Question 1

'Potential GDP' is defined as the

Accepted Answer

A)  maximum level of GDP that the economy can produce. 
B)  amount of GDP produced if there is a zero rate of unemployment. 
C)  level of GDP attained when all firms are producing at capacity. 
D)  amount of GDP produced when the economy is in equilibrium. 
A)  maximum level of GDP that the economy can produce. 
B)  amount of GDP produced if there is a zero rate of unemployment. 
C)  level of GDP attained when all firms are producing at capacity. 
D)  amount of GDP produced when the economy is in equilibrium.

Question 2

Refer to Figure 13.1 for the following questions.
Figure 13.1  
-The movement from E to B to D in Figure 13.1 illustrates

Accepted Answer

A)  an improvement in technology. 
B)  a decline in capital per worker. 
C)  diminishing returns to capital. 
D)  increasing returns to labour. 
A)  an improvement in technology. 
B)  a decline in capital per worker. 
C)  diminishing returns to capital. 
D)  increasing returns to labour.

Question 3

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A)  If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B)  Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year-after-year. 
C)  Increases in average prices do not affect the calculation of nominal GDP. 
D)  If real GDP increases from one year to the next, we know that production of goods and services has risen. 
A)  If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B)  Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year-after-year. 
C)  Increases in average prices do not affect the calculation of nominal GDP. 
D)  If real GDP increases from one year to the next, we know that production of goods and services has risen.

Question 4

If GDP grew 3% in 2015,2.8% in 2016 and 2.4% in 2017,then what is the average annual growth rate over this period?

Accepted Answer

A)  5% 
B)  2.7% 
C)  4% 
D)  -2.2% 
A)  5% 
B)  2.7% 
C)  4% 
D)  -2.2%

Question 5

An example of an 'intermediate good' would be

Accepted Answer

A)  the bread that goes into a sandwich sold by a cafe. 
B)  a can of cool drink sold by a supermarket. 
C)  a microwave oven used at home. 
D)  the petrol purchased by consumers for their cars. 
A)  the bread that goes into a sandwich sold by a cafe. 
B)  a can of cool drink sold by a supermarket. 
C)  a microwave oven used at home. 
D)  the petrol purchased by consumers for their cars.

Question 6

Which of the following describes the growth in real GDP per person in Australia from 1901 to 2016?

Accepted Answer

A)  It has decreased more times than it has increased. 
B)  It has increased by more than five times. 
C)  It has doubled. 
D)  Nominal GDP has increased but real GDP has slowly decreased. 
A)  It has decreased more times than it has increased. 
B)  It has increased by more than five times. 
C)  It has doubled. 
D)  Nominal GDP has increased but real GDP has slowly decreased.

Question 7

The following table illustrates the value added in the production of a litre of petrol by each stage of production.(The values are hypothetical,and there are no excise taxes or sales taxes.)
 $\begin{array}{|l|c|l|}
\hline \text { Stage of } & & \
\text { Production } & \text { Value of Sales (\$) } & \text { Value Added (\$) } \
\hline \text { Oil drilling } & 0.60 & \
\hline \text { Refining } & 1.10 & \
\hline \text { Shipping } & 1.35 & \
\hline \text { Retail sales } & 1.45 & \
\hline
\end{array}$ a.What is the value added by each stage of production?
b.What is the total value added?
For simplicity,you can ignore the cost of the inputs for oil drilling.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

\[\begin{array} { | l | c | c | } 
\hlin

Question 8

A change in the ability of a firm to produce a given level of output with a given level of inputs is called

Accepted Answer

A)  human capital investment. 
B)  an increase in labour productivity 
C)  technological change. 
D)  a movement along a given per-worker production function. 
A)  human capital investment. 
B)  an increase in labour productivity 
C)  technological change. 
D)  a movement along a given per-worker production function.

Question 9

The 'per-worker production function' shows the relationship between ________ per hour worked and ________ per hour worked,holding ________ constant.

Accepted Answer

A)  labour; real GDP; technology 
B)  capital; real GDP; technology 
C)  labour; capital; real GDP 
D)  capital; labour; real GDP 
A)  labour; real GDP; technology 
B)  capital; real GDP; technology 
C)  labour; capital; real GDP 
D)  capital; labour; real GDP

Question 10

Which of the following combination of points illustrates changes in the Soviet Union's economy from 1950 to 1980,as illustrated in Figure 13.1?

Accepted Answer

A)  E to B 
B)  B to D 
C)  B to E 
D)  A to B to C 
A)  E to B 
B)  B to D 
C)  B to E 
D)  A to B to C

Question 11

Which of the following would increase gross private domestic investment in an economy?

Accepted Answer

A)  An increase in the shares of Apple stock households own 
B)  An increase in the number of workers Apple hires 
C)  An increase in the level of Apple's inventory 
D)  An increase in the number of highway construction projects the government is funding 
A)  An increase in the shares of Apple stock households own 
B)  An increase in the number of workers Apple hires 
C)  An increase in the level of Apple's inventory 
D)  An increase in the number of highway construction projects the government is funding

Question 12

Which of the following is not considered part of government purchases?

Accepted Answer

A)  Transfer payments paid by the government 
B)  Teacher salaries paid by the government 
C)  Military equipment purchased by the government 
D)  A bridge purchased by the government 
A)  Transfer payments paid by the government 
B)  Teacher salaries paid by the government 
C)  Military equipment purchased by the government 
D)  A bridge purchased by the government

Question 13

Which of the following will result in an increase in labour productivity?

Accepted Answer

A)  A decrease in the number of people attending institutions of higher education 
B)  A decline in the amount of human capital per worker 
C)  An increase in technology 
D)  A decline in the capital stock per hour worked 
A)  A decrease in the number of people attending institutions of higher education 
B)  A decline in the amount of human capital per worker 
C)  An increase in technology 
D)  A decline in the capital stock per hour worked

Question 14

If a Korean firm produces cars in the United States,that production should count toward

Accepted Answer

A)  the USA's GNI. 
B)  Korea's GDP. 
C)  the USA's GDP. 
D)  It will not affect either the USA's GNI or the USA's GDP. 
A)  the USA's GNI. 
B)  Korea's GDP. 
C)  the USA's GDP. 
D)  It will not affect either the USA's GNI or the USA's GDP.

Question 15

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

Accepted Answer

A) True 
 B)False

Question 16

'GDP' is

Accepted Answer

A)  the value of all final goods and services produced in a country during a given time period. 
B)  the sum of consumption, investment, government spending and net exports during a given time period. 
C)  the sum of the market value of final production, rather than the quantity of production, during a given time period. 
D)  All of these options are correct. 
A)  the value of all final goods and services produced in a country during a given time period. 
B)  the sum of consumption, investment, government spending and net exports during a given time period. 
C)  the sum of the market value of final production, rather than the quantity of production, during a given time period. 
D)  All of these options are correct.

Question 17

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Nominal GDP can change because

Question 18

Under what circumstances would the GDP deflator be less than 100 after the base year?

Accepted Answer

A)  The GDP deflator will be less than 100 if there has been inflation relative to the base year. 
B)  The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year. 
C)  The GDP deflator will be less than 100 if there has been deflation relative to the base year. 
D)  There are no circumstances under which the GDP deflator could be less than 100. 
A)  The GDP deflator will be less than 100 if there has been inflation relative to the base year. 
B)  The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year. 
C)  The GDP deflator will be less than 100 if there has been deflation relative to the base year. 
D)  There are no circumstances under which the GDP deflator could be less than 100.

Question 19

If an Australian firm produces televisions in China,that production should count toward

Accepted Answer

A)  Australia's GDP. 
B)  China's GNI. 
C)  Australia's GNI. 
D)  It will not affect either Australia's GNI or Australia's GDP. 
A)  Australia's GDP. 
B)  China's GNI. 
C)  Australia's GNI. 
D)  It will not affect either Australia's GNI or Australia's GDP.

Question 20

The 'GDP deflator' is equal to

Accepted Answer

A)  real GDP divided by nominal GDP. 
B)  nominal GDP divided by real GDP. 
C)  real GDP divided by nominal GDP multiplied by 100. 
D)  nominal GDP divided by real GDP multiplied by 100. 
A)  real GDP divided by nominal GDP. 
B)  nominal GDP divided by real GDP. 
C)  real GDP divided by nominal GDP multiplied by 100. 
D)  nominal GDP divided by real GDP multiplied by 100.

'Potential GDP' is defined as the

Refer to Figure 13.1 for the following questions. Figure 13.1 -The movement from E to B to D in Figure 13.1 illustrates

Which of the following is a true statement about real and nominal GDP?

If GDP grew 3% in 2015,2.8% in 2016 and 2.4% in 2017,then what is the average annual growth rate over this period?

An example of an 'intermediate good' would be

Which of the following describes the growth in real GDP per person in Australia from 1901 to 2016?

A change in the ability of a firm to produce a given level of output with a given level of inputs is called

The 'per-worker production function' shows the relationship between per hour worked and per hour worked,holding constant.

Which of the following combination of points illustrates changes in the Soviet Union's economy from 1950 to 1980,as illustrated in Figure 13.1?

Which of the following would increase gross private domestic investment in an economy?

Which of the following is not considered part of government purchases?

Which of the following will result in an increase in labour productivity?

If a Korean firm produces cars in the United States,that production should count toward

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

'GDP' is

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next? _ _

Under what circumstances would the GDP deflator be less than 100 after the base year?

If an Australian firm produces televisions in China,that production should count toward

The 'GDP deflator' is equal to

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

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Exam 13: Gdp: Measuring Total Production, income and Economic Growth

'Potential GDP' is defined as the

Refer to Figure 13.1 for the following questions. Figure 13.1 -The movement from E to B to D in Figure 13.1 illustrates

Which of the following is a true statement about real and nominal GDP?

If GDP grew 3% in 2015,2.8% in 2016 and 2.4% in 2017,then what is the average annual growth rate over this period?

An example of an 'intermediate good' would be

Which of the following describes the growth in real GDP per person in Australia from 1901 to 2016?

A change in the ability of a firm to produce a given level of output with a given level of inputs is called

The 'per-worker production function' shows the relationship between ________ per hour worked and ________ per hour worked,holding ________ constant.

Which of the following combination of points illustrates changes in the Soviet Union's economy from 1950 to 1980,as illustrated in Figure 13.1?

Which of the following would increase gross private domestic investment in an economy?

Which of the following is not considered part of government purchases?

Which of the following will result in an increase in labour productivity?

If a Korean firm produces cars in the United States,that production should count toward

The circular-flow model demonstrates that the value of total production is equal to the value of total income in an economy.

'GDP' is

Under what circumstances would the GDP deflator be less than 100 after the base year?

If an Australian firm produces televisions in China,that production should count toward

The 'GDP deflator' is equal to

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

The 'per-worker production function' shows the relationship between per hour worked and per hour worked,holding constant.