Question 1

In the United States in 2007,consumption represented approximately

Accepted Answer

A)  5 percent of GDP. 
B)  15 percent of GDP. 
C)  19 percent of GDP. 
D)  70 percent of GDP. 
A)  5 percent of GDP. 
B)  15 percent of GDP. 
C)  19 percent of GDP. 
D)  70 percent of GDP.

Question 2

Consider two cars manufactured by Chevrolet in 2007.During 2007,Chevrolet sells one of the two cars to Sean for $24,000.Later in the same year,Sean sells the car to Kati for $19,000.The second automobile,with a market value of $30,000,is unsold at the end of 2007 and it remains in Chevrolet's inventory.The transactions just described contribute how much to GDP for 2007?

Accepted Answer

A)  $24,000 
B)  $43,000 
C)  $54,000 
D)  $73,000 
A)  $24,000 
B)  $43,000 
C)  $54,000 
D)  $73,000

Question 3

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment 
A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment

Question 4

In the economy of Wrexington in 2008,consumption was $200,exports were $50,GDP was $325,government purchases were $100,imports were $125,and investment was $100.What were Wrexington's net exports in 2008?

Accepted Answer

A)  -$75 
B)  -$50 
C)  $50 
D)  $75 
A)  -$75 
B)  -$50 
C)  $50 
D)  $75

Question 5

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices. 
A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices.

Question 6

The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

Accepted Answer

A)  U.S.government purchases increase by $30,000;U.S.net exports decrease by $30,000;and U.S.GDP is unaffected. 
B)  U.S.government purchases increase by $30,000;U.S.net exports are unaffected;and U.S.GDP increases by $30,000. 
C)  U.S.government purchases,net exports,and GDP are unaffected. 
D)  U.S.government purchases are unaffected;U.S.net exports decrease by $30,000;and U.S.GDP decreases by $30,000. 
A)  U.S.government purchases increase by $30,000;U.S.net exports decrease by $30,000;and U.S.GDP is unaffected. 
B)  U.S.government purchases increase by $30,000;U.S.net exports are unaffected;and U.S.GDP increases by $30,000. 
C)  U.S.government purchases,net exports,and GDP are unaffected. 
D)  U.S.government purchases are unaffected;U.S.net exports decrease by $30,000;and U.S.GDP decreases by $30,000.

Question 7

For the purpose of calculating GDP,investment is spending on

Accepted Answer

A)  stocks,bonds,and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment,inventories,and structures,including household purchases of new housing. 
D)  capital equipment,inventories,and structures,excluding household purchases of new housing. 
A)  stocks,bonds,and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment,inventories,and structures,including household purchases of new housing. 
D)  capital equipment,inventories,and structures,excluding household purchases of new housing.

Question 8

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 9

Anna,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Accepted Answer

A)  in both German GDP and U.S.GDP. 
B)  in German GDP,but it is not included in U.S.GDP. 
C)  in U.S.GDP,but it is not included in German GDP. 
D)  in neither German GDP nor U.S.GDP. 
A)  in both German GDP and U.S.GDP. 
B)  in German GDP,but it is not included in U.S.GDP. 
C)  in U.S.GDP,but it is not included in German GDP. 
D)  in neither German GDP nor U.S.GDP.

Question 10

To compute GDP,we

Accepted Answer

A)  add up the wages paid to all workers. 
B)  add up the costs of producing all final goods and services. 
C)  add up the market values of all final goods and services. 
D)  take the difference between the market values of all final goods and services and the costs of producing those final goods and services. 
A)  add up the wages paid to all workers. 
B)  add up the costs of producing all final goods and services. 
C)  add up the market values of all final goods and services. 
D)  take the difference between the market values of all final goods and services and the costs of producing those final goods and services.

Question 11

How is net national product (NNP)calculated?

Accepted Answer

A)  Saving is subtracted from the total income of a nation's citizens. 
B)  Saving is subtracted from the total income of a nation's permanent residents. 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are subtracted from the total income of a nation's permanent residents. 
A)  Saving is subtracted from the total income of a nation's citizens. 
B)  Saving is subtracted from the total income of a nation's permanent residents. 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are subtracted from the total income of a nation's permanent residents.

Question 12

Which of the following is an example of depreciation?

Accepted Answer

A)  falling stock prices 
B)  the retirement of several employees 
C)  computers becoming obsolete 
D)  All of the above are examples of depreciation. 
A)  falling stock prices 
B)  the retirement of several employees 
C)  computers becoming obsolete 
D)  All of the above are examples of depreciation.

Question 13

Additions to inventory subtract from GDP,and when the goods in inventory are later used or sold,the reductions in inventory add to GDP.

Accepted Answer

A) True 
 B)False

Question 14

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
  
-Refer to Table 23-5.Batterland's inflation rate from 2007 to 2008 was

Accepted Answer

A)  15%. 
B)  22.5%. 
C)  33.3%. 
D)  72.5%. 
A)  15%. 
B)  22.5%. 
C)  33.3%. 
D)  72.5%.

Question 15

The GDP deflator is the ratio of

Accepted Answer

A)  real GDP to nominal GDP multiplied by 100. 
B)  real GDP to the inflation rate multiplied by 100. 
C)  nominal GDP to real GDP multiplied by 100. 
D)  nominal GDP to the inflation rate multiplied by 100. 
A)  real GDP to nominal GDP multiplied by 100. 
B)  real GDP to the inflation rate multiplied by 100. 
C)  nominal GDP to real GDP multiplied by 100. 
D)  nominal GDP to the inflation rate multiplied by 100.

Question 16

GDP does not reflect

Accepted Answer

A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct. 
A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct.

Question 17

Which of the following represents a transfer payment?

Accepted Answer

A)  You transfer $1,000 from your bank account to a mutual fund. 
B)  The government sends your grandfather his Social Security check. 
C)  The bank transfers $10 in quarterly interest to your savings account. 
D)  Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account. 
A)  You transfer $1,000 from your bank account to a mutual fund. 
B)  The government sends your grandfather his Social Security check. 
C)  The bank transfers $10 in quarterly interest to your savings account. 
D)  Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.

Question 18

Unemployment compensation is

Accepted Answer

A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits. 
A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits.

Question 19

Table 23-3
The table below contains data for the country of Wrexington for the year 2008.
  
-Refer to Table 23-3.What was Wrexington's investment in 2008?

Accepted Answer

A)  $675 
B)  $1090 
C)  $1491 
D)  $1793 
A)  $675 
B)  $1090 
C)  $1491 
D)  $1793

Question 20

Which of the following items is counted as part of government purchases?

Accepted Answer

A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct. 
A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct.

Exam 23: Measuring a Nations Income

In the United States in 2007,consumption represented approximately

Household spending on education is counted in which component or subcomponent of GDP?

In the economy of Wrexington in 2008,consumption was $200,exports were $50,GDP was $325,government purchases were $100,imports were $125,and investment was $100.What were Wrexington's net exports in 2008?

The GDP deflator for years subsequent to the base year measures the change in

The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

For the purpose of calculating GDP,investment is spending on

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Anna,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

To compute GDP,we

How is net national product (NNP)calculated?

Which of the following is an example of depreciation?

Additions to inventory subtract from GDP,and when the goods in inventory are later used or sold,the reductions in inventory add to GDP.

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.Batterland's inflation rate from 2007 to 2008 was

The GDP deflator is the ratio of

GDP does not reflect

Which of the following represents a transfer payment?

Unemployment compensation is

Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What was Wrexington's investment in 2008?

Which of the following items is counted as part of government purchases?

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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