Question 1

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

Accepted Answer

Gross investment minus depreciation equa

Question 2

Choose the best statement.

Accepted Answer

A)  GDP equals aggregate expenditure and equals aggregate income. 
B)  An increase in government purchases increases aggregate expenditure but does not change GDP. 
C)  An increase in compensation of employees increases aggregate income but does not change GDP. 
D)  GDP always equals aggregate expenditure and sometimes equals aggregate income. 
A)  GDP equals aggregate expenditure and equals aggregate income. 
B)  An increase in government purchases increases aggregate expenditure but does not change GDP. 
C)  An increase in compensation of employees increases aggregate income but does not change GDP. 
D)  GDP always equals aggregate expenditure and sometimes equals aggregate income.

Question 3

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

Accepted Answer

A) True 
 B)False

Question 4

-If consumption expenditures are $500 million, net investment is $100 million, depreciation equals $5 million, imports are $50 million, exports are $55 million, government expenditure on goods and services is $220 million, and government transfer payments are $20 million, then GDP is

Accepted Answer

A)  $790 million. 
B)  $800 million. 
C)  $830 million. 
D)  $850 million. 
A)  $790 million. 
B)  $800 million. 
C)  $830 million. 
D)  $850 million.

Question 5

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person ________ by ________ between 2006 and 2007 in Mexico.

Accepted Answer

A)  increased; $1038 
B)  increased; 5 percent 
C)  decreased; $2013 
D)  decreased; 5 percent 
A)  increased; $1038 
B)  increased; 5 percent 
C)  decreased; $2013 
D)  decreased; 5 percent

Question 6

An example of "investment" in the national income accounts is the purchase of

Accepted Answer

A)  a new van by a potter, who packs it with his wares and travels to art shows. 
B)  100 shares of Intel stock on the New York Stock Exchange. 
C)  a 100-year-old house that was just put on the protected historic sites list in the year in question. 
D)  a U.S. government bond. 
A)  a new van by a potter, who packs it with his wares and travels to art shows. 
B)  100 shares of Intel stock on the New York Stock Exchange. 
C)  a 100-year-old house that was just put on the protected historic sites list in the year in question. 
D)  a U.S. government bond.

Question 7

-The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Accepted Answer

A)  opportunity cost approach. 
B)  expenditure approach. 
C)  added cost approach. 
D)  income approach. 
A)  opportunity cost approach. 
B)  expenditure approach. 
C)  added cost approach. 
D)  income approach.

Question 8

Real GDP

Accepted Answer

A)  fluctuates from year to year but is always below potential GDP. 
B)  fluctuates around potential GDP. 
C)  grows at a constant 3 to 4 percent per year. 
D)  can be called potential GDP when it is adjusted for price changes. 
A)  fluctuates from year to year but is always below potential GDP. 
B)  fluctuates around potential GDP. 
C)  grows at a constant 3 to 4 percent per year. 
D)  can be called potential GDP when it is adjusted for price changes.

Question 9

GDP is defined as the market value of all ________ in a given time period.

Accepted Answer

A)  final goods produced in a country 
B)  final goods and services produced by citizens of a particular country regardless of where in the world they are located 
C)  final goods and services produced in a country by only the citizens of the country 
D)  final goods and services produced in a country 
A)  final goods produced in a country 
B)  final goods and services produced by citizens of a particular country regardless of where in the world they are located 
C)  final goods and services produced in a country by only the citizens of the country 
D)  final goods and services produced in a country

Question 10

-Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Accepted Answer

A)  interest earned on savings deposits 
B)  profits made by businesses 
C)  income earned by businesses that export goods 
D)  investment 
A)  interest earned on savings deposits 
B)  profits made by businesses 
C)  income earned by businesses that export goods 
D)  investment

Question 11

-From the data in the above table, GDP equals

Accepted Answer

A)  $1,120. 
B)  $1,280. 
C)  $1,290. 
D)  $1,360. 
A)  $1,120. 
B)  $1,280. 
C)  $1,290. 
D)  $1,360.

Question 12

The largest component of national income is

Accepted Answer

A)  compensation of employees. 
B)  rental income. 
C)  corporate profits. 
D)  proprietors' income. 
A)  compensation of employees. 
B)  rental income. 
C)  corporate profits. 
D)  proprietors' income.

Question 13

The largest component of income is proprietors' income.

Accepted Answer

A) True 
 B)False

Question 14

Household production is not measured in the GDP.

Accepted Answer

A) True 
 B)False

Question 15

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

Accepted Answer

GDP is the value of the final goods and

Question 16

In the circular flow of economic activity

Accepted Answer

A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets. 
A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets.

Question 17

Rental income includes

Accepted Answer

A)  the payment for the use of land. 
B)  the payment for the use of all rented inputs. 
C)  no income from rental housing because most houses are occupied by their owners. 
D)  Both answers A and B are correct. 
A)  the payment for the use of land. 
B)  the payment for the use of all rented inputs. 
C)  no income from rental housing because most houses are occupied by their owners. 
D)  Both answers A and B are correct.

Question 18

-Which of the following is CORRECT about a time-series graph?
I.The x-axis measures time.
II.A time-series graph can reveal if there is a trend in the variable.

Accepted Answer

A)  only I 
B)  only II 
C)  both I and II 
D)  neither I nor II 
A)  only I 
B)  only II 
C)  both I and II 
D)  neither I nor II

Question 19

The circular flow shows that aggregate spending is larger than aggregate income because people save.

Accepted Answer

A) True 
 B)False

Question 20

Investment, as included in GDP, consists of what?

Accepted Answer

Investment is the purchase of

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

Choose the best statement.

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

-If consumption expenditures are $500 million, net investment is $100 million, depreciation equals $5 million, imports are $50 million, exports are $55 million, government expenditure on goods and services is $220 million, and government transfer payments are $20 million, then GDP is

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person by between 2006 and 2007 in Mexico.

An example of "investment" in the national income accounts is the purchase of

-The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Real GDP

GDP is defined as the market value of all ________ in a given time period.

-Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

-From the data in the above table, GDP equals

The largest component of national income is

The largest component of income is proprietors' income.

Household production is not measured in the GDP.

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

In the circular flow of economic activity

Rental income includes

-Which of the following is CORRECT about a time-series graph? I.The x-axis measures time. II.A time-series graph can reveal if there is a trend in the variable.

The circular flow shows that aggregate spending is larger than aggregate income because people save.

Investment, as included in GDP, consists of what?

What Is Economics?

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring GDP and Economic Growth

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

Choose the best statement.

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

-If consumption expenditures are $500 million, net investment is $100 million, depreciation equals $5 million, imports are $50 million, exports are $55 million, government expenditure on goods and services is $220 million, and government transfer payments are $20 million, then GDP is

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person ________ by ________ between 2006 and 2007 in Mexico.

An example of "investment" in the national income accounts is the purchase of

-The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Real GDP

GDP is defined as the market value of all ________ in a given time period.

-Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

-From the data in the above table, GDP equals

The largest component of national income is

The largest component of income is proprietors' income.

Household production is not measured in the GDP.

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

In the circular flow of economic activity

Rental income includes

-Which of the following is CORRECT about a time-series graph? I.The x-axis measures time. II.A time-series graph can reveal if there is a trend in the variable.

The circular flow shows that aggregate spending is larger than aggregate income because people save.

Investment, as included in GDP, consists of what?

What Is Economics?

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person by between 2006 and 2007 in Mexico.