Question 1

Which of the following expressions equals GDP?

Accepted Answer

A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies 
A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies

Question 2

The five categories of income used in the income approach to the measurement of GDP are

Accepted Answer

A)  consumption, saving, rental income, corporate profits, and investment. 
B)  employee compensation, net interest, rental income, corporate profits, and proprietor's income. 
C)  employee compensation, consumption, rental income, corporate profits, and proprietor's income. 
D)  employee compensation, saving, rental income, corporate profits, and investment. 
A)  consumption, saving, rental income, corporate profits, and investment. 
B)  employee compensation, net interest, rental income, corporate profits, and proprietor's income. 
C)  employee compensation, consumption, rental income, corporate profits, and proprietor's income. 
D)  employee compensation, saving, rental income, corporate profits, and investment.

Question 3

The difference between gross investment and net investment is

Accepted Answer

A)  inflation. 
B)  depreciation. 
C)  initial capital. 
D)  consumption. 
A)  inflation. 
B)  depreciation. 
C)  initial capital. 
D)  consumption.

Question 4

Double counting (counting the same thing twice) in GDP accounting is avoided by not including

Accepted Answer

A)  net exports. 
B)  intermediate goods. 
C)  illegal activities. 
D)  depreciation. 
A)  net exports. 
B)  intermediate goods. 
C)  illegal activities. 
D)  depreciation.

Question 5

When a recession ends,the turning point that immediately follows is called a

Accepted Answer

A)  trough. 
B)  peak. 
C)  depression. 
D)  None of the above answers is correct. 
A)  trough. 
B)  peak. 
C)  depression. 
D)  None of the above answers is correct.

Question 6

Which of the following best represents an indirect tax?

Accepted Answer

A)  federal income tax 
B)  state income tax 
C)  local property tax 
D)  sales taxes paid on goods and services 
A)  federal income tax 
B)  state income tax 
C)  local property tax 
D)  sales taxes paid on goods and services

Question 7

When calculating the compensation of employees part of GDP,

Accepted Answer

A)  social security contributions must be included. 
B)  fringe benefits are not included. 
C)  taxes withheld on earnings are not included. 
D)  the value of vacation time must be included. 
A)  social security contributions must be included. 
B)  fringe benefits are not included. 
C)  taxes withheld on earnings are not included. 
D)  the value of vacation time must be included.

Question 8

-The figure above shows a

Accepted Answer

A)  two-variable time-series graph. 
B)  time-series graph. 
C)  scatter diagram. 
D)  regression. 
A)  two-variable time-series graph. 
B)  time-series graph. 
C)  scatter diagram. 
D)  regression.

Question 9

$$\begin{array} { | l | c | } 
\hline  { \text { Item } } & \text { Dollars } \
\hline \begin{array} { l } 
\text { Personal consumption } \
\text { expenditure }
\end{array} & 1500 \
\hline \begin{array} { l } 
\text { Gross private domestic } \
\text { investment }
\end{array} & 355 \
\hline \begin{array} { l } 
\text { Government } \
\text { expenditure on goods } \
\text { and services }
\end{array} & 590 \
\hline \begin{array} { l } 
\text { Exports of goods and } \
\text { services }
\end{array} & 70 \
\hline \begin{array} { l } 
\text { Imports of goods and } \
\text { services }
\end{array} & 50 \
\hline \begin{array} { l } 
\text { Depreciation } \

\end{array} & 200 \
\hline \begin{array} { l } 
 \text { Indirect business taxes }
\end{array}&75\
\hline
\end{array}$$

-Based on the data in the above table,gross domestic product equals

Accepted Answer

A)  $2,190. 
B)  $2,840. 
C)  $2,465. 
D)  $2,750. 
A)  $2,190. 
B)  $2,840. 
C)  $2,465. 
D)  $2,750.

Question 10

Which of the following transfer payments is included in GDP?

Accepted Answer

A)  Social Security payments 
B)  welfare payments 
C)  veteran's benefits 
D)  none of the above 
A)  Social Security payments 
B)  welfare payments 
C)  veteran's benefits 
D)  none of the above

Question 11

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2
Using the data,we can conclude that

Accepted Answer

A)  Uruguay's economy reached a peak in 2000. 
B)  GDP per person in Uruguay almost doubled between 2000 and 2008. 
C)  potential GDP in Uruguay doubled between 2000 and 2008. 
D)  Uruguay's economy was entered a recession in 2008. 
A)  Uruguay's economy reached a peak in 2000. 
B)  GDP per person in Uruguay almost doubled between 2000 and 2008. 
C)  potential GDP in Uruguay doubled between 2000 and 2008. 
D)  Uruguay's economy was entered a recession in 2008.

Question 12

Transfer payments are not part of government expenditure on goods and services because transfer payments

Accepted Answer

A)  are not predictable given the nature of their appropriation and allocation. 
B)  do not represent the purchase of a final good or service. 
C)  are not always spent on goods produced in the U.S. 
D)  The premise of the question is incorrect because transfer payments are part of government purchases of goods and services. 
A)  are not predictable given the nature of their appropriation and allocation. 
B)  do not represent the purchase of a final good or service. 
C)  are not always spent on goods produced in the U.S. 
D)  The premise of the question is incorrect because transfer payments are part of government purchases of goods and services.

Question 13

In the national income accounts,the purchase of a new house counts as

Accepted Answer

A)  consumption expenditure. 
B)  investment. 
C)  a transfer. 
D)  an addition to inventory. 
A)  consumption expenditure. 
B)  investment. 
C)  a transfer. 
D)  an addition to inventory.

Question 14

-In the above figure,which point represents a situation with significant shortages of labor,capital,and other resources?

Accepted Answer

A)  point F 
B)  point G 
C)  point I 
D)  point K 
A)  point F 
B)  point G 
C)  point I 
D)  point K

Question 15

Gross domestic product

Accepted Answer

A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period. 
A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period.

Question 16

An economic expansion rather than a recession occurs

Accepted Answer

A)  when the federal budget is balanced. 
B)  when the unemployment rate falls below 5 percent. 
C)  when growth in real GDP is positive. 
D)  when the unemployment rate is not changing. 
A)  when the federal budget is balanced. 
B)  when the unemployment rate falls below 5 percent. 
C)  when growth in real GDP is positive. 
D)  when the unemployment rate is not changing.

Question 17

The expenditure approach measures GDP by adding

Accepted Answer

A)  compensation of employees, rental income, corporate profits, net interest, and proprietors' income. 
B)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid, and depreciation. 
C)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracting subsidies paid by the government. 
D)  consumption expenditure, gross private domestic investment, net exports of goods and services, and government expenditure on goods and services. 
A)  compensation of employees, rental income, corporate profits, net interest, and proprietors' income. 
B)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid, and depreciation. 
C)  compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracting subsidies paid by the government. 
D)  consumption expenditure, gross private domestic investment, net exports of goods and services, and government expenditure on goods and services.

Question 18

A recession is commonly defined as a period with

Accepted Answer

A)  negative growth rate in real GDP that lasts at least one quarter. 
B)  positive growth rate in real GDP that lasts at least one quarter. 
C)  positive growth rate in real GDP that lasts at least two quarters. 
D)  negative growth rate in real GDP that lasts at least two quarters. 
A)  negative growth rate in real GDP that lasts at least one quarter. 
B)  positive growth rate in real GDP that lasts at least one quarter. 
C)  positive growth rate in real GDP that lasts at least two quarters. 
D)  negative growth rate in real GDP that lasts at least two quarters.

Question 19

Gross domestic product (GDP) is the ________ in a given time period.

Accepted Answer

A)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
D)  market value of final goods and services produced by the economy 
A)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
D)  market value of final goods and services produced by the economy

Question 20

$\begin{array}{c}
\begin{array}{|l|}
\hline\
 \text {Item}\
\hline \text {Personal income}\
\hline \text {Net domestic income}\
\text { at factor cost}\
\hline \text {Government}\
\text {expenditure on goods}\
\text {and services}\
\hline \text {Depreciation}\
\hline \text {Gross private domestic}\
\text {investment}\
\hline \text {Indirect taxes}\
\hline \text {Subsidies}\
\hline 
\end{array}
\begin{array}{c|}
\hline\text { Billions of } \
\text { dollars }\
\hline 1,200 \
\hline\
 2,100 \
\hline\
 400 \
\
\hline 200 \
\hline\
 100 \
\hline 600 \
\hline 100\
\hline 
\end{array}
\end{array}$

-The above table shows some national income accounting data for a nation.In this nation,gross domestic product is equal to ________ billion.

Accepted Answer

A)  $2,000 
B)  $2,300 
C)  $2,500 
D)  $2,800 
A)  $2,000 
B)  $2,300 
C)  $2,500 
D)  $2,800

Which of the following expressions equals GDP?

The five categories of income used in the income approach to the measurement of GDP are

The difference between gross investment and net investment is

Double counting (counting the same thing twice) in GDP accounting is avoided by not including

When a recession ends,the turning point that immediately follows is called a

Which of the following best represents an indirect tax?

When calculating the compensation of employees part of GDP,

-The figure above shows a

Which of the following transfer payments is included in GDP?

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2 Using the data,we can conclude that

Transfer payments are not part of government expenditure on goods and services because transfer payments

In the national income accounts,the purchase of a new house counts as

-In the above figure,which point represents a situation with significant shortages of labor,capital,and other resources?

Gross domestic product

An economic expansion rather than a recession occurs

The expenditure approach measures GDP by adding

A recession is commonly defined as a period with

Gross domestic product (GDP) is the ________ in a given time period.

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

Which of the following expressions equals GDP?

The five categories of income used in the income approach to the measurement of GDP are

The difference between gross investment and net investment is

Double counting (counting the same thing twice) in GDP accounting is avoided by not including

When a recession ends,the turning point that immediately follows is called a

Which of the following best represents an indirect tax?

When calculating the compensation of employees part of GDP,

-The figure above shows a

Which of the following transfer payments is included in GDP?

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2 Using the data,we can conclude that

Transfer payments are not part of government expenditure on goods and services because transfer payments

In the national income accounts,the purchase of a new house counts as

-In the above figure,which point represents a situation with significant shortages of labor,capital,and other resources?

Gross domestic product

An economic expansion rather than a recession occurs

The expenditure approach measures GDP by adding

A recession is commonly defined as a period with

Gross domestic product (GDP) is the ________ in a given time period.

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