Question 1

The expenditure approach to measuring GDP includes firms' spending on wages.

Accepted Answer

A) True 
 B)False

Question 2

The series of ups and downs the economy tends to move in is called

Accepted Answer

A)  the business cycle. 
B)  a recession. 
C)  a depression. 
D)  economic growth. 
A)  the business cycle. 
B)  a recession. 
C)  a depression. 
D)  economic growth.

Question 3

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 4

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

Accepted Answer

A)  peak, expansion, and recession, respectively 
B)  recession, expansion, and peak, respectively 
C)  expansion, peak, and recession, respectively 
D)  peak, recession, and expansion, respectively 
A)  peak, expansion, and recession, respectively 
B)  recession, expansion, and peak, respectively 
C)  expansion, peak, and recession, respectively 
D)  peak, recession, and expansion, respectively

Question 5

What we produce during our working time is ________ as part of GDP and the enjoyment we gain from our leisure time is ________ as part of GDP.

Accepted Answer

A)  included; not included 
B)  included; included 
C)  not included; included 
D)  not included; not included 
A)  included; not included 
B)  included; included 
C)  not included; included 
D)  not included; not included

Question 6

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 7

-Using the information in the table above, calculate gross domestic product.

Accepted Answer

A)  $5,130 billion 
B)  $5,320 billion 
C)  $4,760 billion 
D)  $4,690 billion 
A)  $5,130 billion 
B)  $5,320 billion 
C)  $4,760 billion 
D)  $4,690 billion

Question 8

Which of the following is a final good?

Accepted Answer

A)  the memory chips in your new smart phone 
B)  a share of IBM stock 
C)  flour purchased at the store to bake cookies 
D)  flour used by the bakery to bake cookies 
A)  the memory chips in your new smart phone 
B)  a share of IBM stock 
C)  flour purchased at the store to bake cookies 
D)  flour used by the bakery to bake cookies

Question 9

-Using the information in the table above, net exports equals

Accepted Answer

A)  $1,370 billion. 
B)  $650 billion. 
C)  $20 billion. 
D)  -$70 billion. 
A)  $1,370 billion. 
B)  $650 billion. 
C)  $20 billion. 
D)  -$70 billion.

Question 10

The horizontal axis on a time-series graph

Accepted Answer

A)  measures the variable being graphed. 
B)  measures units of time such as years. 
C)  runs parallel to the y-axis. 
D)  measures how the variable being graphed changes. 
A)  measures the variable being graphed. 
B)  measures units of time such as years. 
C)  runs parallel to the y-axis. 
D)  measures how the variable being graphed changes.

Question 11

-Using the data in the above table, what is the value of net exports?

Accepted Answer

A)  -$181 billion 
B)  $181 billion 
C)  $957 billion 
D)  -$957 billion 
A)  -$181 billion 
B)  $181 billion 
C)  $957 billion 
D)  -$957 billion

Question 12

What is "underground production"? Is it included in GDP?

Accepted Answer

Underground production is the production

Question 13

All of the following household expenditures are included in consumption expenditure EXCEPT

Accepted Answer

A)  payment to a dentist for filling a tooth. 
B)  purchase of corporate stock. 
C)  purchase of a new purse. 
D)  purchase of hair styling. 
A)  payment to a dentist for filling a tooth. 
B)  purchase of corporate stock. 
C)  purchase of a new purse. 
D)  purchase of hair styling.

Question 14

Real GDP is not a perfect indicator of economic welfare because

Accepted Answer

A)  it includes the underground economy. 
B)  it includes a direct measure of health and life expectancy. 
C)  it underestimates inflation. 
D)  economic welfare depends on many factors not measured or not measured accurately by real GDP. 
A)  it includes the underground economy. 
B)  it includes a direct measure of health and life expectancy. 
C)  it underestimates inflation. 
D)  economic welfare depends on many factors not measured or not measured accurately by real GDP.

Question 15

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

Accepted Answer

Several adjustments must be made to net

Question 16

The word "final" in the definition of GDP refers to

Accepted Answer

A)  not counting intermediate goods or services. 
B)  the time period when production took place. 
C)  valuing production at market prices. 
D)  counting the intermediate goods and services used to produce GDP. 
A)  not counting intermediate goods or services. 
B)  the time period when production took place. 
C)  valuing production at market prices. 
D)  counting the intermediate goods and services used to produce GDP.

Question 17

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Accepted Answer

A)  a new set of tools by an auto mechanic, for use in repairing cars. 
B)  100 shares of IBM stock. 
C)  a 100 year old house by a married couple. 
D)  computer chips by Dell to put in their personal computers. 
A)  a new set of tools by an auto mechanic, for use in repairing cars. 
B)  100 shares of IBM stock. 
C)  a 100 year old house by a married couple. 
D)  computer chips by Dell to put in their personal computers.

Question 18

Which of the following purchases is included in personal consumption expenditures when determining gross domestic product?

Accepted Answer

A)  purchase of a new house because of the arrival of a new baby 
B)  purchase of a new office building 
C)  vacation expenses for a spring trip to Fort Lauderdale 
D)  purchases of jeans to add to a store's inventory 
A)  purchase of a new house because of the arrival of a new baby 
B)  purchase of a new office building 
C)  vacation expenses for a spring trip to Fort Lauderdale 
D)  purchases of jeans to add to a store's inventory

Question 19

The calculation of the final goods and services sold in an economy would NOT include

Accepted Answer

A)  the purchase of a lawnmower by a household. 
B)  General Motors' purchases of tires for new automobiles. 
C)  Ford Motor Company's purchase of a new industrial robot to be used to produce cars. 
D)  the purchase of a service by a household. 
A)  the purchase of a lawnmower by a household. 
B)  General Motors' purchases of tires for new automobiles. 
C)  Ford Motor Company's purchase of a new industrial robot to be used to produce cars. 
D)  the purchase of a service by a household.

Question 20

-Using the data in the above table, what is the value of national saving?

Accepted Answer

A)  $1,202 billion 
B)  $2,837 billion 
C)  $1,053 billion 
D)  -$85 billion 
A)  $1,202 billion 
B)  $2,837 billion 
C)  $1,053 billion 
D)  -$85 billion

The expenditure approach to measuring GDP includes firms' spending on wages.

The series of ups and downs the economy tends to move in is called

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

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

What we produce during our working time is as part of GDP and the enjoyment we gain from our leisure time is as part of GDP.

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

-Using the information in the table above, calculate gross domestic product.

Which of the following is a final good?

-Using the information in the table above, net exports equals

The horizontal axis on a time-series graph

-Using the data in the above table, what is the value of net exports?

What is "underground production"? Is it included in GDP?

All of the following household expenditures are included in consumption expenditure EXCEPT

Real GDP is not a perfect indicator of economic welfare because

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

The word "final" in the definition of GDP refers to

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Which of the following purchases is included in personal consumption expenditures when determining gross domestic product?

The calculation of the final goods and services sold in an economy would NOT include

-Using the data in the above table, what is the value of national saving?

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring Gdp and Economic Growth

The expenditure approach to measuring GDP includes firms' spending on wages.

The series of ups and downs the economy tends to move in is called

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

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

What we produce during our working time is ________ as part of GDP and the enjoyment we gain from our leisure time is ________ as part of GDP.

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

-Using the information in the table above, calculate gross domestic product.

Which of the following is a final good?

-Using the information in the table above, net exports equals

The horizontal axis on a time-series graph

-Using the data in the above table, what is the value of net exports?

What is "underground production"? Is it included in GDP?

All of the following household expenditures are included in consumption expenditure EXCEPT

Real GDP is not a perfect indicator of economic welfare because

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

The word "final" in the definition of GDP refers to

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Which of the following purchases is included in personal consumption expenditures when determining gross domestic product?

The calculation of the final goods and services sold in an economy would NOT include

-Using the data in the above table, what is the value of national saving?

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

What we produce during our working time is as part of GDP and the enjoyment we gain from our leisure time is as part of GDP.