Question 1

Which of the following correctly lists what is included in the consumption component of GDP?

Accepted Answer

A) household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B) household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C) household purchases of services,nondurable goods,and all durable goods 
D) household purchases of services,nondurable goods,and durable goods other than residential construction 
A) household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B) household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C) household purchases of services,nondurable goods,and all durable goods 
D) household purchases of services,nondurable goods,and durable goods other than residential construction

Question 2

Which of the following is included in the investment component of GDP?

Accepted Answer

A) Elaine pays her college tuition bill. 
B) John's law firm buys him a new computer. 
C) Laura buys a bond that McDonald's sells to raise funds. 
D) All of the above are correct. 
A) Elaine pays her college tuition bill. 
B) John's law firm buys him a new computer. 
C) Laura buys a bond that McDonald's sells to raise funds. 
D) All of the above are correct.

Question 3

The U.S.government pays an economist at the U.S.Department of Commerce $100,000 in salary in 2013.The economist then retires.In 2014,the government pays him $60,000 in Social Security benefits.Which of the following is correct?

Accepted Answer

A) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is included in 2014 GDP as government purchases. 
B) The 2013 payment is included in 2013 GDP as government purchases,but the 2014 payment is not included in 2014 GDP. 
C) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is included in 2014 GDP as government transfer payments. 
D) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year. 
A) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is included in 2014 GDP as government purchases. 
B) The 2013 payment is included in 2013 GDP as government purchases,but the 2014 payment is not included in 2014 GDP. 
C) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is included in 2014 GDP as government transfer payments. 
D) The 2013 payment is included in 2013 GDP as government purchases,and the 2014 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year.

Question 4

Which of the following items is included in GDP?

Accepted Answer

A) the sale of stocks and bonds 
B) the sale of used goods 
C) the sale of services such as those performed by a doctor 
D) All of the above are included in GDP. 
A) the sale of stocks and bonds 
B) the sale of used goods 
C) the sale of services such as those performed by a doctor 
D) All of the above are included in GDP.

Question 5

In the economy of Talikastan in 2015,consumption was $3000,exports were $1200,GDP was $8000,government purchases were $1200,and imports were $600.What was Talikastan's investment in 2015?

Accepted Answer

A) $3200 
B) $5600 
C) $2000 
D) $4400 
A) $3200 
B) $5600 
C) $2000 
D) $4400

Question 6

During the current quarter,a firm produces consumer goods and adds some of those goods to its inventory rather than selling them.The value of the goods added to inventory is

Accepted Answer

A) not included in the current quarter GDP. 
B) included in the current quarter GDP as investment. 
C) included in the current quarter GDP as consumption. 
D) included in the current quarter GDP as a statistical discrepancy. 
A) not included in the current quarter GDP. 
B) included in the current quarter GDP as investment. 
C) included in the current quarter GDP as consumption. 
D) included in the current quarter GDP as a statistical discrepancy.

Question 7

In the economy of Talikastan in 2015,exports were $500,GDP was $6400,government purchases were $1700,imports were $400,and investment was $1800.What was Talikastan's consumption in 2015?

Accepted Answer

A) $2000 
B) $2800 
C) $3000 
D) $3800 
A) $2000 
B) $2800 
C) $3000 
D) $3800

Question 8

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

Accepted Answer

A) U.S.consumption increases,U.S.net exports decrease,and U.S.GDP decreases. 
B) U.S.consumption increases,U.S.net exports decrease,and U.S.GDP is unaffected. 
C) U.S.consumption decreases,U.S.net exports increase,and U.S.GDP increases. 
D) U.S.consumption decreases,U.S.net exports increase,and U.S.GDP is unaffected. 
A) U.S.consumption increases,U.S.net exports decrease,and U.S.GDP decreases. 
B) U.S.consumption increases,U.S.net exports decrease,and U.S.GDP is unaffected. 
C) U.S.consumption decreases,U.S.net exports increase,and U.S.GDP increases. 
D) U.S.consumption decreases,U.S.net exports increase,and U.S.GDP is unaffected.

Question 9

In the economy of Talikastan in 2015,consumption was $3000,GDP was $5500,government purchases were $1000,imports were $1000,and investment was $1000.What were Talikastan's exports in 2015?

Accepted Answer

A) -$500 
B) $500 
C) $1500 
D) $-1500 
A) -$500 
B) $500 
C) $1500 
D) $-1500

Question 10

A Texas household receives a Social Security check for $1500,which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm,a $1240 television made by a Korean firm in Korea,and $220 on groceries from a local store.As a result,U.S.GDP

Accepted Answer

A) increases by $40. 
B) increases by $220. 
C) increases by $280. 
D) increases by $1500. 
A) increases by $40. 
B) increases by $220. 
C) increases by $280. 
D) increases by $1500.

Question 11

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A) capital 
B) consumption 
C) investment 
D) costs 
A) capital 
B) consumption 
C) investment 
D) costs

Question 12

Which of the following is included in the consumption component of U.S.GDP?

Accepted Answer

A) purchases of staplers,paper clips,and pens by U.S.business firms 
B) purchases of natural gas by U.S.households 
C) purchases of newly constructed homes by U.S.households 
D) All of the above are correct. 
A) purchases of staplers,paper clips,and pens by U.S.business firms 
B) purchases of natural gas by U.S.households 
C) purchases of newly constructed homes by U.S.households 
D) All of the above are correct.

Question 13

Which of the following items is counted as part of government purchases?

Accepted Answer

A) The federal government pays the salary of a Navy officer. 
B) The state of Nevada pays a private firm to repair a Nevada state highway. 
C) The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D) All of the above are correct. 
A) The federal government pays the salary of a Navy officer. 
B) The state of Nevada pays a private firm to repair a Nevada state highway. 
C) The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D) All of the above are correct.

Question 14

GDP is equal to

Accepted Answer

A) the market value of all final goods and services produced within a country in a given period of time. 
B) Y. 
C) C + I + G + NX. 
D) All of the above are correct. 
A) the market value of all final goods and services produced within a country in a given period of time. 
B) Y. 
C) C + I + G + NX. 
D) All of the above are correct.

Question 15

In the economy of Talikastan in 2015,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Talikastan's net exports in 2015?

Accepted Answer

A) -$250 
B) $250 
C) $2200 
D) Net exports cannot be calculated from the information given. 
A) -$250 
B) $250 
C) $2200 
D) Net exports cannot be calculated from the information given.

Question 16

In the equation Y = C + I + G + NX,

Accepted Answer

A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct. 
A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct.

Question 17

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

A) then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B) then GDP will be higher,but consumption spending will be unchanged. 
C) then GDP will be unchanged,but consumption spending will be higher. 
D) then both GDP and consumption spending will be higher. 
A) then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B) then GDP will be higher,but consumption spending will be unchanged. 
C) then GDP will be unchanged,but consumption spending will be higher. 
D) then both GDP and consumption spending will be higher.

Question 18

Social Security payments are

Accepted Answer

A) included in GDP because they represent current income. 
B) included in GDP because they represent potential consumption. 
C) excluded from GDP because they are not private pensions. 
D) excluded from GDP because they do not reflect the economy's production. 
A) included in GDP because they represent current income. 
B) included in GDP because they represent potential consumption. 
C) excluded from GDP because they are not private pensions. 
D) excluded from GDP because they do not reflect the economy's production.

Question 19

Unemployment compensation is

Accepted Answer

A) part of GDP because it represents income. 
B) part of GDP because the recipients must have worked in the past to qualify. 
C) not part of GDP because it is a transfer payment. 
D) not part of GDP because the payments reduce business profits. 
A) part of GDP because it represents income. 
B) part of GDP because the recipients must have worked in the past to qualify. 
C) not part of GDP because it is a transfer payment. 
D) not part of GDP because the payments reduce business profits.

Question 20

In 2015,U.S.GDP was almost

Accepted Answer

A) $18 trillion. 
B) $15 trillion. 
C) $14 trillion. 
D) $12 trillion. 
A) $18 trillion. 
B) $15 trillion. 
C) $14 trillion. 
D) $12 trillion.

Exam 10: Measuring a Nations Income: The Components of GDP

Which of the following correctly lists what is included in the consumption component of GDP?

Which of the following is included in the investment component of GDP?

The U.S.government pays an economist at the U.S.Department of Commerce $100,000 in salary in 2013.The economist then retires.In 2014,the government pays him $60,000 in Social Security benefits.Which of the following is correct?

Which of the following items is included in GDP?

In the economy of Talikastan in 2015,consumption was $3000,exports were $1200,GDP was $8000,government purchases were $1200,and imports were $600.What was Talikastan's investment in 2015?

During the current quarter,a firm produces consumer goods and adds some of those goods to its inventory rather than selling them.The value of the goods added to inventory is

In the economy of Talikastan in 2015,exports were $500,GDP was $6400,government purchases were $1700,imports were $400,and investment was $1800.What was Talikastan's consumption in 2015?

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

In the economy of Talikastan in 2015,consumption was $3000,GDP was $5500,government purchases were $1000,imports were $1000,and investment was $1000.What were Talikastan's exports in 2015?

A Texas household receives a Social Security check for $1500,which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm,a $1240 television made by a Korean firm in Korea,and $220 on groceries from a local store.As a result,U.S.GDP

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Which of the following is included in the consumption component of U.S.GDP?

Which of the following items is counted as part of government purchases?

GDP is equal to

In the economy of Talikastan in 2015,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Talikastan's net exports in 2015?

In the equation Y = C + I + G + NX,

If you buy a burger and fries at your favorite fast food restaurant,

Social Security payments are

Unemployment compensation is

In 2015,U.S.GDP was almost

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion