Question 1

Net exports equal

Accepted Answer

A) exports plus imports. 
B) imports minus exports. 
C) Y - (C + I + G). 
D) Y - (C - I - G). 
A) exports plus imports. 
B) imports minus exports. 
C) Y - (C + I + G). 
D) Y - (C - I - G).

Question 2

Which of the following is not an example of a durable good?

Accepted Answer

A) a refrigerator. 
B) an automobile. 
C) a business suit. 
D) a furnace. 
A) a refrigerator. 
B) an automobile. 
C) a business suit. 
D) a furnace.

Question 3

A German citizen buys an automobile produced in the United States by a Japanese company.As a result,

Accepted Answer

A) U.S.net exports increase,U.S.GDP is unaffected,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected. 
B) U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,German GNP is unaffected,and German GDP decreases. 
C) U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected. 
D) U.S.net exports and GDP are unaffected,Japanese GNP increases,and German net exports,GNP,and GDP decrease. 
A) U.S.net exports increase,U.S.GDP is unaffected,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected. 
B) U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,German GNP is unaffected,and German GDP decreases. 
C) U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected. 
D) U.S.net exports and GDP are unaffected,Japanese GNP increases,and German net exports,GNP,and GDP decrease.

Question 4

To encourage formation of small businesses,the government could provide subsidies;these subsidies

Accepted Answer

A) would be included in GDP because they are part of government purchases. 
B) would be included in GDP because they are part of investment expenditures. 
C) would not be included in GDP because they are transfer payments. 
D) would not be included in GDP because the government raises taxes to pay for them. 
A) would be included in GDP because they are part of government purchases. 
B) would be included in GDP because they are part of investment expenditures. 
C) would not be included in GDP because they are transfer payments. 
D) would not be included in GDP because the government raises taxes to pay for them.

Question 5

During the third quarter of this year a firm produces consumer goods and adds some of those goods to its inventory.During the fourth quarter of this year,the firm sells the goods at a retail outlet,with the result that the value of its inventory at the end of the fourth quarter is smaller than the value of its inventory at the end of the third quarter.These actions affect which component(s)of fourth-quarter GDP?

Accepted Answer

A) they increase consumption and have no affect on investment 
B) they increase consumption and decrease investment 
C) they have no affect on either consumption or investment 
D) they have no affect on consumption and decrease investment 
A) they increase consumption and have no affect on investment 
B) they increase consumption and decrease investment 
C) they have no affect on either consumption or investment 
D) they have no affect on consumption and decrease investment

Question 6

In 2015,GDP per person in the United States was almost

Accepted Answer

A) $38,000. 
B) $36,000. 
C) $49,000 
D) $56,000 
A) $38,000. 
B) $36,000. 
C) $49,000 
D) $56,000

Question 7

In the economy of Talikastan in 2015,consumption was two-thirds of GDP,government purchases were $1000 more than investment,investment was one-ninth of GDP,and the value of exports exceeded the value of imports by $500.What was Talikastan's GDP in 2015?

Accepted Answer

A) $1688 
B) $9000 
C) $13,500 
D) $15,000 
A) $1688 
B) $9000 
C) $13,500 
D) $15,000

Question 8

In the economy of Talikastan in 2015,consumption was 75% of GDP,government purchases were $200,imports were $50 and 125% of the value of exports,investment was one-sixth of the value of consumption.What was Talikastan's GDP in 2015?

Accepted Answer

A) $218 
B) $2500 
C) $1520 
D) $2100 
A) $218 
B) $2500 
C) $1520 
D) $2100

Question 9

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Accepted Answer

A) a positive contribution both to investment and to GDP. 
B) a positive contribution both to consumption and to GDP. 
C) a positive contribution to GDP,but it does not affect investment or consumption. 
D) a positive contribution to investment,but it does not affect GDP. 
A) a positive contribution both to investment and to GDP. 
B) a positive contribution both to consumption and to GDP. 
C) a positive contribution to GDP,but it does not affect investment or consumption. 
D) a positive contribution to investment,but it does not affect GDP.

Question 10

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A) consumption,since the goods will be sold to consumers in another period. 
B) intermediate goods,and so is not included in that year's GDP. 
C) investment,since GDP aims to measure the value of the economy's production that year. 
D) spending on durable goods,since the goods could not be inventoried unless they were durable. 
A) consumption,since the goods will be sold to consumers in another period. 
B) intermediate goods,and so is not included in that year's GDP. 
C) investment,since GDP aims to measure the value of the economy's production that year. 
D) spending on durable goods,since the goods could not be inventoried unless they were durable.

