Question 1

If an economy's GDP falls, then it must be the case that the economy's

Accepted Answer

A) income and saving fall. 
B) income and market value of all production both fall. 
C) income falls and market value of all production rises. 
D) income rises and market value of all production falls. 
A) income and saving fall. 
B) income and market value of all production both fall. 
C) income falls and market value of all production rises. 
D) income rises and market value of all production falls.

Question 2

Which of the following is included in the consumption component of U.S. GDP?

Accepted Answer

A) purchases of staplers, paper clips, and pens by U.S. business firms 
B) purchases of natural gas by U.S. households 
C) purchases of newly constructed homes by U.S. households 
D) All of the above are correct. 
A) purchases of staplers, paper clips, and pens by U.S. business firms 
B) purchases of natural gas by U.S. households 
C) purchases of newly constructed homes by U.S. households 
D) All of the above are correct.

Question 3

Table 23-5
The country of Caspir produces only cereal and milk. 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 23-5. This country's inflation rate from 2017 to 2018 was

Accepted Answer

A) 20.0%. 
B) 21.8%. 
C) 38.9%. 
D) 28.0%. 
A) 20.0%. 
B) 21.8%. 
C) 38.9%. 
D) 28.0%.

Question 4

Identify which of the following are included in the government purchases component of GDP.
the salary paid to a state court judge
unemployment insurance benefits
the payment made by the federal government for a jet fighter
social security payments
a county builds a jail building

Accepted Answer

The following are included in

Question 5

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Accepted Answer

A) 1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
B) 1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
C) 6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
D) 6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
A) 1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
B) 1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
C) 6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
D) 6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.

Question 6

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

Accepted Answer

A) $2.5 billion. 
B) $10 billion. 
C) $40 billion. 
D) $100 billion. 
A) $2.5 billion. 
B) $10 billion. 
C) $40 billion. 
D) $100 billion.

Question 7

The value of the housing services provided by the economy's owner-occupied houses is

Accepted Answer

A) included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. 
B) included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. 
C) excluded from GDP since these services are not sold in any market. 
D) excluded from GDP since the value of these housing services cannot be estimated with any degree of precision. 
A) included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. 
B) included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. 
C) excluded from GDP since these services are not sold in any market. 
D) excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.

Question 8

Table 23-3
The table below contains data for the country of Crete for the year 2010.  
-Refer to Table 23-3. What were Crete's net exports in 2010?

Accepted Answer

A) ​-$217 
B) ​-$88 
C) ​$88 
D) ​$217 
A) ​-$217 
B) ​-$88 
C) ​$88 
D) ​$217

Question 9

​In computing GDP, market prices are used in the calculations because

Accepted Answer

A) ​market prices are constant over time. 
B) ​market prices do not reflect how prices change over time. 
C) ​market prices are consistently free of inflation. 
D) ​market prices can be used to combine the variety of goods and services produced in an economy into a single measure. 
A) ​market prices are constant over time. 
B) ​market prices do not reflect how prices change over time. 
C) ​market prices are consistently free of inflation. 
D) ​market prices can be used to combine the variety of goods and services produced in an economy into a single measure.

Question 10

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Accepted Answer

A) True 
 B)False

Question 11

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Accepted Answer

GDP = C + I + G + NX = $5.5 tr

Question 12

In the equation Y = C + I + G + NX,

Accepted Answer

A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct. 
A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct.

Question 13

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 was the growth rate of real GDP for 1930?

Accepted Answer

A) -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP. 
B) -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP. 
C) -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP. 
D) -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP. 
A) -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP. 
B) -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP. 
C) -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP. 
D) -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.

Question 14

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Accepted Answer

A) True 
 B)False

Question 15

Table 23-5
The country of Caspir produces only cereal and milk. 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 23-5. This country's inflation rate from 2016 to 2017 was

Accepted Answer

A) 25.0%. 
B) 23.1%. 
C) 26.1%. 
D) 18.8%. 
A) 25.0%. 
B) 23.1%. 
C) 26.1%. 
D) 18.8%.

Question 16

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Accepted Answer

A) market prices. 
B) statistical estimates of the value of goods and services to consumers. 
C) prices based on the assumption that producers make no profits. 
D) the maximum amount consumers would be willing to pay. 
A) market prices. 
B) statistical estimates of the value of goods and services to consumers. 
C) prices based on the assumption that producers make no profits. 
D) the maximum amount consumers would be willing to pay.

Question 17

New home construction is included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP. 
A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP.

Question 19

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 2010? Show your work.

Accepted Answer

Nominal GDP was $5x100 + $60x1

Question 20

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A) in government expenditures and exports. 
B) government expenditures and imports. 
C) exports, but not government expenditures. 
D) imports, but not government expenditures. 
A) in government expenditures and exports. 
B) government expenditures and imports. 
C) exports, but not government expenditures. 
D) imports, but not government expenditures.

Exam 23: Measuring a Nation S Income

If an economy's GDP falls, then it must be the case that the economy's

Which of the following is included in the consumption component of U.S. GDP?

Table 23-5 The country of Caspir produces only cereal and milk. 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 23-5. This country's inflation rate from 2017 to 2018 was

Identify which of the following are included in the government purchases component of GDP. the salary paid to a state court judge unemployment insurance benefits the payment made by the federal government for a jet fighter social security payments a county builds a jail building

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

The value of the housing services provided by the economy's owner-occupied houses is

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's net exports in 2010?

​In computing GDP, market prices are used in the calculations because

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

In the equation Y = C + I + G + NX,

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 was the growth rate of real GDP for 1930?

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Table 23-5 The country of Caspir produces only cereal and milk. 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 23-5. This country's inflation rate from 2016 to 2017 was

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

New home construction is included in the consumption component of GDP.

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

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 2010? Show your work.

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

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

In computing GDP, market prices are used in the calculations because