Question 1

A good is produced by a firm in 2007,added to the firm's inventory in 2007,and sold to a household in 2008.As a result,on net,

Accepted Answer

A)  2007 GDP increased and 2008 GDP decreased. 
B)  2007 GDP decreased and 2008 GDP increased. 
C)  2007 GDP did not change and 2008 GDP increased. 
D)  2007 GDP increased and 2008 GDP did not change. 
A)  2007 GDP increased and 2008 GDP decreased. 
B)  2007 GDP decreased and 2008 GDP increased. 
C)  2007 GDP did not change and 2008 GDP increased. 
D)  2007 GDP increased and 2008 GDP did not change.

Question 2

Which of the following items is included in GDP?

Accepted Answer

A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP. 
A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP.

Question 3

Nominal GDP uses constant base-year prices to place a value on the economy's production of goods and services,while real GDP uses current prices to place a value on the economy's production of goods and services.

Accepted Answer

A) True 
 B)False

Question 4

In the economy of Wrexington in 2008,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Wrexington's GDP in 2008?

Accepted Answer

A)  $1450 
B)  $1790 
C)  $2455 
D)  $2790 
A)  $1450 
B)  $1790 
C)  $2455 
D)  $2790

Question 5

Table 23-1
The table below contains data for the country of Wrexington for the year 2006.
  
-Refer to Table 23-1.Personal income for Wrexington in 2006 is

Accepted Answer

A)  $51. 
B)  $91. 
C)  $93. 
D)  $133. 
A)  $51. 
B)  $91. 
C)  $93. 
D)  $133.

Question 6

Which of the following items is included in U.S.GDP?

Accepted Answer

A)  the estimated value of production accomplished at home,such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S.GDP. 
A)  the estimated value of production accomplished at home,such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S.GDP.

Question 7

Table 23-6
The table below contains data for the country of Togogo.The base year is 1974.
  
-Refer to Table 23-6.Which of the following is not correct?

Accepted Answer

A)  This economy experienced growth from 1974 to 1975. 
B)  This economy experienced growth from 1975 to 1976. 
C)  This economy experienced growth from 1976 to 1977. 
D)  This economy experienced inflation from 1974 to 1975,from 1975 to 1976,and from 1976 to 1977. 
A)  This economy experienced growth from 1974 to 1975. 
B)  This economy experienced growth from 1975 to 1976. 
C)  This economy experienced growth from 1976 to 1977. 
D)  This economy experienced inflation from 1974 to 1975,from 1975 to 1976,and from 1976 to 1977.

Question 8

In the economy of Wrexington in 2008,nominal GDP was $28 trillion and real GDP was $32 trillion.What was Wrexington's GDP deflator in 2008?

Accepted Answer

A)  87.5 
B)  114.3 
C)  400 
D)  896 
A)  87.5 
B)  114.3 
C)  400 
D)  896

Question 9

A recession is always associated with

Accepted Answer

A)  the end of a war. 
B)  slowly growing real GDP. 
C)  rising inflation. 
D)  declining real GDP. 
A)  the end of a war. 
B)  slowly growing real GDP. 
C)  rising inflation. 
D)  declining real GDP.

Question 10

GDP is not a perfect measure of well-being;for example,

Accepted Answer

A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct. 
A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct.

Question 11

If exports are $500,GDP is $8000,government purchases are $1200,imports are $700,and investment is $800,then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about GDP is correct?

Accepted Answer

A)  GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B)  Money continuously flows from households to firms and then back to households,and GDP measures this flow of money. 
C)  GDP is generally regarded as the best single measure of a society's economic well-being. 
D)  All of the above are correct. 
A)  GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B)  Money continuously flows from households to firms and then back to households,and GDP measures this flow of money. 
C)  GDP is generally regarded as the best single measure of a society's economic well-being. 
D)  All of the above are correct.

Question 13

Household spending on education is included in

Accepted Answer

A)  consumption,although it might be argued that it would fit better in investment. 
B)  investment,although it might be argued that it would fit better in consumption. 
C)  government spending,based on the fact that most higher-education students attend publicly-supported colleges and universities. 
D)  None of the above is correct;in general,household spending on services is not included in any component of GDP. 
A)  consumption,although it might be argued that it would fit better in investment. 
B)  investment,although it might be argued that it would fit better in consumption. 
C)  government spending,based on the fact that most higher-education students attend publicly-supported colleges and universities. 
D)  None of the above is correct;in general,household spending on services is not included in any component of GDP.

Question 14

U.S.GDP includes estimates of the value of items that are produced and consumed at home,such as housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 15

In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

Accepted Answer

A) True 
 B)False

Question 16

In the economy of Wrexington in 2008,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Wrexington's GDP in 2008?

Accepted Answer

A)  $6700 
B)  $6800 
C)  $7000 
D)  $7200 
A)  $6700 
B)  $6800 
C)  $7000 
D)  $7200

Question 17

Which of the following is not included in GDP?

Accepted Answer

A)  a can of bug spray 
B)  the services of an exterminator 
C)  the honey produced and sold by a beekeeper 
D)  All of the above are included in GDP. 
A)  a can of bug spray 
B)  the services of an exterminator 
C)  the honey produced and sold by a beekeeper 
D)  All of the above are included in GDP.

Question 18

Which of the following is included in U.S.GDP?

Accepted Answer

A)  the value of production by an American working in Morocco 
B)  the value of production by a Moroccan working in the U.S. 
C)  Both (a)and (b)are correct. 
D)  Neither (a)nor (b)is correct. 
A)  the value of production by an American working in Morocco 
B)  the value of production by a Moroccan working in the U.S. 
C)  Both (a)and (b)are correct. 
D)  Neither (a)nor (b)is correct.

Question 19

Which of the following statements is correct?

Accepted Answer

A)  The value of intermediate goods is always included in GDP. 
B)  The value of intermediate goods is included in GDP only if those goods were produced in the previous year. 
C)  The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date. 
D)  The value of intermediate goods is never included in GDP. 
A)  The value of intermediate goods is always included in GDP. 
B)  The value of intermediate goods is included in GDP only if those goods were produced in the previous year. 
C)  The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date. 
D)  The value of intermediate goods is never included in GDP.

Question 20

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Accepted Answer

A)  a positive contribution both to investment and to GDP. 
B)  a positive contribution both to consumption and to GDP. 
C)  a positive contribution to GDP,but it does not affect investment or consumption. 
D)  a positive contribution to investment,but it does not affect GDP. 
A)  a positive contribution both to investment and to GDP. 
B)  a positive contribution both to consumption and to GDP. 
C)  a positive contribution to GDP,but it does not affect investment or consumption. 
D)  a positive contribution to investment,but it does not affect GDP.

Exam 23: Measuring a Nations Income

A good is produced by a firm in 2007,added to the firm's inventory in 2007,and sold to a household in 2008.As a result,on net,

Which of the following items is included in GDP?

Nominal GDP uses constant base-year prices to place a value on the economy's production of goods and services,while real GDP uses current prices to place a value on the economy's production of goods and services.

In the economy of Wrexington in 2008,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Wrexington's GDP in 2008?

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.Personal income for Wrexington in 2006 is

Which of the following items is included in U.S.GDP?

Table 23-6 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 23-6.Which of the following is not correct?

In the economy of Wrexington in 2008,nominal GDP was $28 trillion and real GDP was $32 trillion.What was Wrexington's GDP deflator in 2008?

A recession is always associated with

GDP is not a perfect measure of well-being;for example,

If exports are $500,GDP is $8000,government purchases are $1200,imports are $700,and investment is $800,then consumption is $6200.

Which of the following statements about GDP is correct?

Household spending on education is included in

U.S.GDP includes estimates of the value of items that are produced and consumed at home,such as housework and car maintenance.

In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

In the economy of Wrexington in 2008,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Wrexington's GDP in 2008?

Which of the following is not included in GDP?

Which of the following is included in U.S.GDP?

Which of the following statements is correct?

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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