Question 1

Which of the following would NOT be a part of personal income?

Accepted Answer

A)  indirect business taxes 
B)  payments received from Social Security 
C)  retirement checks 
D)  corporate dividend payments to shareholders 
A)  indirect business taxes 
B)  payments received from Social Security 
C)  retirement checks 
D)  corporate dividend payments to shareholders

Question 2

A consumer good that is used up within three years is a(n)

Accepted Answer

A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment. 
A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment.

Question 3

The two main approaches to measuring GDP are the

Accepted Answer

A)  concept approach and the reality approach. 
B)  flow approach and the stock approach. 
C)  government approach and the consumer approach. 
D)  income approach and the expenditure approach. 
A)  concept approach and the reality approach. 
B)  flow approach and the stock approach. 
C)  government approach and the consumer approach. 
D)  income approach and the expenditure approach.

Question 4

The difference between Gross Domestic Income (GDI) and Gross Domestic Product (GDP) is that

Accepted Answer

A)  GDI is GDP less indirect business taxes and depreciation. 
B)  GDP is GDI less indirect business taxes and depreciation. 
C)  GDI is equal to GDP. 
D)  GDP is always smaller than GDI. 
A)  GDI is GDP less indirect business taxes and depreciation. 
B)  GDP is GDI less indirect business taxes and depreciation. 
C)  GDI is equal to GDP. 
D)  GDP is always smaller than GDI.

Question 5

The total value of all final goods and services produced by factors of production located within a nation's borders is

Accepted Answer

A)  GDP. 
B)  NI. 
C)  PI. 
D)  net investment. 
A)  GDP. 
B)  NI. 
C)  PI. 
D)  net investment.

Question 6

Which of the following is a final good?

Accepted Answer

A)  Seed used for corn 
B)  Wheat used for bread 
C)  Electricity used for producing automobiles 
D)  A lawn mower purchased by a household 
A)  Seed used for corn 
B)  Wheat used for bread 
C)  Electricity used for producing automobiles 
D)  A lawn mower purchased by a household

Question 7

When dealing with anything that is measured as a flow, one must

Accepted Answer

A)  use dollar values. 
B)  make sure the thing can be measured accurately. 
C)  specify a time period. 
D)  specify one day in time. 
A)  use dollar values. 
B)  make sure the thing can be measured accurately. 
C)  specify a time period. 
D)  specify one day in time.

Question 8

Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?

Accepted Answer

A)  nominal GDP based on purchasing power parity 
B)  per capita real GDP based on purchasing power parity 
C)  real GDP based on foreign exchange rates 
D)  per capita nominal GDP based on foreign exchange rates 
A)  nominal GDP based on purchasing power parity 
B)  per capita real GDP based on purchasing power parity 
C)  real GDP based on foreign exchange rates 
D)  per capita nominal GDP based on foreign exchange rates

Question 9

Suppose an individual buys a new CD of her favorite musical artist. This purchase has taken place in the

Accepted Answer

A)  product markets. 
B)  factor markets. 
C)  labor markets. 
D)  resource markets. 
A)  product markets. 
B)  factor markets. 
C)  labor markets. 
D)  resource markets.

Question 10

If disposable personal income (DPI) = $800 and personal income taxes = $80, then what is personal income (PI)?

Accepted Answer

A)  $720 
B)  $800 
C)  $880 
D)  can't tell from the information provided 
A)  $720 
B)  $800 
C)  $880 
D)  can't tell from the information provided

Question 11

-Using above table, the market price of the textbook is

Accepted Answer

A)  $118.90. 
B)  $32.00. 
C)  $78.90. 
D)  $40.00 
A)  $118.90. 
B)  $32.00. 
C)  $78.90. 
D)  $40.00

Question 12

If all other factors are held constant, an increase in imports

Accepted Answer

A)  causes an increase in exports of the same size. 
B)  causes Gross Domestic Product (GDP) to increase. 
C)  causes Gross Domestic Product (GDP) to decrease. 
D)  can cause Gross Domestic Product (GDP) to increase or decrease, depending on whether the imports are purchased by consumers or by business firms. 
A)  causes an increase in exports of the same size. 
B)  causes Gross Domestic Product (GDP) to increase. 
C)  causes Gross Domestic Product (GDP) to decrease. 
D)  can cause Gross Domestic Product (GDP) to increase or decrease, depending on whether the imports are purchased by consumers or by business firms.

Question 13

GDP is a

Accepted Answer

A)  stock because it measures income for the entire country. 
B)  stock because it measures wealth at a distinct point in time. 
C)  flow because dollar values are used. 
D)  flow because it measures income over a period of time. 
A)  stock because it measures income for the entire country. 
B)  stock because it measures wealth at a distinct point in time. 
C)  flow because dollar values are used. 
D)  flow because it measures income over a period of time.

Question 14

Personal income is

Accepted Answer

A)  the sum of all incomes received by households on welfare. 
B)  the income households have after paying federal taxes. 
C)  the sum of all incomes received by households. 
D)  the sum of all incomes earned by sole proprietorships and partnerships. 
A)  the sum of all incomes received by households on welfare. 
B)  the income households have after paying federal taxes. 
C)  the sum of all incomes received by households. 
D)  the sum of all incomes earned by sole proprietorships and partnerships.

Question 15

Which of the following is an example of investment in computing Gross Domestic Product (GDP)?

Accepted Answer

A)  An increase of inventory stock in an auto dealership 
B)  A deposit of $2,000 in a bank 
C)  A laptop purchased by a student 
D)  The purchase of government bonds by a retiree 
A)  An increase of inventory stock in an auto dealership 
B)  A deposit of $2,000 in a bank 
C)  A laptop purchased by a student 
D)  The purchase of government bonds by a retiree

Question 16

The measurement system used by the U.S. government to estimate national income is

Accepted Answer

A)  the GDP deflator. 
B)  national income accounting. 
C)  the sum of financial transactions, transfer payments and secondhand goods. 
D)  the sum of consumption plus investment expenditures. 
A)  the GDP deflator. 
B)  national income accounting. 
C)  the sum of financial transactions, transfer payments and secondhand goods. 
D)  the sum of consumption plus investment expenditures.

Question 17

-Refer to the above table. All real GDP numbers are expressed in terms of the purchasing power of dollars in

Accepted Answer

A)  2010. 
B)  2011. 
C)  2012. 
D)  2013. 
A)  2010. 
B)  2011. 
C)  2012. 
D)  2013.

Question 18

A consumer good that has a life span of more than three years is a(n)

Accepted Answer

A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment. 
A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment.

Question 19

-Using the above table, the National Income (NI) for the country is

Accepted Answer

A)  338. 
B)  228. 
C)  318. 
D)  662. 
A)  338. 
B)  228. 
C)  318. 
D)  662.

Question 20

How do GDP and NDP differ? What does it mean if net investment is negative?

Accepted Answer

Net domestic product equals GDP minus de

Exam 8: Measuring the Economys Performance

Which of the following would NOT be a part of personal income?

A consumer good that is used up within three years is a(n)

The two main approaches to measuring GDP are the

The difference between Gross Domestic Income (GDI) and Gross Domestic Product (GDP) is that

The total value of all final goods and services produced by factors of production located within a nation's borders is

Which of the following is a final good?

When dealing with anything that is measured as a flow, one must

Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?

Suppose an individual buys a new CD of her favorite musical artist. This purchase has taken place in the

If disposable personal income (DPI) = $800 and personal income taxes = $80, then what is personal income (PI)?

-Using above table, the market price of the textbook is

If all other factors are held constant, an increase in imports

GDP is a

Personal income is

Which of the following is an example of investment in computing Gross Domestic Product (GDP)?

The measurement system used by the U.S. government to estimate national income is

-Refer to the above table. All real GDP numbers are expressed in terms of the purchasing power of dollars in

A consumer good that has a life span of more than three years is a(n)

-Using the above table, the National Income (NI) for the country is

How do GDP and NDP differ? What does it mean if net investment is negative?

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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