Question 1

GDP measures

Accepted Answer

A)  the nation's economic welfare. 
B)  the nation's economic activity. 
C)  the changes in the unemployment rate in a given year. 
D)  the amount of underground activity in a nation. 
A)  the nation's economic welfare. 
B)  the nation's economic activity. 
C)  the changes in the unemployment rate in a given year. 
D)  the amount of underground activity in a nation.

Question 2

-Refer to the above table. Between 2009 and 2010 real GDP

Accepted Answer

A)  increased by $191.7 billion. 
B)  increased by $1.7 billion. 
C)  increased by $87.6 billion. 
D)  increased by $158.2 billion. 
A)  increased by $191.7 billion. 
B)  increased by $1.7 billion. 
C)  increased by $87.6 billion. 
D)  increased by $158.2 billion.

Question 3

Which of the following would NOT be included in a nation's Gross Domestic Product (GDP)?

Accepted Answer

A)  The government purchases 100 new trucks for the Army. 
B)  The inventory of paper towels goes up. 
C)  A landlord rents an apartment. 
D)  In a poker game a student wins $500 that he does not report as income. 
A)  The government purchases 100 new trucks for the Army. 
B)  The inventory of paper towels goes up. 
C)  A landlord rents an apartment. 
D)  In a poker game a student wins $500 that he does not report as income.

Question 4

Personal income is equal to

Accepted Answer

A)  NDP minus national income. 
B)  disposable personal income plus personal income taxes. 
C)  disposable personal income plus personal and corporate income taxes. 
D)  national income minus (corporate income taxes and Social Security). 
A)  NDP minus national income. 
B)  disposable personal income plus personal income taxes. 
C)  disposable personal income plus personal and corporate income taxes. 
D)  national income minus (corporate income taxes and Social Security).

Question 5

-According to the above table, Gross Domestic Product as calculated by the expenditure approach is

Accepted Answer

A)  $14,337 billion. 
B)  $13,617 billion. 
C)  $13,384 billion. 
D)  $13,278 billion. 
A)  $14,337 billion. 
B)  $13,617 billion. 
C)  $13,384 billion. 
D)  $13,278 billion.

Question 6

Your parents surprise you with a $500 check. As a result, the U.S. GDP

Accepted Answer

A)  increases because this is unexpected income to you. 
B)  decreases because you will spend it on useless goods. 
C)  remains unchanged because it was counted when your parents earned it. 
D)  decreases because you have to pay taxes on this income. 
A)  increases because this is unexpected income to you. 
B)  decreases because you will spend it on useless goods. 
C)  remains unchanged because it was counted when your parents earned it. 
D)  decreases because you have to pay taxes on this income.

Question 7

Calculating Gross Domestic Product (GDP) by the expenditure approach requires summing the value of

Accepted Answer

A)  all income paid to individuals. 
B)  all transactions in the economy. 
C)  all final goods and services produced in the economy. 
D)  all expenditures by individuals. 
A)  all income paid to individuals. 
B)  all transactions in the economy. 
C)  all final goods and services produced in the economy. 
D)  all expenditures by individuals.

Question 8

If Gross Domestic Product (GDP) equals $1 trillion, gross private investment expenditures are $200 billion, exports equal imports, and government spending is $400 billion, then

Accepted Answer

A)  consumption expenditures are $200 billion. 
B)  consumption expenditures are $400 billion. 
C)  spending on consumer durables must be $400 million. 
D)  we cannot determine what expenditures on consumption are without more information. 
A)  consumption expenditures are $200 billion. 
B)  consumption expenditures are $400 billion. 
C)  spending on consumer durables must be $400 million. 
D)  we cannot determine what expenditures on consumption are without more information.

Question 9

Which of the following is NOT included when calculating GDP?

Accepted Answer

A)  the dollar value of a new book 
B)  the dollar value of a new iPod 
C)  the dollar value of a newly issued corporate bond 
D)  the dollar value of tuition expenditures at a community college 
A)  the dollar value of a new book 
B)  the dollar value of a new iPod 
C)  the dollar value of a newly issued corporate bond 
D)  the dollar value of tuition expenditures at a community college

Question 10

The values of variables such as GDP expressed in current dollars are referred to as

Accepted Answer

A)  the price index. 
B)  a deflator. 
C)  nominal values. 
D)  real values. 
A)  the price index. 
B)  a deflator. 
C)  nominal values. 
D)  real values.

Question 11

Nominal values are

Accepted Answer

A)  measured in terms of actual market prices at which the goods are sold. 
B)  based on inflation-adjustments. 
C)  based on Gross Domestic Product (GDP) per capita. 
D)  measured in terms of total purchasing power. 
A)  measured in terms of actual market prices at which the goods are sold. 
B)  based on inflation-adjustments. 
C)  based on Gross Domestic Product (GDP) per capita. 
D)  measured in terms of total purchasing power.

Question 12

The largest category of gross domestic income is

Accepted Answer

A)  interest. 
B)  rent. 
C)  wages. 
D)  profits. 
A)  interest. 
B)  rent. 
C)  wages. 
D)  profits.

Question 13

The computation of GDP by adding up the dollar value at current market prices of all final goods and services is

Accepted Answer

A)  the expenditure approach. 
B)  the income approach. 
C)  transfer payments. 
D)  the value of all securities. 
A)  the expenditure approach. 
B)  the income approach. 
C)  transfer payments. 
D)  the value of all securities.

Question 14

Why might a homemaker be upset with the way Gross Domestic Product (GDP) is calculated?

Accepted Answer

A)  Because the government always underestimates the dollar value of the household services produced at home and outside the market that are included in the Gross Domestic Product (GDP) statistic 
B)  Because household services produced at home and outside the market are only included in Gross Domestic Product (GDP) if the homemaker is a man 
C)  Because household services produced at home and outside the market that are sold to others are not included in Gross Domestic Product (GDP) 
D)  Because none of the household services produced for at home and outside the market are included in Gross Domestic Product (GDP) even though they contribute greatly to the welfare of the family 
A)  Because the government always underestimates the dollar value of the household services produced at home and outside the market that are included in the Gross Domestic Product (GDP) statistic 
B)  Because household services produced at home and outside the market are only included in Gross Domestic Product (GDP) if the homemaker is a man 
C)  Because household services produced at home and outside the market that are sold to others are not included in Gross Domestic Product (GDP) 
D)  Because none of the household services produced for at home and outside the market are included in Gross Domestic Product (GDP) even though they contribute greatly to the welfare of the family

Question 15

Suppose you drive downtown, pay for parking at a private parking garage, and go to see an investment advisor. He charges you a $100 fee to advise you to purchase 500 shares of stock, which you do. Which of these transactions is NOT included in GDP?

Accepted Answer

A)  the purchase of gas for the trip 
B)  paying the parking fee 
C)  paying the $100 fee to the investment advisor 
D)  your purchase of the stock 
A)  the purchase of gas for the trip 
B)  paying the parking fee 
C)  paying the $100 fee to the investment advisor 
D)  your purchase of the stock

Question 16

Is looking at changes in gross domestic product over time a good way to determine whether the people in a country are experiencing an increase in their standards of living? Why or why not?

Accepted Answer

No. GDP figures need to be corrected for

Question 17

Which of the following transactions is included in Gross Domestic Product?

Accepted Answer

A)  A Social Security check received by a retired couple 
B)  A gift card that a mother gives her son 
C)  A used textbook that one student gives another student in exchange for an iPod 
D)  Tips received by a waitress who reports them to the IRS 
A)  A Social Security check received by a retired couple 
B)  A gift card that a mother gives her son 
C)  A used textbook that one student gives another student in exchange for an iPod 
D)  Tips received by a waitress who reports them to the IRS

Question 18

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

Accepted Answer

A)  The purchase of new tires by a family to replace worn out tires on the family car 
B)  The purchase of a used car 
C)  The purchase of 100 shares of General Motors stock 
D)  The purchase of 2 grams of cocaine 
A)  The purchase of new tires by a family to replace worn out tires on the family car 
B)  The purchase of a used car 
C)  The purchase of 100 shares of General Motors stock 
D)  The purchase of 2 grams of cocaine

Question 19

C + net I + G + X equals

Accepted Answer

A)  GDP. 
B)  DPI. 
C)  NDP. 
D)  PI. 
A)  GDP. 
B)  DPI. 
C)  NDP. 
D)  PI.

Question 20

-Refer to the above table. The production of this good goes through 4 different stages of production. What does the total value added equal?

Accepted Answer

A)  $0.07 
B)  $0.32 
C)  $0.75 
D)  Cannot be computed without more information. 
A)  $0.07 
B)  $0.32 
C)  $0.75 
D)  Cannot be computed without more information.

Exam 8: Measuring the Economys Performance

GDP measures

-Refer to the above table. Between 2009 and 2010 real GDP

Which of the following would NOT be included in a nation's Gross Domestic Product (GDP)?

Personal income is equal to

-According to the above table, Gross Domestic Product as calculated by the expenditure approach is

Your parents surprise you with a $500 check. As a result, the U.S. GDP

Calculating Gross Domestic Product (GDP) by the expenditure approach requires summing the value of

If Gross Domestic Product (GDP) equals $1 trillion, gross private investment expenditures are $200 billion, exports equal imports, and government spending is $400 billion, then

Which of the following is NOT included when calculating GDP?

The values of variables such as GDP expressed in current dollars are referred to as

Nominal values are

The largest category of gross domestic income is

The computation of GDP by adding up the dollar value at current market prices of all final goods and services is

Why might a homemaker be upset with the way Gross Domestic Product (GDP) is calculated?

Suppose you drive downtown, pay for parking at a private parking garage, and go to see an investment advisor. He charges you a $100 fee to advise you to purchase 500 shares of stock, which you do. Which of these transactions is NOT included in GDP?

Is looking at changes in gross domestic product over time a good way to determine whether the people in a country are experiencing an increase in their standards of living? Why or why not?

Which of the following transactions is included in Gross Domestic Product?

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

C + net I + G + X equals

-Refer to the above table. The production of this good goes through 4 different stages of production. What does the total value added equal?

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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