Question 1

GDP is not a perfect measure of well-being; for example,

Accepted Answer

A) GDP incorporates a large number of non-market goods and services that are of little value to society. 
B) GDP places too much emphasis on the value of leisure. 
C) GDP fails to account for the quality of the environment. 
D) All of the above are correct. 
A) GDP incorporates a large number of non-market goods and services that are of little value to society. 
B) GDP places too much emphasis on the value of leisure. 
C) GDP fails to account for the quality of the environment. 
D) All of the above are correct.

Question 2

The basic tools of supply and demand are

Accepted Answer

A) useful only in the analysis of economic behavior in individual markets. 
B) useful in analyzing the overall economy, but not in analyzing individual markets. 
C) central to microeconomic analysis, but seldom used in macroeconomic analysis. 
D) central to macroeconomic analysis as well as to microeconomic analysis. 
A) useful only in the analysis of economic behavior in individual markets. 
B) useful in analyzing the overall economy, but not in analyzing individual markets. 
C) central to microeconomic analysis, but seldom used in macroeconomic analysis. 
D) central to macroeconomic analysis as well as to microeconomic analysis.

Question 3

If net exports is a negative number for a particular year, then

Accepted Answer

A) the value of firms' inventories declined over the course of the year. 
B) consumption exceeded the sum of investment and government purchases during the year. 
C) the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D) the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year. 
A) the value of firms' inventories declined over the course of the year. 
B) consumption exceeded the sum of investment and government purchases during the year. 
C) the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D) the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

Question 4

Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.  
-Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1931?

Accepted Answer

A) 9.16, -11.5 
B) 9.16, -10.3 
C) 1091.37, 10.3 
D) 1091.37, 11.5 
A) 9.16, -11.5 
B) 9.16, -10.3 
C) 1091.37, 10.3 
D) 1091.37, 11.5

Question 5

In years of economic contraction, firms throughout the economy increase their production of goods and services, employment rises, and jobs are easy to find.

Accepted Answer

A) True 
 B)False

Question 6

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
Prices and Quantities  
-Refer to Table 23-10. What was this country's nominal GDP in 2014?

Accepted Answer

A) $9,500 
B) $10,000 
C) $10,200 
D) $10,500 
A) $9,500 
B) $10,000 
C) $10,200 
D) $10,500

Question 7

Which of the following is not an example of a durable good?

Accepted Answer

A) a refrigerator. 
B) an automobile. 
C) a business suit. 
D) a furnace. 
A) a refrigerator. 
B) an automobile. 
C) a business suit. 
D) a furnace.

Question 8

Expenditures on a nation's domestic production

Accepted Answer

A) are less than its domestic production. 
B) are equal to its domestic production. 
C) are greater than its domestic production. 
D) could be less than, equal to, or greater than its domestic production. 
A) are less than its domestic production. 
B) are equal to its domestic production. 
C) are greater than its domestic production. 
D) could be less than, equal to, or greater than its domestic production.

Question 9

​Since transfer payments by government are not associated with the production of goods and services, they are not included in GDP.

Accepted Answer

A) True 
 B)False

Question 10

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

Accepted Answer

A) Only Joe's grocery store purchases are included in GDP. 
B) Only Joe's and Jim's grocery store purchases are included in GDP. 
C) Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value. 
D) Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value, if Jim provides this information. 
A) Only Joe's grocery store purchases are included in GDP. 
B) Only Joe's and Jim's grocery store purchases are included in GDP. 
C) Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value. 
D) Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value, if Jim provides this information.

Question 11

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities  
-Refer to Table 23-11.
What was the inflation rate for 2010? Show your work.

Accepted Answer

2009 is the base year so the GDP Deflato

Question 12

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Accepted Answer

A) GDP increases by $10.00 
B) GDP increases by $12.00 
C) GDP increases by $22.00 
D) GDP increases by $32.00 
A) GDP increases by $10.00 
B) GDP increases by $12.00 
C) GDP increases by $22.00 
D) GDP increases by $32.00

Question 13

Table 23-1
The table below contains data for Chereaux for the year 2015.  
-Refer to Table 23-1. Disposable personal income for Chereaux in 2015 is

Accepted Answer

A) $190. 
B) $211. 
C) $130. 
D) $141. 
A) $190. 
B) $211. 
C) $130. 
D) $141.

Question 14

Which of the following is included in the calculation of GDP?

Accepted Answer

A) The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country. 
B) The purchase of a new edition of a foreign textbook that was produced in a different nation. 
C) The purchase of ink and paper supplies by a textbook company for the production of new textbooks. 
D) The purchase of a used textbook from a friend who took the same class last year. 
A) The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country. 
B) The purchase of a new edition of a foreign textbook that was produced in a different nation. 
C) The purchase of ink and paper supplies by a textbook company for the production of new textbooks. 
D) The purchase of a used textbook from a friend who took the same class last year.

Question 15

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods

Question 16

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator?

Accepted Answer

A) 25. 
B) 40. 
C) 250. 
D) 400. 
A) 25. 
B) 40. 
C) 250. 
D) 400.

Question 17

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Accepted Answer

The answer of Calculate GDP for a country with investment...

Question 18

Which of the following is included in the investment component of GDP?

Accepted Answer

A) Elaine pays her college tuition bill. 
B) John's law firm buys him a new computer. 
C) Laura buys a bond that McDonald's sells to raise funds. 
D) All of the above are correct. 
A) Elaine pays her college tuition bill. 
B) John's law firm buys him a new computer. 
C) Laura buys a bond that McDonald's sells to raise funds. 
D) All of the above are correct.

Question 19

In the economy of Talikastan in 2015, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $1000, and investment was $1000. What were Talikastan's exports in 2015?

Accepted Answer

A) -$500 
B) $500 
C) $1500 
D) $-1500 
A) -$500 
B) $500 
C) $1500 
D) $-1500

Question 20

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities  
-Refer to Table 23-11.
What was nominal GDP, real GDP, and the GDP deflator for 2008?

Accepted Answer

Nominal GDP was $4x100 + $50X1

Exam 23: Measuring a Nation S Income

GDP is not a perfect measure of well-being; for example,

The basic tools of supply and demand are

If net exports is a negative number for a particular year, then

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1931?

In years of economic contraction, firms throughout the economy increase their production of goods and services, employment rises, and jobs are easy to find.

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . Prices and Quantities -Refer to Table 23-10. What was this country's nominal GDP in 2014?

Which of the following is not an example of a durable good?

Expenditures on a nation's domestic production

​Since transfer payments by government are not associated with the production of goods and services, they are not included in GDP.

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was the inflation rate for 2010? Show your work.

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Disposable personal income for Chereaux in 2015 is

Which of the following is included in the calculation of GDP?

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator?

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Which of the following is included in the investment component of GDP?

In the economy of Talikastan in 2015, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $1000, and investment was $1000. What were Talikastan's exports in 2015?

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2008?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Since transfer payments by government are not associated with the production of goods and services, they are not included in GDP.