Question 1

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Accepted Answer

A) CPI; real GDP; nominal GDP 
B) GDP deflator; real GDP; nominal GDP 
C) GDP deflator; nominal GDP; real GDP 
D) PPI; nominal GDP; real GDP 
E) PPI; real GDP; nominal GDP 
A) CPI; real GDP; nominal GDP 
B) GDP deflator; real GDP; nominal GDP 
C) GDP deflator; nominal GDP; real GDP 
D) PPI; nominal GDP; real GDP 
E) PPI; real GDP; nominal GDP

Question 2

The size of the underground economy would tend to decrease if the government of a country

Accepted Answer

A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes. 
A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes.

Question 3

The factors of production include

Accepted Answer

A) wages. 
B) capital. 
C) investment. 
D) transfers. 
A) wages. 
B) capital. 
C) investment. 
D) transfers.

Question 4

Investment,as defined by economists,would not include which of the following? Ford

Accepted Answer

A) buys a new robotic machine (from a plant in Ohio)to assemble cars. 
B) adds 1,000 new cars to inventories. 
C) builds another assembly plant in the United States. 
D) buys U.S.government bonds. 
A) buys a new robotic machine (from a plant in Ohio)to assemble cars. 
B) adds 1,000 new cars to inventories. 
C) builds another assembly plant in the United States. 
D) buys U.S.government bonds.

Question 5

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so,how?

Accepted Answer

We would double count if we co

Question 6

Depreciation is

Accepted Answer

A) the value of worn-out equipment,machinery,and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market,net of dividends. 
A) the value of worn-out equipment,machinery,and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market,net of dividends.

Question 7

Gross national product,GNP,of the United States is the market value of all final goods and services

Accepted Answer

A) produced within the United States. 
B) consumed within the United States. 
C) produced by citizens of the United States anywhere in the world. 
D) consumed by citizens of the United States anywhere in the world. 
A) produced within the United States. 
B) consumed within the United States. 
C) produced by citizens of the United States anywhere in the world. 
D) consumed by citizens of the United States anywhere in the world.

Question 8

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Accepted Answer

A) chained-weighted prices. 
B) fixed-weight prices. 
C) current-year prices. 
D) fixed base-year prices. 
A) chained-weighted prices. 
B) fixed-weight prices. 
C) current-year prices. 
D) fixed base-year prices.

Question 9

Table 8-19
  
-Refer to Table 8-19.Given the information above,calculate the GDP deflator in 2012.

Accepted Answer

A) 87 
B) 95 
C) 105 
D) 114 
A) 87 
B) 95 
C) 105 
D) 114

Question 10

Nominal GDP is GDP in a given year

Accepted Answer

A) adjusted for inflation. 
B) adjusted for anticipated inflation. 
C) valued in the prices of that year. 
D) valued in the prices of the base year. 
A) adjusted for inflation. 
B) adjusted for anticipated inflation. 
C) valued in the prices of that year. 
D) valued in the prices of the base year.

Question 11

The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100.

Accepted Answer

A) True 
 B)False

Question 12

If real GDP in 2013 (using 2009 prices)is lower than nominal GDP of 2012,then

Accepted Answer

A) prices in 2013 are lower than prices in 2012. 
B) nominal GDP in 2013 equals nominal GDP in 2012. 
C) prices in 2013 are higher than prices in 2012. 
D) real GDP in 2013 is larger than real GDP in 2012. 
A) prices in 2013 are lower than prices in 2012. 
B) nominal GDP in 2013 equals nominal GDP in 2012. 
C) prices in 2013 are higher than prices in 2012. 
D) real GDP in 2013 is larger than real GDP in 2012.

Question 13

Table 8-27
   The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars.
-Refer to Table 8-27.What is the level of disposable personal income for this economy?

Accepted Answer

A) $1,080 billion 
B) $1,010 billion 
C) $980 billion 
D) $860 billion 
A) $1,080 billion 
B) $1,010 billion 
C) $980 billion 
D) $860 billion

Question 14

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

Accepted Answer

A) GNP is much larger than GDP. 
B) GDP is much larger than GNP. 
C) GDP is equal to GNP. 
D) GDP is not comparable to GDP. 
A) GNP is much larger than GDP. 
B) GDP is much larger than GNP. 
C) GDP is equal to GNP. 
D) GDP is not comparable to GDP.

Question 15

For developed countries like the United States,GDP will always exceed GNP.

Accepted Answer

A) True 
 B)False

Question 16

Table 8-9
  
-Refer to Table 8-9.Suppose that the above table represents the goods and services produced in a very simple economy in 2013.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2013.

Accepted Answer

First,we must decide which goods to incl

Question 17

GDP is not a perfect measure of well-being because

Accepted Answer

A) the value of leisure is included in GDP. 
B) GDP is not adjusted for pollution. 
C) GDP is adjusted for changes in crime rates. 
D) GDP is adjusted for increases in drug addiction. 
A) the value of leisure is included in GDP. 
B) GDP is not adjusted for pollution. 
C) GDP is adjusted for changes in crime rates. 
D) GDP is adjusted for increases in drug addiction.

Question 18

Table 8-18
   A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above.
-Refer to Table 8-18.What is real GDP in 2013,using 2013 as the base year?

Accepted Answer

A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275

Question 19

Table 8-5
   Consider the table above showing three stages of production of an automobile.
-Refer to Table 8-5.The value of each automobile in gross domestic product equals

Accepted Answer

A) $7,000. 
B) $15,000. 
C) $18,000. 
D) $25,000. 
A) $7,000. 
B) $15,000. 
C) $18,000. 
D) $25,000.

Question 20

Table 8-18
   A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above.
-Refer to Table 8-18.What is the GDP deflator in 2008 if 2013 is the base year?

Accepted Answer

A) 187 
B) 87 
C) 8.7 
D) 0.87 
A) 187 
B) 87 
C) 8.7 
D) 0.87

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

The size of the underground economy would tend to decrease if the government of a country

The factors of production include

Investment,as defined by economists,would not include which of the following? Ford

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so,how?

Depreciation is

Gross national product,GNP,of the United States is the market value of all final goods and services

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Table 8-19 -Refer to Table 8-19.Given the information above,calculate the GDP deflator in 2012.

Nominal GDP is GDP in a given year

The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100.

If real GDP in 2013 (using 2009 prices)is lower than nominal GDP of 2012,then

Table 8-27 The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars. -Refer to Table 8-27.What is the level of disposable personal income for this economy?

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

For developed countries like the United States,GDP will always exceed GNP.

Table 8-9 -Refer to Table 8-9.Suppose that the above table represents the goods and services produced in a very simple economy in 2013.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2013.

GDP is not a perfect measure of well-being because

Table 8-18 A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above. -Refer to Table 8-18.What is real GDP in 2013,using 2013 as the base year?

Table 8-5 Consider the table above showing three stages of production of an automobile. -Refer to Table 8-5.The value of each automobile in gross domestic product equals

Table 8-18 A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above. -Refer to Table 8-18.What is the GDP deflator in 2008 if 2013 is the base year?

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 8: GDP: Measuring Total Production and Income

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

The size of the underground economy would tend to decrease if the government of a country

The factors of production include

Investment,as defined by economists,would not include which of the following? Ford

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so,how?

Depreciation is

Gross national product,GNP,of the United States is the market value of all final goods and services

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Table 8-19 -Refer to Table 8-19.Given the information above,calculate the GDP deflator in 2012.

Nominal GDP is GDP in a given year

The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100.

If real GDP in 2013 (using 2009 prices)is lower than nominal GDP of 2012,then

Table 8-27 The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars. -Refer to Table 8-27.What is the level of disposable personal income for this economy?

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

For developed countries like the United States,GDP will always exceed GNP.

Table 8-9 -Refer to Table 8-9.Suppose that the above table represents the goods and services produced in a very simple economy in 2013.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2013.

GDP is not a perfect measure of well-being because

Table 8-18 A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above. -Refer to Table 8-18.What is real GDP in 2013,using 2013 as the base year?

Table 8-5 Consider the table above showing three stages of production of an automobile. -Refer to Table 8-5.The value of each automobile in gross domestic product equals

Table 8-18 A very simple economy produces three goods: cameras,legal services,and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above. -Refer to Table 8-18.What is the GDP deflator in 2008 if 2013 is the base year?

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The is a measure of the price level and is calculated by dividing by and multiplying by 100.