Question 1

If the price index remains constant and nominal GDP increases, then

Accepted Answer

A)  real GDP has increased 
B)  real GDP has decreased 
C)  real GDP has remained constant 
D)  we are not sure what happened to real GDP 
A)  real GDP has increased 
B)  real GDP has decreased 
C)  real GDP has remained constant 
D)  we are not sure what happened to real GDP

Question 2

Which of the following is included in GDP?

Accepted Answer

A)  the payments to drug smugglers 
B)  expenditures on new military aircraft 
C)  the purchase of government securities and corporate stocks 
D)  unemployment compensation benefits paid to laid-off engineers 
A)  the payments to drug smugglers 
B)  expenditures on new military aircraft 
C)  the purchase of government securities and corporate stocks 
D)  unemployment compensation benefits paid to laid-off engineers

Question 3

In the base year, the GDP deflator always has a value of

Accepted Answer

A)  10 
B)  25 
C)  50 
D)  100 
A)  10 
B)  25 
C)  50 
D)  100

Question 4

Suppose that in the year 2007 real GDP is $9,000 billion and in 2008 real GDP is $9,300 billion. Hence, the rate of growth in real GDP between 2007 and 2008 is 3.3 percent.

Accepted Answer

A) True 
 B)False

Question 5

Critics cite Japan as a nation that was unsuccessful in achieving rapid growth following World War II as a result of industrial policy.

Accepted Answer

A) True 
 B)False

Question 6

According to the text, an exception to the "no such thing as a free lunch" concept is provided with

Accepted Answer

A)  outsourcing 
B)  the underground economy 
C)  technological gains 
D)  competitive pricing 
A)  outsourcing 
B)  the underground economy 
C)  technological gains 
D)  competitive pricing

Question 7

According to the "rule of 70," real GDP will double about every 23 years if real GDP grows at ______ per year:

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 8

If a newspaper headline indicates that U.S. net exports were $190 billion in 2004, it likely meant that

Accepted Answer

A)  U.S. exports were $190 billion and U.S. imports were zero 
B)  U.S. imports were $190 billion and U.S. exports were zero 
C)  U.S. exports exceeded U.S. imports by $190 billion 
D)  U.S. imports exceeded U.S. exports by $190 billion 
A)  U.S. exports were $190 billion and U.S. imports were zero 
B)  U.S. imports were $190 billion and U.S. exports were zero 
C)  U.S. exports exceeded U.S. imports by $190 billion 
D)  U.S. imports exceeded U.S. exports by $190 billion

Question 9

The concept of creative destruction is attributed to

Accepted Answer

A)  Adam Smith 
B)  Joseph Shumpeter 
C)  Henry Ford 
D)  Steve Jobs 
A)  Adam Smith 
B)  Joseph Shumpeter 
C)  Henry Ford 
D)  Steve Jobs

Question 10

A reduction in the price of energy would likely retard the economy's rate of growth.

Accepted Answer

A) True 
 B)False

Question 11

If a newspaper headline indicates that U.S. net exports were -$190 billion in 2010, it likely meant that

Accepted Answer

A)  U.S. exports were $190 billion and U.S. imports were zero 
B)  U.S. imports were $190 billion and U.S. exports were zero 
C)  U.S. exports exceeded U.S. imports by $190 billion 
D)  U.S. imports exceeded U.S. exports by $190 billion 
A)  U.S. exports were $190 billion and U.S. imports were zero 
B)  U.S. imports were $190 billion and U.S. exports were zero 
C)  U.S. exports exceeded U.S. imports by $190 billion 
D)  U.S. imports exceeded U.S. exports by $190 billion

Question 12

GDP accountants would classify ______ as a final product.

Accepted Answer

A)  a tank purchased by the Department of Defense 
B)  auto CD-players purchased by General Motors 
C)  antiques purchased by a dealer 
D)  cheese purchased by a pizza restaurant 
A)  a tank purchased by the Department of Defense 
B)  auto CD-players purchased by General Motors 
C)  antiques purchased by a dealer 
D)  cheese purchased by a pizza restaurant

Question 13

What can we say about less-developed countries such as Mexico or China?

Accepted Answer

A)  They are overutilizing their capital and labor inputs. 
B)  They are already using state-of-the-art technologies. 
C)  They have reached their productive capacities so have to rely on foreign investment. 
D)  They have the potential to grow rapidly by increasing input use and efficiency. 
A)  They are overutilizing their capital and labor inputs. 
B)  They are already using state-of-the-art technologies. 
C)  They have reached their productive capacities so have to rely on foreign investment. 
D)  They have the potential to grow rapidly by increasing input use and efficiency.

