Question 1

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Accepted Answer

A) average hours worked per week increased. 
B) amount of pollution decreased. 
C) price level increased. 
D) crime rate decreased. 
A) average hours worked per week increased. 
B) amount of pollution decreased. 
C) price level increased. 
D) crime rate decreased.

Question 2

Residential investment includes spending by firms on office buildings.

Accepted Answer

A) True 
 B)False

Question 3

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi

Question 4

Legalizing all forms of illegal activities

Accepted Answer

A) reduces GDP and the size of the underground economy. 
B) reduces GDP and increases the size of the underground economy. 
C) increases GDP and reduces the size of the underground economy. 
D) increases GDP and increases the size of the underground economy. 
A) reduces GDP and the size of the underground economy. 
B) reduces GDP and increases the size of the underground economy. 
C) increases GDP and reduces the size of the underground economy. 
D) increases GDP and increases the size of the underground economy.

Question 5

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Accepted Answer

A) GDP rises by $1,875. 
B) GDP is not affected by Scott's production of the jewelry box. 
C) GDP rises by $125. 
D) GDP falls by $1,875. 
A) GDP rises by $1,875. 
B) GDP is not affected by Scott's production of the jewelry box. 
C) GDP rises by $125. 
D) GDP falls by $1,875.

Question 6

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

Accepted Answer

A) the value of the house in 2014 
B) the value of the house in 2003 
C) the value of the house in 2014 minus depreciation 
D) the value of the services of the real estate agent 
A) the value of the house in 2014 
B) the value of the house in 2003 
C) the value of the house in 2014 minus depreciation 
D) the value of the services of the real estate agent

Question 7

If an American firm opens a production facility in India,the total value of the production will be included in the

Accepted Answer

A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India. 
A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India.

Question 8

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Accepted Answer

A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent 
A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent

Question 9

The factors of production include

Accepted Answer

A) wages. 
B) capital. 
C) investment. 
D) transfers. 
A) wages. 
B) capital. 
C) investment. 
D) transfers.

Question 10

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Accepted Answer

Consider the value of an iPhone which co

Question 11

Which of the following is included in both the U.S.GDP and U.S.GNP?

Accepted Answer

A) the value of all cars produced by General Motors in the United States 
B) the value of all cars produced by Ford in Mexico 
C) the value of all cars produced by Toyota in the United States 
D) the value of all cars produced by Nissan in Japan and the United States 
A) the value of all cars produced by General Motors in the United States 
B) the value of all cars produced by Ford in Mexico 
C) the value of all cars produced by Toyota in the United States 
D) the value of all cars produced by Nissan in Japan and the United States

Question 12

Table 12-13
 $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Oranges } \
\text { Produced }
\end{array} & \begin{array} { c } 
\text { Price af } \
\text { Oranges }
\end{array} & \begin{array} { c } 
\text { Shirts } \
\text { Prodiced }
\end{array} & \begin{array} { c } 
\text { Price af } \
\text { Shirts }
\end{array} \
\hline 2009 & 1,800 & \$ 0.90 & 110 & \$ 30.00 \
\hline 2011 & 2,000 & 1.00 & 110 & 35.00 \
\hline
\end{array}$$ 
Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts.
-Refer to Table 12-13.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Accepted Answer

A) $4,620. 
B) $5,100. 
C) $5,650. 
D) $5,850. 
A) $4,620. 
B) $5,100. 
C) $5,650. 
D) $5,850.

Question 13

Macroeconomics seeks to understand

Accepted Answer

A) economic growth, business cycles, and inflation. 
B) industry sales, marketing strategies and corporate growth. 
C) product demand, product cost, and profit maximization. 
D) public choices, private choices, and consumer maximization. 
A) economic growth, business cycles, and inflation. 
B) industry sales, marketing strategies and corporate growth. 
C) product demand, product cost, and profit maximization. 
D) public choices, private choices, and consumer maximization.

Question 14

Real GDP is GDP in a given year

Accepted Answer

A) adjusted only for anticipated inflation. 
B) adjusted only for unanticipated inflation. 
C) valued in the prices of that year. 
D) valued in the prices of the base year. 
A) adjusted only for anticipated inflation. 
B) adjusted only for unanticipated inflation. 
C) valued in the prices of that year. 
D) valued in the prices of the base year.

Question 15

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from ________ in 2013 to ________ in 2014.

Accepted Answer

A) 105; 115 
B) 200; 205 
C) 400; 420 
D) 375; 390 
A) 105; 115 
B) 200; 205 
C) 400; 420 
D) 375; 390

Question 16

The drawback to calculating real GDP using base-year prices is that

Accepted Answer

A) real GDP in one year is not comparable to real GDP in another year. 
B) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C) relative prices change over time and these changes are reflected in base-year prices. 
D) quality changes are reflected in base-year prices. 
A) real GDP in one year is not comparable to real GDP in another year. 
B) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C) relative prices change over time and these changes are reflected in base-year prices. 
D) quality changes are reflected in base-year prices.

Question 17

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Accepted Answer

China is not better off because of highe

Question 18

Table 12-16
 $$\begin{array} { | l | r | r | } 
\hline & \mathbf { 2 0 1 2 } & { \mathbf { 2 0 1 3 } } \
\hline \text { Nominal GDP } & \$ 10,000 & \$ 12,000 \
\hline \text { Real GDP } & 9,500 & 10,500 \
\hline
\end{array}$$
-Refer to Table 12-16.Given the information above,what can we say has happened in the economy from 2012 to 2013?

Accepted Answer

A) The price level has fallen. 
B) The price level has risen. 
C) The price level has remained constant. 
D) Not enough information is available to determine what has happened to prices. 
A) The price level has fallen. 
B) The price level has risen. 
C) The price level has remained constant. 
D) Not enough information is available to determine what has happened to prices.

Question 19

Nominal GDP will increase

Accepted Answer

A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level or the quantity of goods and services produced rises. 
A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level or the quantity of goods and services produced rises.

Question 20

The output of Mexican citizens who work in Texas would be included in the

Accepted Answer

A) gross domestic product of Mexico. 
B) gross national product of Mexico. 
C) gross national product of the United States. 
D) net national product of the United States. 
A) gross domestic product of Mexico. 
B) gross national product of Mexico. 
C) gross national product of the United States. 
D) net national product of the United States.

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Residential investment includes spending by firms on office buildings.

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Legalizing all forms of illegal activities

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

If an American firm opens a production facility in India,the total value of the production will be included in the

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

The factors of production include

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Which of the following is included in both the U.S.GDP and U.S.GNP?

Macroeconomics seeks to understand

Real GDP is GDP in a given year

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from in 2013 to in 2014.

The drawback to calculating real GDP using base-year prices is that

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Table 12-16 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-16.Given the information above,what can we say has happened in the economy from 2012 to 2013?

Nominal GDP will increase

The output of Mexican citizens who work in Texas would be included in the

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 12: Gdp: Measuring Total Production and Income

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Residential investment includes spending by firms on office buildings.

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Legalizing all forms of illegal activities

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

If an American firm opens a production facility in India,the total value of the production will be included in the

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

The factors of production include

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Which of the following is included in both the U.S.GDP and U.S.GNP?

Macroeconomics seeks to understand

Real GDP is GDP in a given year

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from ________ in 2013 to ________ in 2014.

The drawback to calculating real GDP using base-year prices is that

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Table 12-16 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-16.Given the information above,what can we say has happened in the economy from 2012 to 2013?

Nominal GDP will increase

The output of Mexican citizens who work in Texas would be included in the

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from in 2013 to in 2014.