The table given below reports the value of sales at each stage of production of an economics book. Table 5.1 $\begin{array}{c} \text { The Production of an Economics Book }\\ \begin{array}{|l|c|} \hline {\text { Production Stage }} & \text { Sales Value } \\ \hline \text { Purchase of Timber } & \$ 1.25 \\ \hline \text { Processing of Timber into Paper } & \$ 7.75 \\ \hline \text { Printing } & \$ 24.50 \\ \hline \text { Retail Sales of Economics Book } & \$ 38.00 \\ \hline \end{array} \end{array}$ -Refer to Table 5.1. Compute the market price of an economics book.

A) $13.50 B) $7.75 C) $24.50 D) $38 E) $71.50 A) $13.50 B) $7.75 C) $24.50 D) $38 E) $71.50

The table given below reports the price of soda over four consecutive years. Table 5.7 $\begin{array}{c} \text { Price Data }\\ \begin{array}{|c|c|c|} \hline \text { Year } & \text { Base-Year Soda Price } & \text { Current Soda Price } \\ \hline 1 \text { (base year) } & \$ 0.30 & \$ 0.30 \\ \hline 2 & \$ 0.30 & \$ 0.45 \\ \hline 3 & \$ 0.30 & \$ 0.55 \\ \hline 4 & \$ 0.30 & \$ 0.65 \\ \hline \end{array} \end{array}$ -Refer to Table 5.7. Compute the price index for the base year.

A) 130 B) 30 C) 80 D) 100 E) 120 A) 130 B) 30 C) 80 D) 100 E) 120

The figure given below shows the various stages of production of a Corvette, a sports car produced by General Motors Company (GMC): Table 5.2 $\begin{array}{l} \text { The Production of a Corvette }\\ \begin{array}{|l|c|} \hline {\text { Production Stage }} & {\text { Sales Value }} \\ \hline \text { Steal Co. sells the raw material to Motor Inc. } & \$ 1,500 \\ \text { Motor Inc. sells the engine to GMC } & \$ 2,350 \\ \text { Dealer buys car form GMC } & \$ 19,700 \\ \text { Dealer sells car (retail) } & \$ 36,000 \\ \hline \end{array} \end{array}$ -According to Table 5.2, the contribution to GDP from the production of this car is

A) $2,350. B) $16,300. C) $19,700. D) $36,000. E) $59,550. A) $2,350. B) $16,300. C) $19,700. D) $36,000. E) $59,550.

The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a nation) for the years 1995 and 2003. Table 5.6 $\begin{array}{c} \quad\quad\quad\quad\text { Production Data }\\ \quad\quad\quad\quad\quad\text { Prices per Unit } \quad\quad \text { Quantity }\\ \begin{array}{|c|l|l|c|c|} \hline \text { Production } & \mathbf{1 9 9 5} & \mathbf{2 0 0 3} & \mathbf{1 9 9 5} & \mathbf{2 0 0 3} \\ \hline \text { Computers } & \$ 2,000 & \$ 1,600 & 100 & 100 \\ \text { Calculators } & \$ 60 & \$ 70 & 900 & 900 \\ \hline \end{array}\end{array}$ -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?

A) 50 percent B) zero percent C) -75 percent D) 100 percent E) 14 percent A) 50 percent B) zero percent C) -75 percent D) 100 percent E) 14 percent

The table given below reports the price of soda over four consecutive years. Table 5.7 $\begin{array}{c} \text { Price Data }\\ \begin{array}{|c|c|c|} \hline \text { Year } & \text { Base-Year Soda Price } & \text { Current Soda Price } \\ \hline 1 \text { (base year) } & \$ 0.30 & \$ 0.30 \\ \hline 2 & \$ 0.30 & \$ 0.45 \\ \hline 3 & \$ 0.30 & \$ 0.55 \\ \hline 4 & \$ 0.30 & \$ 0.65 \\ \hline \end{array} \end{array}$ -Refer to Table 5.7. Compute the price index for the third year.

A) 150 B) 183 C) 100 D) 118 E) 130 A) 150 B) 183 C) 100 D) 118 E) 130

Exam 5: National Income Accounting

Scenario 5.1 Suppose that personal income is $250 billion. Furthermore, assume that retained corporate earnings are $2 billion, social security taxes are $15 billion, social security benefit checks equal $16 billion, the capital consumption allowance is $32 billion, and corporate taxes amount to $40 billion. -Refer to Scenario 5.1. The national income of this nation will be:

(Multiple Choice)

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Question 21

The circular flow diagram validates the fact that the different sectors in the economy are independent.

