Question 1

To calculate GDP when using the income approach,you must add indirect business taxes and depreciation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is correct?

Accepted Answer

A)  Aggregate expenditure equals GDP but is less than aggregate income. 
B)  Aggregate income is greater than GDP but equal to aggregate expenditure. 
C)  Aggregate income is greater than aggregate expenditure but equal to GDP. 
D)  Aggregate income, aggregate expenditure and GDP are all equal. 
A)  Aggregate expenditure equals GDP but is less than aggregate income. 
B)  Aggregate income is greater than GDP but equal to aggregate expenditure. 
C)  Aggregate income is greater than aggregate expenditure but equal to GDP. 
D)  Aggregate income, aggregate expenditure and GDP are all equal.

Question 3

All of the following household expenditures are included in consumption expenditure EXCEPT

Accepted Answer

A)  payment to a dentist for filling a tooth. 
B)  purchase of corporate stock. 
C)  purchase of a new purse. 
D)  purchase of hair styling. 
A)  payment to a dentist for filling a tooth. 
B)  purchase of corporate stock. 
C)  purchase of a new purse. 
D)  purchase of hair styling.

Question 4

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false?
Explain your answer.

Accepted Answer

The sentence is false.To calculate GDP,e

Question 5

Real GDP can be criticized as a measure of economic welfare because it

Accepted Answer

A)  does not include the value of products produced in the household. 
B)  does not take account of the degradation of environmental quality. 
C)  does not include leisure time available to a society. 
D)  All of the above answers are correct. 
A)  does not include the value of products produced in the household. 
B)  does not take account of the degradation of environmental quality. 
C)  does not include leisure time available to a society. 
D)  All of the above answers are correct.

Question 6

Net exports is negative if

Accepted Answer

A)  the value of exports exceeds the value of imports. 
B)  the value of imports exceeds the value of exports. 
C)  the tariff payments are included in the value of imported and exported items. 
D)  too much production occurs in the exporting country during the year. 
A)  the value of exports exceeds the value of imports. 
B)  the value of imports exceeds the value of exports. 
C)  the tariff payments are included in the value of imported and exported items. 
D)  too much production occurs in the exporting country during the year.

Question 7

Real GDP measures the

Accepted Answer

A)  total profits earned by all businesses valued using prices from a single year. 
B)  changes in the prices of output measured in dollars. 
C)  general upward drift in prices. 
D)  value of total production linked to prices of a single year. 
A)  total profits earned by all businesses valued using prices from a single year. 
B)  changes in the prices of output measured in dollars. 
C)  general upward drift in prices. 
D)  value of total production linked to prices of a single year.

Question 8

Which of the following is TRUE regarding the chain-weighted output index method?
I. It is the method used to measure the growth rate of nominal GDP.
II. It uses data from the current year and from the previous year.
III. It is a method of measuring the growth rate of real GDP.

Accepted Answer

A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II and III 
A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II and III

Question 9

The expenditure approach to measuring GDP includes firms' spending on wages.

Accepted Answer

A) True 
 B)False

Question 10

Gross investment equals

Accepted Answer

A)  net investment - depreciation + change in inventories. 
B)  net investment + depreciation. 
C)  net investment + change in inventories. 
D)  depreciation + change in inventories. 
A)  net investment - depreciation + change in inventories. 
B)  net investment + depreciation. 
C)  net investment + change in inventories. 
D)  depreciation + change in inventories.

Question 11

What is the relationship between gross investment,net investment,and depreciation?
Which measures the change in the capital stock?

Accepted Answer

Gross investment minus depreciation equa

Question 12

-In the above figure,household income is shown by flow

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  F.

Question 13

Can nominal GDP ever be less than real GDP?

Accepted Answer

Yes,nominal GDP can be less than real GD

Question 14

Real GDP fluctuates from year to year but is always below potential GDP.

Accepted Answer

A) True 
 B)False

Question 15

Let C represent consumption expenditure,S saving,I gross private domestic investment,G government expenditure on goods and services,and X - M net exports of goods and services.Then GDP equals

Accepted Answer

A)  C + S + G + X - M. 
B)  C + S + G - X - M. 
C)  C + I + G + X - M. 
D)  C + I + G - X - M. 
A)  C + S + G + X - M. 
B)  C + S + G - X - M. 
C)  C + I + G + X - M. 
D)  C + I + G - X - M.

Question 16

Compensation paid to employees represented ________ of GDP for the United States in 2012.

Accepted Answer

A)  about 5 percent 
B)  approximately 15 percent 
C)  35 percent 
D)  more than 50 percent 
A)  about 5 percent 
B)  approximately 15 percent 
C)  35 percent 
D)  more than 50 percent

Question 17

-According to the graph in the figure above,which year experienced the most rapid change in employment?

