Question 1

In periods when prices are falling on average:

Accepted Answer

A) real GDP will grow slower than nominal GDP. 
B) real GDP will grow faster than nominal GDP. 
C) real GDP will grow as fast as nominal GDP. 
D) we cannot calculate real GDP. 
A) real GDP will grow slower than nominal GDP. 
B) real GDP will grow faster than nominal GDP. 
C) real GDP will grow as fast as nominal GDP. 
D) we cannot calculate real GDP.

Question 2

If Anton sells his 2004 Honda Accord for $5 500 in 2018, the sale of his car contributes $5 500 to GDP in 2018.

Accepted Answer

A) True 
 B)False

Question 3

Do countries produce more or less pollution as GDP grows?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

There is no definitive answer, and the a

Question 4

How are 'intermediate goods' treated in the calculation of GDP?

Accepted Answer

A) Their value is not counted separately, but included as part of the value of the final good of which they are an input. 
B) Their value is counted separately, and their value is also included as part of the value of the final good of which they are an input. 
C) They are included in the year that they are produced. 
D) They are included only if they are imported. 
A) Their value is not counted separately, but included as part of the value of the final good of which they are an input. 
B) Their value is counted separately, and their value is also included as part of the value of the final good of which they are an input. 
C) They are included in the year that they are produced. 
D) They are included only if they are imported.

Question 5

Which of the following is an example of a 'transfer payment'?

Accepted Answer

A) A teacher's pay being transferred electronically from the government to the teacher. 
B) An unemployment benefit. 
C) Interest repayments on a loan. 
D) The purchase of a new government office block. 
A) A teacher's pay being transferred electronically from the government to the teacher. 
B) An unemployment benefit. 
C) Interest repayments on a loan. 
D) The purchase of a new government office block.

Question 6

Scott is a woodworker and charges $150 an hour for his time manufacturing custom-made wood products. For his wife's birthday, he designs and creates an intricate birds-eye maple jewellery box that takes him 20 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 $3 000. 
B) GDP is not affected by Scott's production of the jewellery box. 
C) GDP rises by $150. 
D) GDP falls by $3 000. 
A) GDP rises by $3 000. 
B) GDP is not affected by Scott's production of the jewellery box. 
C) GDP rises by $150. 
D) GDP falls by $3 000.

Question 7

Why do we subtract import spending from total expenditures?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

When we total up consumption expenditure

Question 8

Give reasons why measured GDP does not reflect total production in an economy.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The measure of GDP leaves out production

Question 9

The GDP deflator only measures the prices of the consumer and investment components of GDP, and does not include the prices of government goods and services.

Accepted Answer

A) True 
 B)False

Question 10

The Australian Bureau of Statistics divides its statistics on GDP into four major categories. List the categories of expenditures and describe each.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The largest category of expenditure is '

Question 11

What is the 'gross domestic product' of a country?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The market value of all final

Question 12

If an Australian firm produces televisions in China, that production should count toward:

Accepted Answer

A) Australia's GDP. 
B) China's GNI. 
C) Australia's GNI. 
D) It will not affect either Australia's GNI or Australia's GDP. 
A) Australia's GDP. 
B) China's GNI. 
C) Australia's GNI. 
D) It will not affect either Australia's GNI or Australia's GDP.

Question 13

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

Accepted Answer

A) True 
 B)False

Question 14

If nominal GDP is less than real GDP, then the GDP deflator will be less than 100.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following transactions would take place in the 'underground economy'?

Accepted Answer

A) Elizabeth tells her mother she's going to work but really goes to see a movie. 
B) Paul buys 15 litres of petrol for $1.45 per litre, not realising that 40 cents per litre of that price goes to the government as tax revenue. 
C) John makes chain-link belts and necklaces and sells them at a local market for cash to avoid paying taxes. 
D) Matt bought an iPhone for $400 but decided to sell it on eBay instead of keeping it. 
A) Elizabeth tells her mother she's going to work but really goes to see a movie. 
B) Paul buys 15 litres of petrol for $1.45 per litre, not realising that 40 cents per litre of that price goes to the government as tax revenue. 
C) John makes chain-link belts and necklaces and sells them at a local market for cash to avoid paying taxes. 
D) Matt bought an iPhone for $400 but decided to sell it on eBay instead of keeping it.

Question 16

Macroeconomics involves the economic issues of:

Accepted Answer

A) how the economy should organise resources within a particular industry. 
B) how to generate full employment, price stability and maintain long-term economic growth. 
C) how firms choose the prices they should charge for their products. 
D) profit maximisation by firms. 
A) how the economy should organise resources within a particular industry. 
B) how to generate full employment, price stability and maintain long-term economic growth. 
C) how firms choose the prices they should charge for their products. 
D) profit maximisation by firms.

Question 17

What is the largest component of GDP in Australia, as measured by the 'expenditure method'?

Accepted Answer

A) net exports 
B) government expenditure 
C) consumption expenditure 
D) investment expenditure 
A) net exports 
B) government expenditure 
C) consumption expenditure 
D) investment expenditure

Question 18

The circular-flow diagram shows that:

Accepted Answer

A) the value of total income is equal to the total value of expenditures on final goods and services. 
B) firms pay households wages, and households receive transfer payments from firms. 
C) households spend all their income on goods and services. 
D) GDP will be less than the total value of expenditures on final goods and services in the economy. 
A) the value of total income is equal to the total value of expenditures on final goods and services. 
B) firms pay households wages, and households receive transfer payments from firms. 
C) households spend all their income on goods and services. 
D) GDP will be less than the total value of expenditures on final goods and services in the economy.

Question 19

Refer to Table 4.1 for the following questions.
Table 4.1 A very simple economy producing three goods: movies, burgers and bikes.

-Refer to Table 4.1. What is nominal GDP in 2017?

Accepted Answer

A) $3 320 
B) $3 690 
C) $6 360 
D) $7 035 
A) $3 320 
B) $3 690 
C) $6 360 
D) $7 035

Question 20

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

Accepted Answer

A) True 
 B)False

In periods when prices are falling on average:

If Anton sells his 2004 Honda Accord for $5 500 in 2018, the sale of his car contributes $5 500 to GDP in 2018.

Do countries produce more or less pollution as GDP grows? _ _

How are 'intermediate goods' treated in the calculation of GDP?

Which of the following is an example of a 'transfer payment'?

Why do we subtract import spending from total expenditures? _ _

Give reasons why measured GDP does not reflect total production in an economy. _ _

The GDP deflator only measures the prices of the consumer and investment components of GDP, and does not include the prices of government goods and services.

The Australian Bureau of Statistics divides its statistics on GDP into four major categories. List the categories of expenditures and describe each. _ _

What is the 'gross domestic product' of a country? _ _

If an Australian firm produces televisions in China, that production should count toward:

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

If nominal GDP is less than real GDP, then the GDP deflator will be less than 100.

Which of the following transactions would take place in the 'underground economy'?

Macroeconomics involves the economic issues of:

What is the largest component of GDP in Australia, as measured by the 'expenditure method'?

The circular-flow diagram shows that:

Refer to Table 4.1 for the following questions. Table 4.1 A very simple economy producing three goods: movies, burgers and bikes. -Refer to Table 4.1. What is nominal GDP in 2017?

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 4: Gdp: Measuring Total Production, Income and Economic Growth

In periods when prices are falling on average:

If Anton sells his 2004 Honda Accord for $5 500 in 2018, the sale of his car contributes $5 500 to GDP in 2018.

Do countries produce more or less pollution as GDP grows? _____________________________________________________________________________________________ _____________________________________________________________________________________________

How are 'intermediate goods' treated in the calculation of GDP?

Which of the following is an example of a 'transfer payment'?

Why do we subtract import spending from total expenditures? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Give reasons why measured GDP does not reflect total production in an economy. _____________________________________________________________________________________________ _____________________________________________________________________________________________

The GDP deflator only measures the prices of the consumer and investment components of GDP, and does not include the prices of government goods and services.

What is the 'gross domestic product' of a country? _____________________________________________________________________________________________ _____________________________________________________________________________________________

If an Australian firm produces televisions in China, that production should count toward:

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

If nominal GDP is less than real GDP, then the GDP deflator will be less than 100.

Which of the following transactions would take place in the 'underground economy'?

Macroeconomics involves the economic issues of:

What is the largest component of GDP in Australia, as measured by the 'expenditure method'?

The circular-flow diagram shows that:

Refer to Table 4.1 for the following questions. Table 4.1 A very simple economy producing three goods: movies, burgers and bikes. -Refer to Table 4.1. What is nominal GDP in 2017?

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Do countries produce more or less pollution as GDP grows? _ _

Why do we subtract import spending from total expenditures? _ _

Give reasons why measured GDP does not reflect total production in an economy. _ _

What is the 'gross domestic product' of a country? _ _