Question 1

GDP does not directly include intermediate goods because

Accepted Answer

A)  intermediate goods are not valuable. 
B)  intermediate goods are not useful to consumers. 
C)  that would count the intermediate goods twice. 
D)  that would understate the true size of GDP. 
A)  intermediate goods are not valuable. 
B)  intermediate goods are not useful to consumers. 
C)  that would count the intermediate goods twice. 
D)  that would understate the true size of GDP.

Question 2

Net investment equals

Accepted Answer

A)  gross investment + depreciation. 
B)  depreciation + addition to inventories. 
C)  savings - depreciation. 
D)  gross investment - depreciation. 
A)  gross investment + depreciation. 
B)  depreciation + addition to inventories. 
C)  savings - depreciation. 
D)  gross investment - depreciation.

Question 3

Which of the following expenditures is for an intermediate good?

Accepted Answer

A)  The government buys new tires for its military vehicles. 
B)  A U.S. tire firm sells new tires to Canada. 
C)  General Motors buys new tires to put on the cars it's building. 
D)  You buy new tires for your used car. 
A)  The government buys new tires for its military vehicles. 
B)  A U.S. tire firm sells new tires to Canada. 
C)  General Motors buys new tires to put on the cars it's building. 
D)  You buy new tires for your used car.

Question 4

Gross domestic product (GDP)is the ________ in a given time period.

Accepted Answer

A)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
D)  market value of final goods and services produced by the economy 
A)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
B)  sum of wage and salary compensation of employees and corporate profits 
C)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
D)  market value of final goods and services produced by the economy

Question 5

-In the above figure, flow B represents households' ________.

Accepted Answer

A)  income 
B)  consumption expenditures 
C)  saving 
D)  investment 
A)  income 
B)  consumption expenditures 
C)  saving 
D)  investment

Question 6

The expenditure approach to measuring GDP includes firms' spending on wages.

Accepted Answer

A) True 
 B)False

Question 7

-The above table gives data for a hypothetical nation. Gross domestic product is

Accepted Answer

A)  $4,049 billion. 
B)  $4,079 billion. 
C)  $4,054 billion. 
D)  $4,339 billion. 
A)  $4,049 billion. 
B)  $4,079 billion. 
C)  $4,054 billion. 
D)  $4,339 billion.

Question 8

Which of the following is NOT included in real GDP?

Accepted Answer

A)  production of services, such as the services of hair dressers 
B)  production of goods that last less than a year, such as production of hot dogs 
C)  production that takes place in the underground economy 
D)  production of goods that last more than a year, such as a pair of roller blades 
A)  production of services, such as the services of hair dressers 
B)  production of goods that last less than a year, such as production of hot dogs 
C)  production that takes place in the underground economy 
D)  production of goods that last more than a year, such as a pair of roller blades

Question 9

-Trend refers to

Accepted Answer

A)  the scale used on the x- and y-coordinates. 
B)  increases but not decreases of a variable. 
C)  decreases but not increases of a variable. 
D)  a general tendency for a variable to rise or fall. 
A)  the scale used on the x- and y-coordinates. 
B)  increases but not decreases of a variable. 
C)  decreases but not increases of a variable. 
D)  a general tendency for a variable to rise or fall.

Question 10

-Real GDP is not a perfect indicator of economic welfare because ________.

Accepted Answer

A)  it includes the underground economy 
B)  it includes a direct measure of health and life expectancy 
C)  it underestimates inflation 
D)  economic welfare depends on many factors not measured or not measured accurately by real GDP 
A)  it includes the underground economy 
B)  it includes a direct measure of health and life expectancy 
C)  it underestimates inflation 
D)  economic welfare depends on many factors not measured or not measured accurately by real GDP

Question 11

On a time-series graph with a ratio scale

Accepted Answer

A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend. 
A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend.

Question 12

A business cycle is the pattern of short-run upward and downward movements in production and jobs.

Accepted Answer

A) True 
 B)False

Question 13

Aggregate expenditures include all of the following EXCEPT

Accepted Answer

A)  consumption of food. 
B)  purchases of intermediate goods. 
C)  purchases of a piece of capital equipment. 
D)  purchases of guns by the government. 
A)  consumption of food. 
B)  purchases of intermediate goods. 
C)  purchases of a piece of capital equipment. 
D)  purchases of guns by the government.

