Question 1

Explain the two main methods used to measure GDP.

Accepted Answer

The two methods used to measure GDP are

Question 2

In the product markets, households

Accepted Answer

A)  are the buyers of goods and services. 
B)  are the sellers of resources. 
C)  are neither buyers nor sellers in the market. 
D)  none of the above is correct. 
A)  are the buyers of goods and services. 
B)  are the sellers of resources. 
C)  are neither buyers nor sellers in the market. 
D)  none of the above is correct.

Question 3

Which of the following would be included when calculating Gross Domestic Product?

Accepted Answer

A)  The purchase of a previously owned house for $70,000 
B)  The purchase of a used $10,000 automobile 
C)  A Social Security check for $800 
D)  none of the above 
A)  The purchase of a previously owned house for $70,000 
B)  The purchase of a used $10,000 automobile 
C)  A Social Security check for $800 
D)  none of the above

Question 4

Capital purchases by businesses of newly produced durables is known as

Accepted Answer

A)  the expenditure approach. 
B)  the income approach. 
C)  fixed investment. 
D)  inventory investment. 
A)  the expenditure approach. 
B)  the income approach. 
C)  fixed investment. 
D)  inventory investment.

Question 5

-According to the above table, national income is

Accepted Answer

A)  $13,271 billion. 
B)  $11,917 billion. 
C)  $10,770 billion. 
D)  $10,646 billion. 
A)  $13,271 billion. 
B)  $11,917 billion. 
C)  $10,770 billion. 
D)  $10,646 billion.

Question 6

How can we compare standards of living across countries?

Accepted Answer

It is difficult to compare standards of

Question 7

According to the circular flow, the dollar value of a nation's output is equal to

Accepted Answer

A)  profits. 
B)  total income. 
C)  net income minus taxes. 
D)  wages. 
A)  profits. 
B)  total income. 
C)  net income minus taxes. 
D)  wages.

Question 8

-Refer to the above table. The nominal GDP for 2008 is

Accepted Answer

A)  $4819.6. 
B)  $4091.3. 
C)  $5677.5. 
D)  Uncertain without more information. 
A)  $4819.6. 
B)  $4091.3. 
C)  $5677.5. 
D)  Uncertain without more information.

Question 9

Which of the following is NOT a final good or service?

Accepted Answer

A)  an automobile 
B)  bread 
C)  flour 
D)  a cookie 
A)  an automobile 
B)  bread 
C)  flour 
D)  a cookie

Question 10

In the product market,

Accepted Answer

A)  businesses trade goods and services for resources. 
B)  consumers trade resources for goods and services. 
C)  consumers trade goods and services for resources. 
D)  consumers trade monetary payments for goods and services. 
A)  businesses trade goods and services for resources. 
B)  consumers trade resources for goods and services. 
C)  consumers trade goods and services for resources. 
D)  consumers trade monetary payments for goods and services.

Question 11

Indirect business taxes refer to

Accepted Answer

A)  depreciation expenses. 
B)  sales and local taxes paid by business. 
C)  payments for low-skilled labor. 
D)  dividend taxes paid by the corporation. 
A)  depreciation expenses. 
B)  sales and local taxes paid by business. 
C)  payments for low-skilled labor. 
D)  dividend taxes paid by the corporation.

Question 12

The farmer pays 15 cents for wheat seeds. When the wheat is grown and harvested, the farmer sells it to the miller for 30 cents, who makes flour and sells the flour to the baker for 60 cents. The baker makes bread and sells it to the grocer for 90 cents, and the grocer sells it to a family for $1.25. The contribution to GDP is

Accepted Answer

A)  35 cents. 
B)  $1.25. 
C)  $1.95. 
D)  $3.20. 
A)  35 cents. 
B)  $1.25. 
C)  $1.95. 
D)  $3.20.

Question 13

Which of the following would most likely be sold in the product markets?

Accepted Answer

A)  A new car 
B)  Stocks and bonds 
C)  Iron ore 
D)  Entrepreneurial ability 
A)  A new car 
B)  Stocks and bonds 
C)  Iron ore 
D)  Entrepreneurial ability

Question 14

Fixed investment is

Accepted Answer

A)  the change in stocks of finished goods. 
B)  the change in the stocks of goods in process. 
C)  capital purchase by businesses of newly produced durables. 
D)  purchases by consumers of newly produced consumer durables. 
A)  the change in stocks of finished goods. 
B)  the change in the stocks of goods in process. 
C)  capital purchase by businesses of newly produced durables. 
D)  purchases by consumers of newly produced consumer durables.

Question 15

What is value added and how is it related to Gross Domestic Product (GDP)?

Accepted Answer

Value added is the dollar value of an in

Question 16

GDP minus depreciation equals

Accepted Answer

A)  national income. 
B)  aggregate spending. 
C)  personal income. 
D)  net domestic product. 
A)  national income. 
B)  aggregate spending. 
C)  personal income. 
D)  net domestic product.

Question 17

-Using the above table, the net domestic product is (in billions of dollars)

Accepted Answer

A)  8,000. 
B)  9,700. 
C)  8,300. 
D)  6,500. 
A)  8,000. 
B)  9,700. 
C)  8,300. 
D)  6,500.

Question 18

The dollar value of an industry's sales minus the value of intermediate goods is

Accepted Answer

A)  GDP. 
B)  NDP. 
C)  transfer payments. 
D)  value added. 
A)  GDP. 
B)  NDP. 
C)  transfer payments. 
D)  value added.

Question 19

-Refer to the above table. Real GDP in 2013 is

Accepted Answer

A)  103.1. 
B)  128.9. 
C)  775.9. 
D)  824.8. 
A)  103.1. 
B)  128.9. 
C)  775.9. 
D)  824.8.

Question 20

Calculating Gross Domestic Product (GDP) by the income approach would require including

Accepted Answer

A)  all transfer payments by the government. 
B)  all wages paid. 
C)  all restaurant sales. 
D)  the market value of all final goods and any profits. 
A)  all transfer payments by the government. 
B)  all wages paid. 
C)  all restaurant sales. 
D)  the market value of all final goods and any profits.

Exam 8: Measuring the Economys Performance

Explain the two main methods used to measure GDP.

In the product markets, households

Which of the following would be included when calculating Gross Domestic Product?

Capital purchases by businesses of newly produced durables is known as

-According to the above table, national income is

How can we compare standards of living across countries?

According to the circular flow, the dollar value of a nation's output is equal to

-Refer to the above table. The nominal GDP for 2008 is

Which of the following is NOT a final good or service?

In the product market,

Indirect business taxes refer to

Which of the following would most likely be sold in the product markets?

Fixed investment is

What is value added and how is it related to Gross Domestic Product (GDP)?

GDP minus depreciation equals

-Using the above table, the net domestic product is (in billions of dollars)

The dollar value of an industry's sales minus the value of intermediate goods is

-Refer to the above table. Real GDP in 2013 is

Calculating Gross Domestic Product (GDP) by the income approach would require including

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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