(True/False)

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Question 22

The table given below reports the value of sales at each stage of production of an economics book. Table 5.1 The Production of an Economics Book Production Stage Sales Value Purchase of Timber \ 1.25 Processing of Timber into Paper \ 7.75 Printing \ 24.50 Retail Sales of Economics Book \ 38.00 -Refer to Table 5.1. Compute the market price of an economics book.

(Multiple Choice)

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Question 23

If the price level in any country increases by 15 percent during a year, then the price index for that year will be 85 as compared to the base year.

(True/False)

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Question 24

A soft-drink bottling company supplies six-packs of orange flavored soda to retailers for a price of $2 each. If the components in each six-pack costs the bottling company $1.50, the value added to each six-pack by the bottling company is:

(Multiple Choice)

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Question 25

Which of the following is subtracted from GNP when calculating net national product?

(Multiple Choice)

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Question 26

The table given below reports the price of soda over four consecutive years. Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) \ 0.30 \ 0.30 2 \ 0.30 \ 0.45 3 \ 0.30 \ 0.55 4 \ 0.30 \ 0.65 -Refer to Table 5.7. Compute the price index for the base year.

(Multiple Choice)

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Question 27

To avoid double counting in calculating GDP,

(Multiple Choice)

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Question 28

What is the approximate percent of GDP produced by private firms in the United States?

(Multiple Choice)

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Question 29

The figure given below shows the various stages of production of a Corvette, a sports car produced by General Motors Company (GMC): Table 5.2 The Production of a Corvette Production Stage Sales Value Steal Co. sells the raw material to Motor Inc. \ 1,500 Motor Inc. sells the engine to GMC \ 2,350 Dealer buys car form GMC \ 19,700 Dealer sells car (retail) \ 36,000 -According to Table 5.2, the contribution to GDP from the production of this car is

(Multiple Choice)

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Question 30

The term value added is used to describe:

(Multiple Choice)

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Question 31

Suppose the price index is 100 in the base year and the price of a pound of oranges in that year is $1.96. Now, if the price index changes to 105 in the following year, how much would a pound of oranges cost?

(Multiple Choice)

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Question 32

Which of the following is included in GDP computation according to the income method?

(Multiple Choice)

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Question 33

Which of the following is true of nominal GDP?

(Multiple Choice)

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Question 34

Personal income and property taxes paid by individuals are not included in the income approach of gross domestic product calculation.

(True/False)

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Question 35

The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a nation) for the years 1995 and 2003. Table 5.6 Production Data Prices per Unit Quantity Production Computers \ 2,000 \ 1,600 100 100 Calculators \ 60 \ 70 900 900 -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?

(Multiple Choice)

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Question 36

The table given below reports the price of soda over four consecutive years. Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) \ 0.30 \ 0.30 2 \ 0.30 \ 0.45 3 \ 0.30 \ 0.55 4 \ 0.30 \ 0.65 -Refer to Table 5.7. Compute the price index for the third year.

(Multiple Choice)

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Question 37

Which of the following accounts for the largest percentage of output in the United States?

(Multiple Choice)

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Question 38

The consumer price index [CPI] is considered the best measure of the cost of living of individuals in a country.

(True/False)

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Question 39

The producer price index was earlier known as _____.

(Multiple Choice)

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Question 40

The circular flow diagram validates the fact that the different sectors in the economy are independent.

If the price level in any country increases by 15 percent during a year, then the price index for that year will be 85 as compared to the base year.

A soft-drink bottling company supplies six-packs of orange flavored soda to retailers for a price of $2 each. If the components in each six-pack costs the bottling company $1.50, the value added to each six-pack by the bottling company is:

Which of the following is subtracted from GNP when calculating net national product?

The table given below reports the price of soda over four consecutive years. Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) \ 0.30 \ 0.30 2 \ 0.30 \ 0.45 3 \ 0.30 \ 0.55 4 \ 0.30 \ 0.65 -Refer to Table 5.7. Compute the price index for the base year.

To avoid double counting in calculating GDP,

What is the approximate percent of GDP produced by private firms in the United States?

The term value added is used to describe:

Suppose the price index is 100 in the base year and the price of a pound of oranges in that year is $1.96. Now, if the price index changes to 105 in the following year, how much would a pound of oranges cost?

Which of the following is included in GDP computation according to the income method?

Which of the following is true of nominal GDP?

Personal income and property taxes paid by individuals are not included in the income approach of gross domestic product calculation.

The table given below reports the price of soda over four consecutive years. Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) \ 0.30 \ 0.30 2 \ 0.30 \ 0.45 3 \ 0.30 \ 0.55 4 \ 0.30 \ 0.65 -Refer to Table 5.7. Compute the price index for the third year.

Which of the following accounts for the largest percentage of output in the United States?

The consumer price index [CPI] is considered the best measure of the cost of living of individuals in a country.

The producer price index was earlier known as _____.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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