Question 1

Exhibit 11-9  GDP data (billions of dollars)   In Exhibit 11-9, 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 2

In contrast with nominal GDP, real GDP refers to nominal GDP:

Accepted Answer

A)  minus exports. 
B)  minus personal income taxes. 
C)  corrected for price changes. 
D)  corrected for depreciation. 
A)  minus exports. 
B)  minus personal income taxes. 
C)  corrected for price changes. 
D)  corrected for depreciation.

Question 3

Which national income account should be examined to discover trends in the after-tax income that people have to save and spend?

Accepted Answer

A)  Gross domestic product (GDP). 
B)  Personal income (PI). 
C)  National income (NI). 
D)  Disposable personal income (DI). 
A)  Gross domestic product (GDP). 
B)  Personal income (PI). 
C)  National income (NI). 
D)  Disposable personal income (DI).

Question 4

Which of the following purchases would be counted as a final good in the GDP calculation?

Accepted Answer

A)  A family's purchase of a used car. 
B)  A speculator's purchase of 100 shares of Apple Computer stock. 
C)  A deli's purchase of bread for making its sandwiches. 
D)  A business's purchase of new office equipment. 
A)  A family's purchase of a used car. 
B)  A speculator's purchase of 100 shares of Apple Computer stock. 
C)  A deli's purchase of bread for making its sandwiches. 
D)  A business's purchase of new office equipment.

Question 5

Exhibit 11-8  GDP data (billions of dollars)   In Exhibit 11-8, compute personal income (PI). Which of the following is correct?

Accepted Answer

A)  $7,110 billion. 
B)  $7,410 billion. 
C)  $6,740 billion. 
D)  $7,760 billion. 
E)  $6,780 billion. 
A)  $7,110 billion. 
B)  $7,410 billion. 
C)  $6,740 billion. 
D)  $7,760 billion. 
E)  $6,780 billion.

Question 6

To get Personal Income from National Income, one must:

Accepted Answer

A)  subtract out retained earnings, Social Security taxes, and transfer payments, and add in corporate business taxes. 
B)  subtract corporate profits and Social Security taxes, and add in transfer payments and other income. 
C)  subtract retained earnings, corporate business taxes, and transfer payments, and add in Social Security taxes. 
D)  subtract out corporate business taxes, Social Security taxes and transfer payments, and add in retained earnings. 
A)  subtract out retained earnings, Social Security taxes, and transfer payments, and add in corporate business taxes. 
B)  subtract corporate profits and Social Security taxes, and add in transfer payments and other income. 
C)  subtract retained earnings, corporate business taxes, and transfer payments, and add in Social Security taxes. 
D)  subtract out corporate business taxes, Social Security taxes and transfer payments, and add in retained earnings.

Question 7

Exhibit 11-1   Refer to Exhibit 11-1. 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 8

Which one of the following statements is true ?

Accepted Answer

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

Question 9

Gross domestic product is the total dollar value at current prices of all final and intermediate goods produced by a nation during a given time period.

Accepted Answer

A) True 
 B)False

Question 10

Suppose in a given year, GDP was $7,242 billion and the GDP chain price index for that year is 117.5. Real GDP is:

Accepted Answer

A)  $5,488 billion. 
B)  $6,163 billion. 
C)  $6,740 billion. 
D)  $7,789 billion. 
A)  $5,488 billion. 
B)  $6,163 billion. 
C)  $6,740 billion. 
D)  $7,789 billion.

Question 11

National income:

Accepted Answer

A)  is included in gross private domestic investment. 
B)  includes the sum of all payments made to resource owners for the use of their resources. 
C)  includes depreciation. 
D)  is often measured as C + I + G + (X − M). 
A)  is included in gross private domestic investment. 
B)  includes the sum of all payments made to resource owners for the use of their resources. 
C)  includes depreciation. 
D)  is often measured as C + I + G + (X − M).

Question 12

In the circular flow model,

Accepted Answer

A)  money flows from the firms to the households through the product market. 
B)  money flows from the households to the firms through the product market. 
C)  money flows from the households to the firms through the resource market. 
D)  money flows from the households to the firms through both the product market and the resource market. 
E)  resources flow to the households from the firms through the product market. 
A)  money flows from the firms to the households through the product market. 
B)  money flows from the households to the firms through the product market. 
C)  money flows from the households to the firms through the resource market. 
D)  money flows from the households to the firms through both the product market and the resource market. 
E)  resources flow to the households from the firms through the product market.