Question 14

Gross domestic product (GDP)is

Accepted Answer

A)  the value of all final goods and services produced in a country during a year. 
B)  the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports. 
C)  the sum of compensation of employees, proprietors' income, net interest, rental income, corporate profits, depreciation, and indirect business taxes minus subsidies. 
D)  all of the above. 
A)  the value of all final goods and services produced in a country during a year. 
B)  the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports. 
C)  the sum of compensation of employees, proprietors' income, net interest, rental income, corporate profits, depreciation, and indirect business taxes minus subsidies. 
D)  all of the above.

Question 15

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany

Accepted Answer

A)  U.S. GDP increases because it sells more Explorers. 
B)  U.S. GDP decreases because net exports are negative. 
C)  Germany's GDP decreases. 
D)  U.S. net exports is positive. 
A)  U.S. GDP increases because it sells more Explorers. 
B)  U.S. GDP decreases because net exports are negative. 
C)  Germany's GDP decreases. 
D)  U.S. net exports is positive.

Question 16

Which of the following is NOT a reason that real GDP is a poor measure of a nation's economic welfare?

Accepted Answer

A)  Real GDP omits measures of political freedom. 
B)  Real GDP does not take into account the value of people's leisure time. 
C)  Real GDP does not include the underground economy. 
D)  Real GDP overvalues household production. 
A)  Real GDP omits measures of political freedom. 
B)  Real GDP does not take into account the value of people's leisure time. 
C)  Real GDP does not include the underground economy. 
D)  Real GDP overvalues household production.

Question 17

-Using the information in the table above, depreciation equals

Accepted Answer

A)  -$90 billion. 
B)  $90 billion. 
C)  -$70 billion. 
D)  some amount that cannot be determined. 
A)  -$90 billion. 
B)  $90 billion. 
C)  -$70 billion. 
D)  some amount that cannot be determined.

Question 18

An expansion occurs when the level of real GDP is

Accepted Answer

A)  increasing. 
B)  decreasing. 
C)  at a cyclical peak. 
D)  at a cyclical trough. 
A)  increasing. 
B)  decreasing. 
C)  at a cyclical peak. 
D)  at a cyclical trough.

Question 19

Which of the following is TRUE regarding the chain-weighted output index method?
I.It is the method used to measure the growth rate of nominal GDP.
II.It uses data from the current year and from the previous year.
III.It is a method of measuring the growth rate of real GDP.

Accepted Answer

A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II and III 
A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II and III

Question 20

How do firms and households interact within the context of the circular flow model?

Accepted Answer

Households are the owners of the factors

GDP does not directly include intermediate goods because

Net investment equals

Which of the following expenditures is for an intermediate good?

Gross domestic product (GDP)is the ________ in a given time period.

-In the above figure, flow B represents households' ________.

The expenditure approach to measuring GDP includes firms' spending on wages.

-The above table gives data for a hypothetical nation. Gross domestic product is

Which of the following is NOT included in real GDP?

-Trend refers to

-Real GDP is not a perfect indicator of economic welfare because ________.

On a time-series graph with a ratio scale

A business cycle is the pattern of short-run upward and downward movements in production and jobs.

Aggregate expenditures include all of the following EXCEPT

Gross domestic product (GDP)is

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany

Which of the following is NOT a reason that real GDP is a poor measure of a nation's economic welfare?

-Using the information in the table above, depreciation equals

An expansion occurs when the level of real GDP is

Which of the following is TRUE regarding the chain-weighted output index method? I.It is the method used to measure the growth rate of nominal GDP. II.It uses data from the current year and from the previous year. III.It is a method of measuring the growth rate of real GDP.

How do firms and households interact within the context of the circular flow model?

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

GDP does not directly include intermediate goods because

Net investment equals

Which of the following expenditures is for an intermediate good?

Gross domestic product (GDP)is the ________ in a given time period.

-In the above figure, flow B represents households' ________.

The expenditure approach to measuring GDP includes firms' spending on wages.

-The above table gives data for a hypothetical nation. Gross domestic product is

Which of the following is NOT included in real GDP?

-Trend refers to

-Real GDP is not a perfect indicator of economic welfare because ________.

On a time-series graph with a ratio scale

A business cycle is the pattern of short-run upward and downward movements in production and jobs.

Aggregate expenditures include all of the following EXCEPT

Gross domestic product (GDP)is

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany

Which of the following is NOT a reason that real GDP is a poor measure of a nation's economic welfare?

-Using the information in the table above, depreciation equals

An expansion occurs when the level of real GDP is

Which of the following is TRUE regarding the chain-weighted output index method? I.It is the method used to measure the growth rate of nominal GDP. II.It uses data from the current year and from the previous year. III.It is a method of measuring the growth rate of real GDP.

How do firms and households interact within the context of the circular flow model?

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