Question 1

The following provides data for an economy in a certain year.  
  Given the data, compute the value of GDP.

Accepted Answer

A) $130 
B) $140 
C) $150 
D) $160 
A) $130 
B) $140 
C) $150 
D) $160

Question 2

The following provides data for an economy in a certain year.  
   
Given the data, how much did households spend on nondurables and services?

Accepted Answer

A) $20 
B) $30 
C) $50 
D) $70 
A) $20 
B) $30 
C) $50 
D) $70

Question 3

If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's contribution to GDP is:

Accepted Answer

A) $500,000. 
B) $1,000,000. 
C) $3,500,000. 
D) $4,000,000. 
A) $500,000. 
B) $1,000,000. 
C) $3,500,000. 
D) $4,000,000.

Question 4

GDP excludes important factors that affect people's well-being, such as the value of:

Accepted Answer

A) leisure time. 
B) government purchases of goods and services. 
C) services purchased by households. 
D) goods produced domestically but sold to foreigners. 
A) leisure time. 
B) government purchases of goods and services. 
C) services purchased by households. 
D) goods produced domestically but sold to foreigners.

Question 5

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process:  
$$\begin{array} { | l | c | r | } 
\hline { \text { Name of Campany } } & \text { Revenues } & \text { Cast af Pur chased Inguts } \
\hline \text { Citrus Growers Inc. } & \$ 0.75 & \mathbf { 0 } \
\hline \text { Florida Jarn Cormpany } & \$ 2.00 & \$ 0.75 \
\hline \text { The Corner Store } & \$ 2.50 & \$ 2.00 \
\hline
\end{array}$$  
What is the value added of Florida Jam Company?

Accepted Answer

A) $0.50 
B) $0.75 
C) $1.25 
D) $2.00 
A) $0.50 
B) $0.75 
C) $1.25 
D) $2.00

Question 6

The value of unpaid work by a homemaker ________ included in GDP and the value of housekeeping services sold in a market ________ included in GDP.

Accepted Answer

A) is; is not 
B) is; is 
C) is not; is not 
D) is not; is 
A) is; is not 
B) is; is 
C) is not; is not 
D) is not; is

Question 7

GDP is a measure of an economy's:

Accepted Answer

A) domestic price level. 
B) level of unemployment. 
C) total output. 
D) domestic productivity. 
A) domestic price level. 
B) level of unemployment. 
C) total output. 
D) domestic productivity.

Question 8

If business inventories at the beginning of the year equal $20 billion and equal $30 at the end of the year, then GDP will:

Accepted Answer

A) decrease by $10 billion. 
B) increase by $10 billion. 
C) increase by $30 billion. 
D) decrease by $20 billion. 
A) decrease by $10 billion. 
B) increase by $10 billion. 
C) increase by $30 billion. 
D) decrease by $20 billion.

Question 9

A person 16 years or older who does not work, but is actively looking for work, is officially classified as:

Accepted Answer

A) employed. 
B) unemployed. 
C) chronically unemployed. 
D) out of the labor force. 
A) employed. 
B) unemployed. 
C) chronically unemployed. 
D) out of the labor force.

Question 10

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process:  
$$\begin{array} { | l | c | r | } 
\hline { \text { Name of Campany } } & \text { Revenues } & \text { Cast af Pur chased Inguts } \
\hline \text { Citrus Growers Irc. } & \$ 0.75 & \mathbf { 0 } \
\hline \text { Florida Jarn Cormparty } & \$ 2.00 & \$ 0.75 \
\hline \text { The Comer Store } & \$ 2.50 & \$ 2.00 \
\hline
\end{array}$$  
 If the oranges were grown and the jam produced in the year 2017, but the marmalade was sold at The Corner Store in the year 2018, what is the contribution of these transactions to GDP in the year 2017?

Accepted Answer

A) $1.25 
B) $2.00 
C) $2.50 
D) $2.75 
A) $1.25 
B) $2.00 
C) $2.50 
D) $2.75

Question 11

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2016 was ________ and to nominal GDP in 2016 was ________.

Accepted Answer

A) $80,000; $88,000 
B) $80,000; $90,000 
C) $80,000; $99,000 
D) $90,000; $99,000 
A) $80,000; $88,000 
B) $80,000; $90,000 
C) $80,000; $99,000 
D) $90,000; $99,000

Question 12

Labor income includes:

Accepted Answer

A) wages, salaries, and earnings of the self-employed. 
B) payments to owners of factories, machines, and buildings. 
C) interest, dividends, and rent. 
D) profits, royalties, and rent. 
A) wages, salaries, and earnings of the self-employed. 
B) payments to owners of factories, machines, and buildings. 
C) interest, dividends, and rent. 
D) profits, royalties, and rent.

Question 13

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?

Accepted Answer

A) $21,000 
B) $21,700 
C) $24,000 
D) $24,800 
A) $21,000 
B) $21,700 
C) $24,000 
D) $24,800

Question 14

The greater demand for paid childcare services as women's labor force participation increases represents primarily:

Accepted Answer

A) a decrease in economic activity. 
B) a switch from market to non-market production. 
C) a switch from non-market to market production. 
D) no change in economic activity. 
A) a decrease in economic activity. 
B) a switch from market to non-market production. 
C) a switch from non-market to market production. 
D) no change in economic activity.

Question 15

The following provides data for an economy in a certain year.  
  Given the data, compute the investment component of GDP.

Accepted Answer

A) $30 
B) $40 
C) $60 
D) $70 
A) $30 
B) $40 
C) $60 
D) $70

Question 16

Which of the following is an example of a capital good?

Accepted Answer

A) A new car sold to a family 
B) A metal-stamping machine used to produce cars sold to an automaker 
C) A new speaker system sold to an automaker for installation in a car 
D) A new mobile phone sold to a teenager 
A) A new car sold to a family 
B) A metal-stamping machine used to produce cars sold to an automaker 
C) A new speaker system sold to an automaker for installation in a car 
D) A new mobile phone sold to a teenager

Question 17

If two countries are economically identical except that there is significant air and water pollution in one, then the level of GDP:

Accepted Answer

A) will be higher in the country with pollution. 
B) will be higher in the country with no pollution. 
C) will be the same in both countries. 
D) will be greater than the level of economic well-being in each country. 
A) will be higher in the country with pollution. 
B) will be higher in the country with no pollution. 
C) will be the same in both countries. 
D) will be greater than the level of economic well-being in each country.

Question 18

Net exports equal:

Accepted Answer

A) the value added of exports. 
B) exports plus imports. 
C) exports minus imports. 
D) exports minus depreciation. 
A) the value added of exports. 
B) exports plus imports. 
C) exports minus imports. 
D) exports minus depreciation.

Question 19

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

Accepted Answer

A) decreased by $15 billion. 
B) increased by $15 billion. 
C) increased by $40 billion. 
D) increased by $55 billion. 
A) decreased by $15 billion. 
B) increased by $15 billion. 
C) increased by $40 billion. 
D) increased by $55 billion.

Question 20

The additional goods and services produced by women in the United States as their labor force participation increases represent:

Accepted Answer

A) an increase in economic activity. 
B) a switch from market to non-market production. 
C) a decrease in economic activity. 
D) no change in economic activity, 
A) an increase in economic activity. 
B) a switch from market to non-market production. 
C) a decrease in economic activity. 
D) no change in economic activity,

Exam 17: Measuring Economic Activity: GDP and Unemployment

The following provides data for an economy in a certain year. Given the data, compute the value of GDP.

The following provides data for an economy in a certain year. Given the data, how much did households spend on nondurables and services?

If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's contribution to GDP is:

GDP excludes important factors that affect people's well-being, such as the value of:

The value of unpaid work by a homemaker ________ included in GDP and the value of housekeeping services sold in a market ________ included in GDP.

GDP is a measure of an economy's:

If business inventories at the beginning of the year equal $20 billion and equal $30 at the end of the year, then GDP will:

A person 16 years or older who does not work, but is actively looking for work, is officially classified as:

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2016 was ________ and to nominal GDP in 2016 was ________.

Labor income includes:

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?

The greater demand for paid childcare services as women's labor force participation increases represents primarily:

The following provides data for an economy in a certain year. Given the data, compute the investment component of GDP.

Which of the following is an example of a capital good?

If two countries are economically identical except that there is significant air and water pollution in one, then the level of GDP:

Net exports equal:

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

The additional goods and services produced by women in the United States as their labor force participation increases represent:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

The value of unpaid work by a homemaker included in GDP and the value of housekeeping services sold in a market included in GDP.

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2016 was and to nominal GDP in 2016 was .