Question 13

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 14

In a given year, U.S. nominal GDP was $2,784 billion and the GDP chain price index for that year is 60.4. Real GDP is:

Accepted Answer

A)  $1,682 billion. 
B)  $4,609 billion. 
C)  $3,889 billion. 
D)  $4,000 billion. 
A)  $1,682 billion. 
B)  $4,609 billion. 
C)  $3,889 billion. 
D)  $4,000 billion.

Question 15

Which of the following correctly gives us national income (NI)?

Accepted Answer

A)  Gross domestic product minus depreciation. 
B)  Personal income minus personal taxes. 
C)  Net national product minus indirect business taxes. 
D)  Consumption plus investment plus government plus net exports. 
A)  Gross domestic product minus depreciation. 
B)  Personal income minus personal taxes. 
C)  Net national product minus indirect business taxes. 
D)  Consumption plus investment plus government plus net exports.

Question 16

Which one of the following is not a component of GDP, as measured using the expenditure approach?

Accepted Answer

A)  Personal consumption. 
B)  Exports. 
C)  Durable goods. 
D)  Government spending. 
E)  Interest. 
A)  Personal consumption. 
B)  Exports. 
C)  Durable goods. 
D)  Government spending. 
E)  Interest.

Question 17

The three components of personal consumption expenditures are:

Accepted Answer

A)  durable goods, nondurable goods, and services. 
B)  durable goods, food, and housing. 
C)  durable goods, nondurable goods, and housing. 
D)  durable goods, services, and food. 
E)  durable goods, services, and transportation. 
A)  durable goods, nondurable goods, and services. 
B)  durable goods, food, and housing. 
C)  durable goods, nondurable goods, and housing. 
D)  durable goods, services, and food. 
E)  durable goods, services, and transportation.

Question 18

Exhibit 11-6  GDP data (billions of dollars)   In Exhibit 11-6, personal income (PI) equals:

Accepted Answer

A)  $1,280 billion. 
B)  $2,290 billion. 
C)  $1,310 billion. 
D)  $2,320 billion. 
E)  $1,400 billion. 
A)  $1,280 billion. 
B)  $2,290 billion. 
C)  $1,310 billion. 
D)  $2,320 billion. 
E)  $1,400 billion.

Question 19

GDP includes:

Accepted Answer

A)  the negative attributes from erosion and deforested landscape. 
B)  all quality improvements resulting from higher quality goods replacing inferior goods. 
C)  the cleaning-up expenses associated with pollution. 
D)  the value of leisure time. 
E)  the illegal activities related to the underground economy. 
A)  the negative attributes from erosion and deforested landscape. 
B)  all quality improvements resulting from higher quality goods replacing inferior goods. 
C)  the cleaning-up expenses associated with pollution. 
D)  the value of leisure time. 
E)  the illegal activities related to the underground economy.

Question 20

Exhibit 11-2  Gross domestic product data   As shown in Exhibit 11-2, total expenditures by businesses for fixed investment and inventories is:

Accepted Answer

A)  $500 billion. 
B)  $50 billion. 
C)  $200 billion. 
D)  $15 billion. 
E)  $65 billion. 
A)  $500 billion. 
B)  $50 billion. 
C)  $200 billion. 
D)  $15 billion. 
E)  $65 billion.

Exam 11: Gross Domestic Product

Exhibit 11-9 GDP data (billions of dollars) In Exhibit 11-9, and using the expenditures approach, gross domestic product (GDP) equals:

In contrast with nominal GDP, real GDP refers to nominal GDP:

Which national income account should be examined to discover trends in the after-tax income that people have to save and spend?

Which of the following purchases would be counted as a final good in the GDP calculation?

Exhibit 11-8 GDP data (billions of dollars) In Exhibit 11-8, compute personal income (PI). Which of the following is correct?

To get Personal Income from National Income, one must:

Exhibit 11-1 Refer to Exhibit 11-1. What is this country's gross domestic product?

Which one of the following statements is true ?

Gross domestic product is the total dollar value at current prices of all final and intermediate goods produced by a nation during a given time period.

Suppose in a given year, GDP was $7,242 billion and the GDP chain price index for that year is 117.5. Real GDP is:

National income:

In the circular flow model,

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

In a given year, U.S. nominal GDP was $2,784 billion and the GDP chain price index for that year is 60.4. Real GDP is:

Which of the following correctly gives us national income (NI)?

Which one of the following is not a component of GDP, as measured using the expenditure approach?

The three components of personal consumption expenditures are:

Exhibit 11-6 GDP data (billions of dollars) In Exhibit 11-6, personal income (PI) equals:

GDP includes:

Exhibit 11-2 Gross domestic product data As shown in Exhibit 11-2, total expenditures by businesses for fixed investment and inventories is:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

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

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

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