Question 1

Exhibit 5-10 GDP data (billions of dollars)   In Exhibit 5-10, and using the expenditures approach, compute gross domestic product (GDP). Which of the following is correct?

Accepted Answer

A) $8,500 billion. 
B) $8,400 billion. 
C) $7,400 billion. 
D) $8,650 billion. 
E) $8,350 billion. 
A) $8,500 billion. 
B) $8,400 billion. 
C) $7,400 billion. 
D) $8,650 billion. 
E) $8,350 billion.

Question 2

Exhibit 5-5 Gross domestic product data
  As shown in Exhibit 5-5, using the income approach, gross domestic product (GDP)is:

Accepted Answer

A) $8,000 billion. 
B) $8,800 billion. 
C) $9,400 billion. 
D) $11,000 billion. 
E) $12,000 billion. 
A) $8,000 billion. 
B) $8,800 billion. 
C) $9,400 billion. 
D) $11,000 billion. 
E) $12,000 billion.

Question 3

According to the expenditure approach, the largest component of GDP is:

Accepted Answer

A) government spending. 
B) proprietor's income. 
C) net interest. 
D) personal consumption expenditures. 
E) compensation of employees. 
A) government spending. 
B) proprietor's income. 
C) net interest. 
D) personal consumption expenditures. 
E) compensation of employees.

Question 4

Increased production, but not increased inflation, will result in higher:

Accepted Answer

A) nominal GDP. 
B) money GDP. 
C) real GDP. 
D) current dollar GDP. 
A) nominal GDP. 
B) money GDP. 
C) real GDP. 
D) current dollar GDP.

Question 5

Depreciation or consumption of fixed capital depreciation measures:

Accepted Answer

A) net investment less gross investment. 
B) the loss of productive ability due to capital intensive production. 
C) capital that is wasted in the production process. 
D) the value of existing capital stock used up in the production process. 
E) the decline in the value of inventories caused by inflation. 
A) net investment less gross investment. 
B) the loss of productive ability due to capital intensive production. 
C) capital that is wasted in the production process. 
D) the value of existing capital stock used up in the production process. 
E) the decline in the value of inventories caused by inflation.

Question 6

The lower portion of the circular flow model contains factor markets in which households provide:

Accepted Answer

A) output of all final goods and services produced. 
B) savings, spending, and investment. 
C) labor, money, and machines. 
D) none of these. 
A) output of all final goods and services produced. 
B) savings, spending, and investment. 
C) labor, money, and machines. 
D) none of these.

Question 7

If the GDP chain price index in a given year is less than 100, real GDP in that year would be greater than nominal GDP.

Accepted Answer

A) True 
 B)False

Question 8

In recent years, people have benefited from greater amounts of leisure time. This trend:

Accepted Answer

A) has caused GDP to rise. 
B) has caused GDP to fall. 
C) made GDP fluctuate randomly. 
D) is not accounted for in GDP. 
A) has caused GDP to rise. 
B) has caused GDP to fall. 
C) made GDP fluctuate randomly. 
D) is not accounted for in GDP.

Question 9

Exhibit 5-3 Expenditure approach  
As shown in Exhibit 5-3, net exports is:

Accepted Answer

A) $75 billion. 
B) $100 billion. 
C) $20 billion. 
D) $120 billion. 
A) $75 billion. 
B) $100 billion. 
C) $20 billion. 
D) $120 billion.

Question 10

If you buy a commemorative Princess Diana stamp issued by the British government, the purchase is considered part of:

Accepted Answer

A) C. 
B) I. 
C) G. 
D) X. 
E) M. 
A) C. 
B) I. 
C) G. 
D) X. 
E) M.

Question 11

If exports rise and imports fall, then:

Accepted Answer

A) GDP will increase. 
B) GDP will decrease. 
C) GDP may remain unchanged. 
D) net exports will fall. 
E) transfer will rise. 
A) GDP will increase. 
B) GDP will decrease. 
C) GDP may remain unchanged. 
D) net exports will fall. 
E) transfer will rise.

Question 12

National income is calculated as GDP:

Accepted Answer

A) plus depreciation. 
B) plus exports. 
C) minus imports. 
D) minus depreciation. 
A) plus depreciation. 
B) plus exports. 
C) minus imports. 
D) minus depreciation.

Question 13

Fixed investment refers to investment in stocks, bonds, and improvements to land.

Accepted Answer

A) True 
 B)False

Question 14

Gross domestic product is a measure of:

Accepted Answer

A) market value of a nation's capital assets (physical capital). 
B) expenditures on and sales revenues derived from all goods and services exchanged during a period. 
C) market value of the output produced during a period. 
D) asset holdings of people and the happiness that they derived from the ownership of those assets. 
A) market value of a nation's capital assets (physical capital). 
B) expenditures on and sales revenues derived from all goods and services exchanged during a period. 
C) market value of the output produced during a period. 
D) asset holdings of people and the happiness that they derived from the ownership of those assets.

Question 15

Using the income approach, an estimate of the value of capital worn out producing GDP is:

Accepted Answer

A) indirect business taxes. 
B) capital consumption allowance or depreciation. 
C) gross private domestic investment. 
D) capital erosion estimate. 
A) indirect business taxes. 
B) capital consumption allowance or depreciation. 
C) gross private domestic investment. 
D) capital erosion estimate.

Question 16

Exhibit 5-9 GDP data (billions of dollars)   In Exhibit 5-10, using the expenditure approach, compute business investment spending (I). Which of the following is correct?

Accepted Answer

A) $950 billion. 
B) $50 billion. 
C) $600 billion. 
D) $1,000 billion. 
A) $950 billion. 
B) $50 billion. 
C) $600 billion. 
D) $1,000 billion.

Question 17

Exhibit 5-1 Use the information below to answer the following question(s).   Refer to Exhibit 5-1. What is this country's gross domestic product?

Accepted Answer

A) $1,225. 
B) $1,305. 
C) $1,365. 
D) $1,440. 
A) $1,225. 
B) $1,305. 
C) $1,365. 
D) $1,440.

Question 18

Exhibit 5-11 GDP data (billions of dollars)   In Exhibit 5-11, and using the expenditures approach, gross domestic product (GDP)equals:

Accepted Answer

A) $7,010 billion. 
B) $10,360 billion. 
C) $9,660 billion. 
D) $7,860 billion. 
E) $12,060 billion. 
A) $7,010 billion. 
B) $10,360 billion. 
C) $9,660 billion. 
D) $7,860 billion. 
E) $12,060 billion.

Question 19

Which one of the following statements is true ?

Accepted Answer

A) Resources flow from the government to firms. 
B) Taxes flow from foreign economies to the government. 
C) Goods and services flow from households to foreign economies. 
D) Resources flow from households to firms. 
E) Resource payments flow from households to the government. 
A) Resources flow from the government to firms. 
B) Taxes flow from foreign economies to the government. 
C) Goods and services flow from households to foreign economies. 
D) Resources flow from households to firms. 
E) Resource payments flow from households to the government.

Question 20

Exhibit 5-9 GDP data (billions of dollars)   In Exhibit 5-10, and using the expenditures approach, compute net exports (NX). Which of the following is correct?

Accepted Answer

A) - $100 billion. 
B) $150 billion. 
C) $250 billion. 
D) - $50 billion. 
E) - $60 billion. 
A) - $100 billion. 
B) $150 billion. 
C) $250 billion. 
D) - $50 billion. 
E) - $60 billion.

Exam 5: Gross Domestic Product

Exhibit 5-10 GDP data (billions of dollars) In Exhibit 5-10, and using the expenditures approach, compute gross domestic product (GDP). Which of the following is correct?

Exhibit 5-5 Gross domestic product data As shown in Exhibit 5-5, using the income approach, gross domestic product (GDP)is:

According to the expenditure approach, the largest component of GDP is:

Increased production, but not increased inflation, will result in higher:

Depreciation or consumption of fixed capital depreciation measures:

The lower portion of the circular flow model contains factor markets in which households provide:

If the GDP chain price index in a given year is less than 100, real GDP in that year would be greater than nominal GDP.

In recent years, people have benefited from greater amounts of leisure time. This trend:

Exhibit 5-3 Expenditure approach As shown in Exhibit 5-3, net exports is:

If you buy a commemorative Princess Diana stamp issued by the British government, the purchase is considered part of:

If exports rise and imports fall, then:

National income is calculated as GDP:

Fixed investment refers to investment in stocks, bonds, and improvements to land.

Gross domestic product is a measure of:

Using the income approach, an estimate of the value of capital worn out producing GDP is:

Exhibit 5-9 GDP data (billions of dollars) In Exhibit 5-10, using the expenditure approach, compute business investment spending (I). Which of the following is correct?

Exhibit 5-1 Use the information below to answer the following question(s). Refer to Exhibit 5-1. What is this country's gross domestic product?

Exhibit 5-11 GDP data (billions of dollars) In Exhibit 5-11, and using the expenditures approach, gross domestic product (GDP)equals:

Which one of the following statements is true ?

Exhibit 5-9 GDP data (billions of dollars) In Exhibit 5-10, and using the expenditures approach, compute net exports (NX). Which of the following is correct?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

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