Accepted Answer

A)  Year 2 
B)  Year 3 
C)  Year 4 
D)  Year 5 
A)  Year 2 
B)  Year 3 
C)  Year 4 
D)  Year 5

Question 18

"Life expectancy is exceptionally high in Japan. Scores for political freedom and civil liberties approach those of peer countries in Europe...equality of opportunity is extremely weak. The country also possesses one of the longer working weeks." Japan's GDP was estimated to be $4.2 trillion (purchasing power parity) and the population was 127.4 million.
"Driven by its attractive climate, Brazil performs substantially better on Life Satisfaction than Material Wealth. High international demand for Brazil's commodities and raw materials has produced a sustained economic expansion since 2004, which in turn has led to job creation, wage growth and relatively low inflation. Brazilians report that they control their own lives to a substantial degree." Brazil's GDP was estimated to be $1.7 trillion (purchasing power parity) and 190 million in 2006.
www.prosperity.com
-According to the information,Japan's real GDP per person

Accepted Answer

A)  is higher than Brazil's and therefore we can definitely conclude that economic well-being is higher in Japan. 
B)  is $33,000. 
C)  is lower than Brazil's, but its real GDP is higher which makes standard of living higher in Japan. 
D)  cannot be expected to change much given the other factors affecting GDP growth including political freedom and life expectancy. 
A)  is higher than Brazil's and therefore we can definitely conclude that economic well-being is higher in Japan. 
B)  is $33,000. 
C)  is lower than Brazil's, but its real GDP is higher which makes standard of living higher in Japan. 
D)  cannot be expected to change much given the other factors affecting GDP growth including political freedom and life expectancy.

Question 19

Explain how GDP is measured according to the expenditure and income approaches.

Accepted Answer

GDP is measured using the expenditure ap

Question 20

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the ________ method of calculating real GDP.

Accepted Answer

A)  base-year 
B)  moving-base-year 
C)  chain-weighted output index 
D)  fixed quantities/variable prices 
A)  base-year 
B)  moving-base-year 
C)  chain-weighted output index 
D)  fixed quantities/variable prices

To calculate GDP when using the income approach,you must add indirect business taxes and depreciation.

Which of the following is correct?

All of the following household expenditures are included in consumption expenditure EXCEPT

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

Real GDP can be criticized as a measure of economic welfare because it

Net exports is negative if

Real GDP measures the

Which of the following is TRUE regarding the chain-weighted output index method? I. It is the method used to measure the growth rate of nominal GDP. II. It uses data from the current year and from the previous year. III. It is a method of measuring the growth rate of real GDP.

The expenditure approach to measuring GDP includes firms' spending on wages.

Gross investment equals

What is the relationship between gross investment,net investment,and depreciation? Which measures the change in the capital stock?

-In the above figure,household income is shown by flow

Can nominal GDP ever be less than real GDP?

Real GDP fluctuates from year to year but is always below potential GDP.

Let C represent consumption expenditure,S saving,I gross private domestic investment,G government expenditure on goods and services,and X - M net exports of goods and services.Then GDP equals

Compensation paid to employees represented ________ of GDP for the United States in 2012.

-According to the graph in the figure above,which year experienced the most rapid change in employment?

Explain how GDP is measured according to the expenditure and income approaches.

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the ________ method of calculating real GDP.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 4: Measuring GDP and Economic Growth

To calculate GDP when using the income approach,you must add indirect business taxes and depreciation.

Which of the following is correct?

All of the following household expenditures are included in consumption expenditure EXCEPT

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

Real GDP can be criticized as a measure of economic welfare because it

Net exports is negative if

Real GDP measures the

Which of the following is TRUE regarding the chain-weighted output index method? I. It is the method used to measure the growth rate of nominal GDP. II. It uses data from the current year and from the previous year. III. It is a method of measuring the growth rate of real GDP.

The expenditure approach to measuring GDP includes firms' spending on wages.

Gross investment equals

What is the relationship between gross investment,net investment,and depreciation? Which measures the change in the capital stock?

-In the above figure,household income is shown by flow

Can nominal GDP ever be less than real GDP?

Real GDP fluctuates from year to year but is always below potential GDP.

Let C represent consumption expenditure,S saving,I gross private domestic investment,G government expenditure on goods and services,and X - M net exports of goods and services.Then GDP equals

Compensation paid to employees represented ________ of GDP for the United States in 2012.

-According to the graph in the figure above,which year experienced the most rapid change in employment?

Explain how GDP is measured according to the expenditure and income approaches.

Valuing the quantities of goods produced in consecutive years using prices in both years and then averaging the percentage changes in the value of output is part of the ________ method of calculating real GDP.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters