Question 1

A decrease in U.S. income earned abroad will make all of the following smaller EXCEPT

Accepted Answer

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

Question 2

Which of the following is included in GDP?

Accepted Answer

A)  A newly laid-off worker receives his $400 unemployment compensation check from the state government. 
B)  A college senior receives a $1,000 graduation gift from a grandparent. 
C)  You buy a $12 snow shovel to have on hand for the next snow storm. 
D)  You purchase $300 worth of clothes from a thrift shop selling second-hand clothing. 
A)  A newly laid-off worker receives his $400 unemployment compensation check from the state government. 
B)  A college senior receives a $1,000 graduation gift from a grandparent. 
C)  You buy a $12 snow shovel to have on hand for the next snow storm. 
D)  You purchase $300 worth of clothes from a thrift shop selling second-hand clothing.

Question 3

Which of the following transactions is included in GDP?

Accepted Answer

A)  funds given to a college student by her parents 
B)  funds received by a college student for working in the college dining hall 
C)  funds given to a family on welfare 
D)  Social Security check received by an elderly couple 
A)  funds given to a college student by her parents 
B)  funds received by a college student for working in the college dining hall 
C)  funds given to a family on welfare 
D)  Social Security check received by an elderly couple

Question 4

To calculate GDP once national income has been computed, we must

Accepted Answer

A)  add indirect business taxes and transfers and subtract profits. 
B)  add depreciation and subtract indirect business taxes. 
C)  add depreciation and indirect business taxes and transfer payments and subtract other business income adjustments and net U.S. income earned abroad. 
D)  add indirect business taxes and transfers and subtract depreciation, other business income adjustments, and net U.S. income earned abroad. 
A)  add indirect business taxes and transfers and subtract profits. 
B)  add depreciation and subtract indirect business taxes. 
C)  add depreciation and indirect business taxes and transfer payments and subtract other business income adjustments and net U.S. income earned abroad. 
D)  add indirect business taxes and transfers and subtract depreciation, other business income adjustments, and net U.S. income earned abroad.

Question 5

Which of the following would NOT be included in the calculation of the GDP?

Accepted Answer

A)  the value of the service of legally produced gambling services in Las Vegas 
B)  the value of the services of a homemaker 
C)  the value of legally produced liquor 
D)  the value of the production of nuclear weapons 
A)  the value of the service of legally produced gambling services in Las Vegas 
B)  the value of the services of a homemaker 
C)  the value of legally produced liquor 
D)  the value of the production of nuclear weapons

Question 6

Which of the following transactions is included in GDP?

Accepted Answer

A)  sales of used goods 
B)  buying and selling of stocks and bonds 
C)  the sales of houses produced in that given year 
D)  government transfer payments 
A)  sales of used goods 
B)  buying and selling of stocks and bonds 
C)  the sales of houses produced in that given year 
D)  government transfer payments

Question 7

Total income is defined as

Accepted Answer

A)  the total receipts of firms before taxes. 
B)  the total amount earned by all resource owners. 
C)  the sum of the total receipts of firms and the amount earned by households. 
D)  the sum of the total receipts of firms less the amount of tax that must be paid. 
A)  the total receipts of firms before taxes. 
B)  the total amount earned by all resource owners. 
C)  the sum of the total receipts of firms and the amount earned by households. 
D)  the sum of the total receipts of firms less the amount of tax that must be paid.

Question 8

Which of the following would be included in the calculation of Gross Domestic Product (GDP)?

Accepted Answer

A)  The value of transfer payments 
B)  The value of the sale of a used guitar 
C)  The value of the sale of 1,000 shares of IBM stock 
D)  The value of spending on new machinery and equipment 
A)  The value of transfer payments 
B)  The value of the sale of a used guitar 
C)  The value of the sale of 1,000 shares of IBM stock 
D)  The value of spending on new machinery and equipment

Question 9

In the circular flow, ________ provide the factor services.

Accepted Answer

A)  households 
B)  businesses 
C)  producers 
D)  businesses and households 
A)  households 
B)  businesses 
C)  producers 
D)  businesses and households

Question 10

One key difference between national income and net domestic product is

Accepted Answer

A)  net domestic product does not include income earned by the factors of production while national income does. 
B)  net domestic product represents income that is available to individuals while national income does not. 
C)  net domestic product includes indirect business taxes and transfers while national income does not. 
D)  net domestic product only includes the net additions to the economy's stock of capital while national income does not. 
A)  net domestic product does not include income earned by the factors of production while national income does. 
B)  net domestic product represents income that is available to individuals while national income does not. 
C)  net domestic product includes indirect business taxes and transfers while national income does not. 
D)  net domestic product only includes the net additions to the economy's stock of capital while national income does not.

Question 11

Constant dollar Gross Domestic Product (GDP)

Accepted Answer

A)  is the same as nominal Gross Domestic Product (GDP). 
B)  is nominal Gross Domestic Product (GDP) divided by the price index. 
C)  is equal to real GDP multiplied by the overall price level. 
D)  all of the above. 
A)  is the same as nominal Gross Domestic Product (GDP). 
B)  is nominal Gross Domestic Product (GDP) divided by the price index. 
C)  is equal to real GDP multiplied by the overall price level. 
D)  all of the above.

Question 12

Define and explain gross domestic product.

Accepted Answer

Gross domestic product is the total mark

Question 13

When GDP and other national income accounts are measured in nominal values, then they

Accepted Answer

A)  are measured in current market prices. 
B)  are measured in real values. 
C)  are not comparable because they are not in real terms. 
D)  should be converted into money values before comparing them over time. 
A)  are measured in current market prices. 
B)  are measured in real values. 
C)  are not comparable because they are not in real terms. 
D)  should be converted into money values before comparing them over time.

Question 14

A family sells the house they have lived in for two years to a friend. They received $150,000 and paid $120,000 two years ago. This transaction

Accepted Answer

A)  increases GDP by $150,000 
B)  increases GDP by $30,000 
C)  has no effect on GDP because the house was not made this year 
D)  has no effect on GDP because the house is an intermediate good 
A)  increases GDP by $150,000 
B)  increases GDP by $30,000 
C)  has no effect on GDP because the house was not made this year 
D)  has no effect on GDP because the house is an intermediate good

Question 15

The difference between personal income and disposable personal income is

Accepted Answer

A)  disposable personal income is what is left after personal income taxes have been paid while personal income includes personal income taxes. 
B)  personal income is what is left after personal income taxes have been paid while disposable income includes personal income taxes. 
C)  personal income includes transfer payments while disposable personal income does not. 
D)  personal income includes indirect business taxes while disposable income does not. 
A)  disposable personal income is what is left after personal income taxes have been paid while personal income includes personal income taxes. 
B)  personal income is what is left after personal income taxes have been paid while disposable income includes personal income taxes. 
C)  personal income includes transfer payments while disposable personal income does not. 
D)  personal income includes indirect business taxes while disposable income does not.

Question 16

-Refer to the above figure. Which arrows represent items that are not measured in dollar terms?

Accepted Answer

A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C 
A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C

Question 17

Which of the following is true about product markets?

Accepted Answer

A)  Goods and services flow from households to firms. 
B)  Goods and services flow from firms to households. 
C)  Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms. 
D)  Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households. 
A)  Goods and services flow from households to firms. 
B)  Goods and services flow from firms to households. 
C)  Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms. 
D)  Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households.

Question 18

-According to the above table, Gross Domestic Product is

Accepted Answer

A)  $14,140. 
B)  $13,965. 
C)  $13,315. 
D)  $12,115 
A)  $14,140. 
B)  $13,965. 
C)  $13,315. 
D)  $12,115

Question 19

Per capita real Gross Domestic Product (GDP) is

Accepted Answer

A)  real Gross Domestic Product (GDP) divided by the population. 
B)  real Gross Domestic Product (GDP) divided by a price index. 
C)  real Gross Domestic Product (GDP) minus depreciation. 
D)  population divided by real Gross Domestic Product (GDP). 
A)  real Gross Domestic Product (GDP) divided by the population. 
B)  real Gross Domestic Product (GDP) divided by a price index. 
C)  real Gross Domestic Product (GDP) minus depreciation. 
D)  population divided by real Gross Domestic Product (GDP).

Question 20

-Using the above table, the Gross Domestic Product (GDP) for the country is

Accepted Answer

A)  662. 
B)  84. 
C)  746. 
D)  338. 
A)  662. 
B)  84. 
C)  746. 
D)  338.

Exam 8: Measuring the Economys Performance

A decrease in U.S. income earned abroad will make all of the following smaller EXCEPT

Which of the following is included in GDP?

Which of the following transactions is included in GDP?

To calculate GDP once national income has been computed, we must

Which of the following would NOT be included in the calculation of the GDP?

Which of the following transactions is included in GDP?

Total income is defined as

Which of the following would be included in the calculation of Gross Domestic Product (GDP)?

In the circular flow, ________ provide the factor services.

One key difference between national income and net domestic product is

Constant dollar Gross Domestic Product (GDP)

Define and explain gross domestic product.

When GDP and other national income accounts are measured in nominal values, then they

A family sells the house they have lived in for two years to a friend. They received $150,000 and paid $120,000 two years ago. This transaction

The difference between personal income and disposable personal income is

-Refer to the above figure. Which arrows represent items that are not measured in dollar terms?

Which of the following is true about product markets?

-According to the above table, Gross Domestic Product is

Per capita real Gross Domestic Product (GDP) is

-Using the above table, the Gross Domestic Product (GDP) for the country is

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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