Question 14

The most widely used measure of an economy's output is

Accepted Answer

A)  gross state product 
B)  gross domestic product 
C)  net state product 
D)  net domestic product 
A)  gross state product 
B)  gross domestic product 
C)  net state product 
D)  net domestic product

Question 15

Suppose that in the year 2012, nominal GDP is $9,000 billion and the GDP deflator is 126.5. Then real GDP in constant (base year) prices equals

Accepted Answer

A)  $7,115 billion 
B)  $7,880 billion 
C)  $8,254 billion 
D)  $8,789 billion 
A)  $7,115 billion 
B)  $7,880 billion 
C)  $8,254 billion 
D)  $8,789 billion

Question 16

The calculation of this year's gross domestic product would include

Accepted Answer

A)  the purchase of a new automobile 
B)  unemployment compensation benefits received by a former steel worker 
C)  the money Alice receives when she sells her bicycle to Fred 
D)  the services of a lawyer when he cleans his own apartment 
A)  the purchase of a new automobile 
B)  unemployment compensation benefits received by a former steel worker 
C)  the money Alice receives when she sells her bicycle to Fred 
D)  the services of a lawyer when he cleans his own apartment

Question 17

Suppose that from 2008 to 2013, nominal GDP increased from $7,000 billion to $8,000 billion. However, the GDP deflator increased from 100 to 115 over this period. We can conclude that real GDP increased over this period.

Accepted Answer

A) True 
 B)False

Question 18

If a country has few natural resources, it cannot become wealthy.

Accepted Answer

A) True 
 B)False

Question 19

Nominal GDP is measured in final prices and real GDP is measured in intermediate prices.

Accepted Answer

A) True 
 B)False

Question 20

Concerning the calculation of GDP, all of the following are classified as gross private domestic investment except the

Accepted Answer

A)  construction of a new science building by the University of Michigan 
B)  purchase of 50 automobiles by Hertz Rent-a-Car 
C)  purchase of new auto-assembly machinery by Ford Motor Co. 
D)  purchase of 50 shares by General Electric stock by a librarian 
A)  construction of a new science building by the University of Michigan 
B)  purchase of 50 automobiles by Hertz Rent-a-Car 
C)  purchase of new auto-assembly machinery by Ford Motor Co. 
D)  purchase of 50 shares by General Electric stock by a librarian

If the price index remains constant and nominal GDP increases, then

Which of the following is included in GDP?

In the base year, the GDP deflator always has a value of

Suppose that in the year 2007 real GDP is $9,000 billion and in 2008 real GDP is $9,300 billion. Hence, the rate of growth in real GDP between 2007 and 2008 is 3.3 percent.

Critics cite Japan as a nation that was unsuccessful in achieving rapid growth following World War II as a result of industrial policy.

According to the text, an exception to the "no such thing as a free lunch" concept is provided with

According to the "rule of 70," real GDP will double about every 23 years if real GDP grows at ______ per year:

If a newspaper headline indicates that U.S. net exports were $190 billion in 2004, it likely meant that

The concept of creative destruction is attributed to

A reduction in the price of energy would likely retard the economy's rate of growth.

If a newspaper headline indicates that U.S. net exports were -$190 billion in 2010, it likely meant that

GDP accountants would classify ______ as a final product.

What can we say about less-developed countries such as Mexico or China?

The most widely used measure of an economy's output is

Suppose that in the year 2012, nominal GDP is $9,000 billion and the GDP deflator is 126.5. Then real GDP in constant (base year) prices equals

The calculation of this year's gross domestic product would include

Suppose that from 2008 to 2013, nominal GDP increased from $7,000 billion to $8,000 billion. However, the GDP deflator increased from 100 to 115 over this period. We can conclude that real GDP increased over this period.

If a country has few natural resources, it cannot become wealthy.

Nominal GDP is measured in final prices and real GDP is measured in intermediate prices.

Concerning the calculation of GDP, all of the following are classified as gross private domestic investment except the

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 10: Gross Domestic Product and Economic Growth

If the price index remains constant and nominal GDP increases, then

Which of the following is included in GDP?

In the base year, the GDP deflator always has a value of

Suppose that in the year 2007 real GDP is $9,000 billion and in 2008 real GDP is $9,300 billion. Hence, the rate of growth in real GDP between 2007 and 2008 is 3.3 percent.

Critics cite Japan as a nation that was unsuccessful in achieving rapid growth following World War II as a result of industrial policy.

According to the text, an exception to the "no such thing as a free lunch" concept is provided with

According to the "rule of 70," real GDP will double about every 23 years if real GDP grows at ______ per year:

If a newspaper headline indicates that U.S. net exports were $190 billion in 2004, it likely meant that

The concept of creative destruction is attributed to

A reduction in the price of energy would likely retard the economy's rate of growth.

If a newspaper headline indicates that U.S. net exports were -$190 billion in 2010, it likely meant that

GDP accountants would classify ______ as a final product.

What can we say about less-developed countries such as Mexico or China?

The most widely used measure of an economy's output is

Suppose that in the year 2012, nominal GDP is $9,000 billion and the GDP deflator is 126.5. Then real GDP in constant (base year) prices equals

The calculation of this year's gross domestic product would include

Suppose that from 2008 to 2013, nominal GDP increased from $7,000 billion to $8,000 billion. However, the GDP deflator increased from 100 to 115 over this period. We can conclude that real GDP increased over this period.

If a country has few natural resources, it cannot become wealthy.

Nominal GDP is measured in final prices and real GDP is measured in intermediate prices.

Concerning the calculation of GDP, all of the following are classified as gross private domestic investment except the

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters