Question 1

GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services.

Accepted Answer

A) True 
 B)False  False

Question 2

The table given below shows various stages of production of a Corvette, a sports car produced by General Motors Company (GMC):?
  
-According to Table 5.2, the value added by the dealer is:

Accepted Answer

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. B

Question 3

The table given below reports the sales value at each stage of production of the soft drink, Pepsi.?
  
-Refer to Table 5.3. Compute GDP according to the income approach if Pepsi is assumed to be the only good produced in the economy.

Accepted Answer

A)  $1.05 
B)  $0.05 
C)  $0.20 
D)  $0.60 
E)  $0.40 
A)  $1.05 
B)  $0.05 
C)  $0.20 
D)  $0.60 
E)  $0.40 D

Question 4

The table given below reports the value of the different economic variables of a nation during a year.?
  
-Refer to Table 5.5. For the economy described in the table above, disposable personal income is:

Accepted Answer

A)  $1,440. 
B)  $1,630. 
C)  $1,550. 
D)  $1,610. 
E)  $1,870. 
A)  $1,440. 
B)  $1,630. 
C)  $1,550. 
D)  $1,610. 
E)  $1,870.

Question 5

National income is the sum of:

Accepted Answer

A)  personal income and personal tax payments. 
B)  proprietors' income, rental income, compensation of employees, corporate profits, and interest receipts, net of indirect business taxes and the capital consumption allowance. 
C)  wages, transfer payments, interest paid to businesses, and tax revenue. 
D)  NNP and the capital consumption allowance. 
E)  consumption, investment, government spending, and net exports. 
A)  personal income and personal tax payments. 
B)  proprietors' income, rental income, compensation of employees, corporate profits, and interest receipts, net of indirect business taxes and the capital consumption allowance. 
C)  wages, transfer payments, interest paid to businesses, and tax revenue. 
D)  NNP and the capital consumption allowance. 
E)  consumption, investment, government spending, and net exports.

Question 6

The table given below reports the value of sales at each stage of production of an economics book.?
  
-Refer to Table 5.1. Compute the market price of an economics book.

Accepted Answer

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

Question 7

The value added approach involves adding up the value of the final product and the value of intermediate goods used in the production process.

Accepted Answer

A) True 
 B)False

Question 8

The price index for the current year is 180. This means that, on average, prices in the current year are:

Accepted Answer

A)  80 percent of prices in the base year. 
B)  $1.80 higher than prices in the base year. 
C)  180 percent higher than prices in the base year. 
D)  $0.80 higher than prices in the base year. 
E)  80 percent higher than prices in the base year. 
A)  80 percent of prices in the base year. 
B)  $1.80 higher than prices in the base year. 
C)  180 percent higher than prices in the base year. 
D)  $0.80 higher than prices in the base year. 
E)  80 percent higher than prices in the base year.

Question 9

Which of the following would not be included as part of personal income?

Accepted Answer

A)  Welfare benefits 
B)  Food stamps distributed by the government 
C)  Social security benefits 
D)  Indirect business taxes 
E)  Corporate dividend payments to stockholders 
A)  Welfare benefits 
B)  Food stamps distributed by the government 
C)  Social security benefits 
D)  Indirect business taxes 
E)  Corporate dividend payments to stockholders

Question 10

The total expenditure on goods and services in a country must be the same as the total income earned from selling goods and services because:

Accepted Answer

A)  the government's annual budget has to balance. 
B)  net exports in an economy is usually zero. 
C)  one sector's expenditures are another sector's income. 
D)  total investment in an economy always equals total saving. 
E)  the sum of consumption spending and saving is zero. 
A)  the government's annual budget has to balance. 
B)  net exports in an economy is usually zero. 
C)  one sector's expenditures are another sector's income. 
D)  total investment in an economy always equals total saving. 
E)  the sum of consumption spending and saving is zero.

Question 11

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

Accepted Answer

A)  4 percent 
B)  11 percent 
C)  25 percent 
D)  57 percent 
E)  75 percent 
A)  4 percent 
B)  11 percent 
C)  25 percent 
D)  57 percent 
E)  75 percent

Question 12

According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment.

Accepted Answer

A) True 
 B)False

Question 13

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.?
  
-Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 2003 as the base year?

Accepted Answer

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

Question 14

The income that is available to individuals for consumption or investment is called disposable income.

Accepted Answer

A) True 
 B)False

Question 15

If net investment spending in a nation is zero, we can conclude that:

Accepted Answer

A)  gross investment exceeds the capital consumption allowance. 
B)  the capital consumption allowance exceeds gross investment. 
C)  imports equal exports. 
D)  gross investment equals the capital consumption allowance. 
E)  no investment goods were produced in the economy. 
A)  gross investment exceeds the capital consumption allowance. 
B)  the capital consumption allowance exceeds gross investment. 
C)  imports equal exports. 
D)  gross investment equals the capital consumption allowance. 
E)  no investment goods were produced in the economy.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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:

Accepted Answer

A)  $236 billion. 
B)  $249 billion. 
C)  $251 billion. 
D)  $279 billion. 
E)  $290 billion. 
A)  $236 billion. 
B)  $249 billion. 
C)  $251 billion. 
D)  $279 billion. 
E)  $290 billion.

Question 18

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.?
  
-Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?

Accepted Answer

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

Question 19

The services of a husband or wife as a homemaker and cash gains from a lottery are included in the calculation of gross domestic product.

Accepted Answer

A) True 
 B)False

Question 20

Wheat produced in the U.S. but sold in Japan would not be included while calculating the U.S. GDP.

Accepted Answer

A) True 
 B)False

GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services.

The table given below shows various stages of production of a Corvette, a sports car produced by General Motors Company (GMC):? -According to Table 5.2, the value added by the dealer is:

The table given below reports the sales value at each stage of production of the soft drink, Pepsi.? -Refer to Table 5.3. Compute GDP according to the income approach if Pepsi is assumed to be the only good produced in the economy.

The table given below reports the value of the different economic variables of a nation during a year.? -Refer to Table 5.5. For the economy described in the table above, disposable personal income is:

National income is the sum of:

The table given below reports the value of sales at each stage of production of an economics book.? -Refer to Table 5.1. Compute the market price of an economics book.

The value added approach involves adding up the value of the final product and the value of intermediate goods used in the production process.

The price index for the current year is 180. This means that, on average, prices in the current year are:

Which of the following would not be included as part of personal income?

The total expenditure on goods and services in a country must be the same as the total income earned from selling goods and services because:

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

According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment.

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.? -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 2003 as the base year?

The income that is available to individuals for consumption or investment is called disposable income.

If net investment spending in a nation is zero, we can conclude that:

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

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.? -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?

The services of a husband or wife as a homemaker and cash gains from a lottery are included in the calculation of gross domestic product.

Wheat produced in the U.S. but sold in Japan would not be included while calculating the U.S. GDP.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

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Exam 5: National Income Accounting

GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services.

The table given below shows various stages of production of a Corvette, a sports car produced by General Motors Company (GMC):? -According to Table 5.2, the value added by the dealer is:

The table given below reports the sales value at each stage of production of the soft drink, Pepsi.? -Refer to Table 5.3. Compute GDP according to the income approach if Pepsi is assumed to be the only good produced in the economy.

The table given below reports the value of the different economic variables of a nation during a year.? -Refer to Table 5.5. For the economy described in the table above, disposable personal income is:

National income is the sum of:

The table given below reports the value of sales at each stage of production of an economics book.? -Refer to Table 5.1. Compute the market price of an economics book.

The value added approach involves adding up the value of the final product and the value of intermediate goods used in the production process.

The price index for the current year is 180. This means that, on average, prices in the current year are:

Which of the following would not be included as part of personal income?

The total expenditure on goods and services in a country must be the same as the total income earned from selling goods and services because:

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

According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment.

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.? -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 2003 as the base year?

The income that is available to individuals for consumption or investment is called disposable income.

If net investment spending in a nation is zero, we can conclude that:

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

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.? -Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?

The services of a husband or wife as a homemaker and cash gains from a lottery are included in the calculation of gross domestic product.

Wheat produced in the U.S. but sold in Japan would not be included while calculating the U.S. GDP.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

Filters