Question 1

Because of transactions which take place in the underground economy, the:

Accepted Answer

A)  GDP calculation tends to overstate the actual value of goods sold in the economy. 
B)  GDP calculation tends to accurately portray the value of goods sold in the economy. 
C)  GDP calculation tends to understate the actual value of goods sold in the economy. 
D)  value of the GDP calculation will be equal to the value of the national income
Calculation. 
A)  GDP calculation tends to overstate the actual value of goods sold in the economy. 
B)  GDP calculation tends to accurately portray the value of goods sold in the economy. 
C)  GDP calculation tends to understate the actual value of goods sold in the economy. 
D)  value of the GDP calculation will be equal to the value of the national income
Calculation.

Question 2

GDP:

Accepted Answer

A)  is the dollar value of all the final goods and services produced within the borders of a nation. 
B)  includes intermediate and final goods and services. 
C)  minus an allowance for depreciation of fixed capital equals GNP. 
D)  is a less-than-perfect measure of social wellbeing because it does not include exports and imports. 
A)  is the dollar value of all the final goods and services produced within the borders of a nation. 
B)  includes intermediate and final goods and services. 
C)  minus an allowance for depreciation of fixed capital equals GNP. 
D)  is a less-than-perfect measure of social wellbeing because it does not include exports and imports.

Question 3

Narrbegin Exhibit 11.3 GDP data (billions of dollars)
 $\begin{array}{|l|r|}
\hline \text { Capital depreciation } & 950 \
\hline \text { Change in business inventory } & 50 \
\hline \text { Compensation of employees } & 5000 \
\hline \text { Corporate profit } & 600 \
\hline \text { Durable goods } & 600 \
\hline \text { Exports } & 100 \
\hline \text { Factor payments from the rest of the world } & 360 \
\hline \text { Factor payments to the rest of the world } & 300 \
\hline \text { Farm income } & 300 \
\hline \text { Gross private domestic investment } & 1000 \
\hline \text { Government spending } & 800 \
\hline \text { Imports } & 150 \
\hline \text { Net interest } & 500 \
\hline \text { Non-durable goods } & 2000 \
\hline \text { Non-farm income } & 700 \
\hline \text { Proprietors' income } & 1000 \
\hline \text { Rental income } & 100 \
\hline \text { Services } & 4000\
\hline 
\end{array}$
 
-Use the information in Exhibit 11.3 to compute net exports. Which of the following is correct?

Accepted Answer

A)  $100 billion. 
B)  $150 billion. 
C)  $250 billion. 
D)  -$50 billion. 
A)  $100 billion. 
B)  $150 billion. 
C)  $250 billion. 
D)  -$50 billion.

Question 4

A current account surplus cannot be balanced by a capital account deficit of the same size.

Accepted Answer

A) True 
 B)False

Because of transactions which take place in the underground economy, the:

GDP:

A current account surplus cannot be balanced by a capital account deficit of the same size.

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 12: Measuring the Size of the Economy

Because of transactions which take place in the underground economy, the:

GDP:

A current account surplus cannot be balanced by a capital account deficit of the same size.

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters