Question 1

GDP is a measure of:

Accepted Answer

A)  domestic production. 
B)  changes in the general level of prices. 
C)  material well-being. 
D)  social welfare. 
A)  domestic production. 
B)  changes in the general level of prices. 
C)  material well-being. 
D)  social welfare.

Question 2

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

Accepted Answer

A)  $500 billion. 
B)  $150 billion. 
C)  $100 billion. 
D)  -$50 billion. 
A)  $500 billion. 
B)  $150 billion. 
C)  $100 billion. 
D)  -$50 billion.

Question 3

Which one of the following is an example of the circular flow model and shows the interdependence of households and firms?

Accepted Answer

A)  Households demand their resources from the firms in the factor markets and, in turn, supply in the product market the goods and services produced by firms. 
B)  The firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets. 
C)  Households supply their resources to the firms in the factor markets and, in turn, demand in the product market the goods and services produced by the firms. 
D)  The firms in the factor markets pay to households in the form of wages, interest, rent and profit ⎯ for resources demanded. 
A)  Households demand their resources from the firms in the factor markets and, in turn, supply in the product market the goods and services produced by firms. 
B)  The firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets. 
C)  Households supply their resources to the firms in the factor markets and, in turn, demand in the product market the goods and services produced by the firms. 
D)  The firms in the factor markets pay to households in the form of wages, interest, rent and profit ⎯ for resources demanded.

Question 4

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

Accepted Answer

A)  goods and services. 
B)  savings, spending, and investment. 
C)  natural resources, labor, and capital. 
D)  output of all final goods and services produced. 
A)  goods and services. 
B)  savings, spending, and investment. 
C)  natural resources, labor, and capital. 
D)  output of all final goods and services produced.

Question 5

Which of the following expenditures would be included in GDP for this year?

Accepted Answer

A)  The purchase of a new car. 
B)  The purchase of a new tire by General Motors for a new car. 
C)  The purchase of a used car. 
D)  The purchase of an intermediate good. 
A)  The purchase of a new car. 
B)  The purchase of a new tire by General Motors for a new car. 
C)  The purchase of a used car. 
D)  The purchase of an intermediate good.

Question 6

Real GDP means GDP:

Accepted Answer

A)  valued at prices in a base year. 
B)  that does not change from year to year. 
C)  corrected for changes in quality. 
D)  valued at prices at which goods are actually sold. 
A)  valued at prices in a base year. 
B)  that does not change from year to year. 
C)  corrected for changes in quality. 
D)  valued at prices at which goods are actually sold.

Question 7

Which of the following statements is true ?

Accepted Answer

A)  National income is total income earned by households whereas personal income is total income received by households (including transfer payments). 
B)  Disposable personal income equals personal income plus personal taxes. 
C)  The expenditures approach yields a higher GDP value than the income approach. 
D)  The expenditures approach yields a lower GDP value than the income approach. 
A)  National income is total income earned by households whereas personal income is total income received by households (including transfer payments). 
B)  Disposable personal income equals personal income plus personal taxes. 
C)  The expenditures approach yields a higher GDP value than the income approach. 
D)  The expenditures approach yields a lower GDP value than the income approach.

Question 8

Based on the circular flow model, goods and services flow from:

Accepted Answer

A)  households to businesses in product markets. 
B)  businesses to households in product markets. 
C)  households to businesses in factor markets. 
D)  businesses to households in factor markets. 
A)  households to businesses in product markets. 
B)  businesses to households in product markets. 
C)  households to businesses in factor markets. 
D)  businesses to households in factor markets.

Question 9

Gross domestic product (GDP) includes:

Accepted Answer

A)  intermediate as well as final goods. 
B)  foreign goods as well as domestically produced goods. 
C)  used goods sold in the current time period. 
D)  only final goods and services. 
A)  intermediate as well as final goods. 
B)  foreign goods as well as domestically produced goods. 
C)  used goods sold in the current time period. 
D)  only final goods and services.

GDP is a measure of:

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

Which one of the following is an example of the circular flow model and shows the interdependence of households and firms?

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

Which of the following expenditures would be included in GDP for this year?

Real GDP means GDP:

Which of the following statements is true ?

Based on the circular flow model, goods and services flow from:

Gross domestic product (GDP) includes:

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

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

Understanding Direct and Inverse Relationships between Variables

Filters

Exam 15: Gross Domestic Product

GDP is a measure of:

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

Which one of the following is an example of the circular flow model and shows the interdependence of households and firms?

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

Which of the following expenditures would be included in GDP for this year?

Real GDP means GDP:

Which of the following statements is true ?

Based on the circular flow model, goods and services flow from:

Gross domestic product (GDP) includes:

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

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

Understanding Direct and Inverse Relationships between Variables

Filters