Question 1

Is it possible for nominal GDP to increase while real GDP does not change?

Accepted Answer

Yes, it is possible for nominal GDP to i

Question 2

-Nominal GDP is the value of final goods and services

Accepted Answer

A)  at the prices of that year. 
B)  at the prices of the immediately previous year. 
C)  at the prices of a base year. 
D)  produced in foreign countries but consumed in the domestic country. 
A)  at the prices of that year. 
B)  at the prices of the immediately previous year. 
C)  at the prices of a base year. 
D)  produced in foreign countries but consumed in the domestic country.

Question 3

-Which of the following is TRUE regarding a trend?
I.A cross section graph shows trends.
II.A time-series graph shows trends.
III.A scatter plot shows trends over time.

Accepted Answer

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

Question 4

Government expenditures included in the expenditure approach to GDP include ________.

Accepted Answer

A)  Social Security and education 
B)  net exports 
C)  buying a new bomber 
D)  Both answers A and C are correct. 
A)  Social Security and education 
B)  net exports 
C)  buying a new bomber 
D)  Both answers A and C are correct.

Question 5

An expansion ends when the economy hits a trough and then enters a recession.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is NOT part of GDP calculated using the expenditure approach?

Accepted Answer

A)  General Motors' purchases of new capital equipment 
B)  expenditures by the federal government for national defense 
C)  Social Security payments made to the elderly 
D)  the purchase of new homes by consumers 
A)  General Motors' purchases of new capital equipment 
B)  expenditures by the federal government for national defense 
C)  Social Security payments made to the elderly 
D)  the purchase of new homes by consumers

Question 7

Which of the following statements about the comparison between GDP in China and in the United States is CORRECT?

Accepted Answer

A)  Using the exchange rate to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. 
B)  Using purchasing power parity prices to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. 
C)  China's GDP per person is higher using purchasing power parity prices rather than the exchange rate when valuing China's GDP in dollars. 
D)  None of the above answers are correct because they are all false statements. 
A)  Using the exchange rate to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. 
B)  Using purchasing power parity prices to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. 
C)  China's GDP per person is higher using purchasing power parity prices rather than the exchange rate when valuing China's GDP in dollars. 
D)  None of the above answers are correct because they are all false statements.

Question 8

________ refers to a period when the ________ decreases.

Accepted Answer

A)  Recession; growth rate of nominal GDP 
B)  Recession; growth rate of output per person 
C)  Productivity growth slowdown; growth rate of real GDP 
D)  Productivity growth slowdown; growth rate of output per person 
A)  Recession; growth rate of nominal GDP 
B)  Recession; growth rate of output per person 
C)  Productivity growth slowdown; growth rate of real GDP 
D)  Productivity growth slowdown; growth rate of output per person

Question 9

GDP counts only final goods and services because this

Accepted Answer

A)  method avoids including any goods that are produced this year and sold next year. 
B)  method avoids double counting of goods going through several stages of production. 
C)  amount can be more easily determined in the marketplace. 
D)  method avoids understating the value of GDP produced during a given year. 
A)  method avoids including any goods that are produced this year and sold next year. 
B)  method avoids double counting of goods going through several stages of production. 
C)  amount can be more easily determined in the marketplace. 
D)  method avoids understating the value of GDP produced during a given year.

Question 10

If an American firm produces goods that are sold to a German household, then

Accepted Answer

A)  German GDP increases but not U.S. GDP. 
B)  U.S. GDP increases. 
C)  the transaction is considered an export in the German GDP accounts. 
D)  net exports in the United States will not change because an export immediately generates an offsetting import. 
A)  German GDP increases but not U.S. GDP. 
B)  U.S. GDP increases. 
C)  the transaction is considered an export in the German GDP accounts. 
D)  net exports in the United States will not change because an export immediately generates an offsetting import.

Question 11

Which of the following is not a component of the incomes approach to GDP?

Accepted Answer

A)  net exports 
B)  wages and salaries 
C)  corporate profits 
D)  proprietors' income 
A)  net exports 
B)  wages and salaries 
C)  corporate profits 
D)  proprietors' income

Question 12

In the circular flow diagram, aggregate expenditure includes the sum of

Accepted Answer

A)  saving and investment. 
B)  consumption and investment. 
C)  consumption, investment, and saving. 
D)  income and saving. 
A)  saving and investment. 
B)  consumption and investment. 
C)  consumption, investment, and saving. 
D)  income and saving.

Question 13

-The use of purchasing power parity prices

Accepted Answer

A)  decreases the real GDP per person statistics published by the International Monetary Fund. 
B)  weakens the validity of cross country comparisons of economic welfare. 
C)  increases the amount by which U.S. GDP is larger than that of any other nation. 
D)  accounts for differences in the prices of the same goods in different countries when measuring real GDP. 
A)  decreases the real GDP per person statistics published by the International Monetary Fund. 
B)  weakens the validity of cross country comparisons of economic welfare. 
C)  increases the amount by which U.S. GDP is larger than that of any other nation. 
D)  accounts for differences in the prices of the same goods in different countries when measuring real GDP.

Question 14

-Using the data in the above table, what is the value of net exports?

Accepted Answer

A)  -$181 billion 
B)  $181 billion 
C)  $957 billion 
D)  -$957 billion 
A)  -$181 billion 
B)  $181 billion 
C)  $957 billion 
D)  -$957 billion

Question 15

In the national income accounts, government expenditure on goods and services exclude

Accepted Answer

A)  transfer payments. 
B)  state and local government purchases. 
C)  local government purchases but include state government purchases. 
D)  spending on national defense. 
A)  transfer payments. 
B)  state and local government purchases. 
C)  local government purchases but include state government purchases. 
D)  spending on national defense.

Question 16

-Which of the following expressions equals GDP?

Accepted Answer

A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies 
A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies

Question 17

The business cycle is the

Accepted Answer

A)  regular growth rate of the real GDP. 
B)  regular fluctuations of real GDP below potential GDP. 
C)  irregular fluctuations of prices around real GDP. 
D)  irregular fluctuations of real GDP around potential GDP. 
A)  regular growth rate of the real GDP. 
B)  regular fluctuations of real GDP below potential GDP. 
C)  irregular fluctuations of prices around real GDP. 
D)  irregular fluctuations of real GDP around potential GDP.

Question 18

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement CORRECT?

Accepted Answer

Your friend's assertion is incorrect on

Question 19

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and ________.

Accepted Answer

A)  government expenditures on goods and services 
B)  saving 
C)  profits 
D)  net taxes 
A)  government expenditures on goods and services 
B)  saving 
C)  profits 
D)  net taxes

Question 20

-The horizontal axis on a time-series graph

Accepted Answer

A)  measures the variable being graphed. 
B)  measures units of time such as years. 
C)  runs parallel to the y-axis. 
D)  measures how the variable being graphed changes. 
A)  measures the variable being graphed. 
B)  measures units of time such as years. 
C)  runs parallel to the y-axis. 
D)  measures how the variable being graphed changes.

Is it possible for nominal GDP to increase while real GDP does not change?

-Nominal GDP is the value of final goods and services

-Which of the following is TRUE regarding a trend? I.A cross section graph shows trends. II.A time-series graph shows trends. III.A scatter plot shows trends over time.

Government expenditures included in the expenditure approach to GDP include ________.

An expansion ends when the economy hits a trough and then enters a recession.

Which of the following is NOT part of GDP calculated using the expenditure approach?

Which of the following statements about the comparison between GDP in China and in the United States is CORRECT?

refers to a period when the decreases.

GDP counts only final goods and services because this

If an American firm produces goods that are sold to a German household, then

Which of the following is not a component of the incomes approach to GDP?

In the circular flow diagram, aggregate expenditure includes the sum of

-The use of purchasing power parity prices

-Using the data in the above table, what is the value of net exports?

In the national income accounts, government expenditure on goods and services exclude

-Which of the following expressions equals GDP?

The business cycle is the

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement CORRECT?

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and ________.

-The horizontal axis on a time-series graph

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

Is it possible for nominal GDP to increase while real GDP does not change?

-Nominal GDP is the value of final goods and services

-Which of the following is TRUE regarding a trend? I.A cross section graph shows trends. II.A time-series graph shows trends. III.A scatter plot shows trends over time.

Government expenditures included in the expenditure approach to GDP include ________.

An expansion ends when the economy hits a trough and then enters a recession.

Which of the following is NOT part of GDP calculated using the expenditure approach?

Which of the following statements about the comparison between GDP in China and in the United States is CORRECT?

________ refers to a period when the ________ decreases.

GDP counts only final goods and services because this

If an American firm produces goods that are sold to a German household, then

Which of the following is not a component of the incomes approach to GDP?

In the circular flow diagram, aggregate expenditure includes the sum of

-The use of purchasing power parity prices

-Using the data in the above table, what is the value of net exports?

In the national income accounts, government expenditure on goods and services exclude

-Which of the following expressions equals GDP?

The business cycle is the

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement CORRECT?

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and ________.

-The horizontal axis on a time-series graph

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

refers to a period when the decreases.