Gross domestic product GDP) is the__________ in a given time period.

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the method of calculating real GDP.

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

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.

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters