Question 1

The income that households and noncorporate businesses receive is called

Accepted Answer

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

Question 2

If nominal GDP doubles and the GDP deflator doubles,then real GDP

Accepted Answer

A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples. 
A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples.

Question 3

The inflation rate is the

Accepted Answer

A)  absolute change in real GDP from one period to another. 
B)  percentage change in real GDP from one period to another. 
C)  absolute change in the price level from one period to another. 
D)  percentage change in the price level from one period to another. 
A)  absolute change in real GDP from one period to another. 
B)  percentage change in real GDP from one period to another. 
C)  absolute change in the price level from one period to another. 
D)  percentage change in the price level from one period to another.

Question 4

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

Accepted Answer

A)  final goods and services that are purchased by the U.S.federal government 
B)  intermediate goods that are produced in the U.S.but that are unsold at the end of the GDP accounting period 
C)  goods and services produced by foreign citizens working in the U.S. 
D)  All of the above are included in U.S.GDP. 
A)  final goods and services that are purchased by the U.S.federal government 
B)  intermediate goods that are produced in the U.S.but that are unsold at the end of the GDP accounting period 
C)  goods and services produced by foreign citizens working in the U.S. 
D)  All of the above are included in U.S.GDP.

Question 5

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 2005 to 2006 was

Accepted Answer

A)  -25%. 
B)  25%. 
C)  33.3%. 
D)  100%. 
A)  -25%. 
B)  25%. 
C)  33.3%. 
D)  100%.

Question 6

The GDP deflator can be used to take inflation out of nominal GDP.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following events would cause GDP for 2007 to increase?

Accepted Answer

A)  In February 2007,Amanda sells a 1996 Honda Accord to Isabella. 
B)  In February 2007,Amanda buys a ticket to visit a zoo in Florida.She visits the zoo in April 2007. 
C)  In December 2007,Isabella eats onions that she harvested from her backyard garden in October 2007. 
D)  All of the above are correct. 
A)  In February 2007,Amanda sells a 1996 Honda Accord to Isabella. 
B)  In February 2007,Amanda buys a ticket to visit a zoo in Florida.She visits the zoo in April 2007. 
C)  In December 2007,Isabella eats onions that she harvested from her backyard garden in October 2007. 
D)  All of the above are correct.

Question 8

The total sales of all firms in the economy for a year

Accepted Answer

A)  equals GDP for the year. 
B)  is larger than GDP for the year. 
C)  is smaller than GDP for the year. 
D)  Any of the above is possible. 
A)  equals GDP for the year. 
B)  is larger than GDP for the year. 
C)  is smaller than GDP for the year. 
D)  Any of the above is possible.

Question 9

Changes in nominal GDP reflect

Accepted Answer

A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced. 
A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced.

Question 10

Which of the following is correct?

Accepted Answer

A)  Nominal GDP never equals real GDP. 
B)  Nominal GDP always equals real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year. 
A)  Nominal GDP never equals real GDP. 
B)  Nominal GDP always equals real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year.

Question 11

The consumption component of GDP includes spending on

Accepted Answer

A)  durable goods and nondurable goods,but not spending on services. 
B)  durable goods and services,but not spending on nondurable goods. 
C)  nondurable goods and services,but not spending on durable goods. 
D)  durable goods,nondurable goods,and services. 
A)  durable goods and nondurable goods,but not spending on services. 
B)  durable goods and services,but not spending on nondurable goods. 
C)  nondurable goods and services,but not spending on durable goods. 
D)  durable goods,nondurable goods,and services.

Question 12

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)  U.S.consumption does not change,U.S.net exports decrease by $100,and U.S.GDP decreases by $100. 
B)  U.S.consumption does not change,U.S.net exports increase by $100,and U.S.GDP increases by $100. 
C)  U.S.consumption increases by $100,U.S.net exports decrease by $100,and U.S.GDP does not change. 
D)  U.S.consumption increases by $100,U.S.net exports do not change,and U.S.GDP increases by $100. 
A)  U.S.consumption does not change,U.S.net exports decrease by $100,and U.S.GDP decreases by $100. 
B)  U.S.consumption does not change,U.S.net exports increase by $100,and U.S.GDP increases by $100. 
C)  U.S.consumption increases by $100,U.S.net exports decrease by $100,and U.S.GDP does not change. 
D)  U.S.consumption increases by $100,U.S.net exports do not change,and U.S.GDP increases by $100.

Question 13

Which of the following correctly orders U.S.income measures from largest to smallest?

Accepted Answer

A)  disposable personal income,gross national product,national income,net national product,personal income 
B)  personal income,net national product,national income,gross national product,disposable personal income 
C)  gross national product,net national product,national income,personal income,disposable personal income 
D)  disposable personal income,personal income,national income,net national product,gross national product 
A)  disposable personal income,gross national product,national income,net national product,personal income 
B)  personal income,net national product,national income,gross national product,disposable personal income 
C)  gross national product,net national product,national income,personal income,disposable personal income 
D)  disposable personal income,personal income,national income,net national product,gross national product

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.In 2006,Batterland's nominal GDP was

Accepted Answer

A)  $100. 
B)  $390. 
C)  $400. 
D)  $540. 
A)  $100. 
B)  $390. 
C)  $400. 
D)  $540.

Question 15

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Accepted Answer

A) True 
 B)False

Question 16

In the economy of Wrexington in 2008,consumption was $1000,exports were $100,government purchases were $450,imports were $150,and investment was $350.What was Wrexington's GDP in 2008?

Accepted Answer

A)  $1750 
B)  $1850 
C)  $1900 
D)  $2050 
A)  $1750 
B)  $1850 
C)  $1900 
D)  $2050

Question 17

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006.In 2007,it sells all 25 cars.Which of the following statements is correct?

Accepted Answer

A)  The value of the cars in inventory will be counted as part of 2006 GDP,and the value of the cars sold in 2007 will not increase 2007 GDP. 
B)  The value of the cars in inventory will not affect 2006 GDP,and the value of the cars sold in 2007 will increase 2007 GDP. 
C)  The value of the cars in inventory will be counted as part of 2006 GDP,and the value of the cars sold in 2007 will increase 2007 GDP. 
D)  The value of the cars in inventory will not affect 2006 GDP,and the value of the cars sold in 2007 will not increase 2007 GDP. 
A)  The value of the cars in inventory will be counted as part of 2006 GDP,and the value of the cars sold in 2007 will not increase 2007 GDP. 
B)  The value of the cars in inventory will not affect 2006 GDP,and the value of the cars sold in 2007 will increase 2007 GDP. 
C)  The value of the cars in inventory will be counted as part of 2006 GDP,and the value of the cars sold in 2007 will increase 2007 GDP. 
D)  The value of the cars in inventory will not affect 2006 GDP,and the value of the cars sold in 2007 will not increase 2007 GDP.

Question 18

When economists talk about growth in the economy,they measure that growth as the

Accepted Answer

A)  absolute change in nominal GDP from one period to another. 
B)  percentage change in nominal GDP from one period to another. 
C)  absolute change in real GDP from one period to another. 
D)  percentage change in real GDP from one period to another. 
A)  absolute change in nominal GDP from one period to another. 
B)  percentage change in nominal GDP from one period to another. 
C)  absolute change in real GDP from one period to another. 
D)  percentage change in real GDP from one period to another.

Question 19

During a presidential campaign,the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office.You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years.You should conclude that real GDP per person

Accepted Answer

A)  grew by more than 12 percent. 
B)  grew,but by less than 12 percent. 
C)  was unchanged. 
D)  decreased. 
A)  grew by more than 12 percent. 
B)  grew,but by less than 12 percent. 
C)  was unchanged. 
D)  decreased.

Question 20

Table 23-4
The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005.
  
-Refer to Table 23-4.Dachsland's inflation rate from 2007 to 2008 was

Accepted Answer

A)  15.4%. 
B)  26.1%. 
C)  45.5%. 
D)  77.8%. 
A)  15.4%. 
B)  26.1%. 
C)  45.5%. 
D)  77.8%.

Exam 23: Measuring a Nations Income

The income that households and noncorporate businesses receive is called

If nominal GDP doubles and the GDP deflator doubles,then real GDP

The inflation rate is the

Which of the following items is included in U.S.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 2005 to 2006 was

The GDP deflator can be used to take inflation out of nominal GDP.

Which of the following events would cause GDP for 2007 to increase?

The total sales of all firms in the economy for a year

Changes in nominal GDP reflect

Which of the following is correct?

The consumption component of GDP includes spending on

When an American household purchases a bottle of Italian wine for $100,

Which of the following correctly orders U.S.income measures from largest to smallest?

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.In 2006,Batterland's nominal GDP was

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

In the economy of Wrexington in 2008,consumption was $1000,exports were $100,government purchases were $450,imports were $150,and investment was $350.What was Wrexington's GDP in 2008?

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006.In 2007,it sells all 25 cars.Which of the following statements is correct?

When economists talk about growth in the economy,they measure that growth as the

Table 23-4 The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005. -Refer to Table 23-4.Dachsland's inflation rate from 2007 to 2008 was

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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