Question 11

In the United States in 2015,purchases of capital equipment,inventories,and structures represented approximately

Accepted Answer

A) 3 percent of GDP. 
B) 7 percent of GDP. 
C) 15 percent of GDP. 
D) 17 percent of GDP. 
A) 3 percent of GDP. 
B) 7 percent of GDP. 
C) 15 percent of GDP. 
D) 17 percent of GDP.

Question 12

In the United States in 2015,consumption represented slightly less than

Accepted Answer

A) 60 percent of GDP. 
B) 70 percent of GDP. 
C) 80 percent of GDP. 
D) 90 percent of GDP. 
A) 60 percent of GDP. 
B) 70 percent of GDP. 
C) 80 percent of GDP. 
D) 90 percent of GDP.

Question 13

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,

Accepted Answer

A) U.S.investment,GDP,and GNP all increase by the same amount. 
B) U.S.investment increases,but GDP and GNP are unaffected by the purchase. 
C) U.S.investment and GDP increase by the same amount,but U.S.GNP increases by a smaller amount. 
D) U.S.investment and GNP increase by the same amount,but U.S.GDP increases by a smaller amount. 
A) U.S.investment,GDP,and GNP all increase by the same amount. 
B) U.S.investment increases,but GDP and GNP are unaffected by the purchase. 
C) U.S.investment and GDP increase by the same amount,but U.S.GNP increases by a smaller amount. 
D) U.S.investment and GNP increase by the same amount,but U.S.GDP increases by a smaller amount.

Question 14

In the economy of Talikastan in 2015,consumption was $5300,GDP was $8800,government purchases were $1800,imports were $600,and investment was $2000.What were Talikastan's exports in 2015?

Accepted Answer

A) -$900 
B) -$600 
C) $200 
D) $300 
A) -$900 
B) -$600 
C) $200 
D) $300

Question 15

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

Accepted Answer

A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP. 
A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP.

Question 16

In the economy of Talikastan in 2015,consumption was $600,exports were $300,GDP was $1300,government purchases were $250,and investment was $300.What were Talikastan's imports in 2015?

Accepted Answer

A) -$150 
B) -$200 
C) $200 
D) $150 
A) -$150 
B) -$200 
C) $200 
D) $150

Question 17

A U.S.grocery chain purchases olive oil from Tunisia and sells it to U.S.consumers.In which of the following is this transaction included?

Accepted Answer

A) U.S.consumption and U.S.imports 
B) U.S.consumption but not U.S.imports 
C) U.S.imports but not U.S.consumption 
D) neither U.S.consumption nor U.S.imports 
A) U.S.consumption and U.S.imports 
B) U.S.consumption but not U.S.imports 
C) U.S.imports but not U.S.consumption 
D) neither U.S.consumption nor U.S.imports

Question 18

The city of Ann Arbor Michigan buys a police car manufactured in Germany.In the GDP accounts this transaction is included in

Accepted Answer

A) in government expenditures and exports. 
B) government expenditures and imports. 
C) exports,but not government expenditures. 
D) imports,but not government expenditures. 
A) in government expenditures and exports. 
B) government expenditures and imports. 
C) exports,but not government expenditures. 
D) imports,but not government expenditures.

Question 19

The consumption component of GDP includes spending on

Accepted Answer

A) durable goods and nondurable goods,but not spending on services. 
B) durable goods and services,but not spending on nondurable goods. 
C) nondurable goods and services,but not spending on durable goods. 
D) durable goods,nondurable goods,and services. 
A) durable goods and nondurable goods,but not spending on services. 
B) durable goods and services,but not spending on nondurable goods. 
C) nondurable goods and services,but not spending on durable goods. 
D) durable goods,nondurable goods,and services.

Question 20

If net exports is a negative number for a particular year,then

Accepted Answer

A) the value of firms' inventories declined over the course of the year. 
B) consumption exceeded the sum of investment and government purchases during the year. 
C) the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D) the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year. 
A) the value of firms' inventories declined over the course of the year. 
B) consumption exceeded the sum of investment and government purchases during the year. 
C) the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D) the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

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

Net exports equal

Which of the following is not an example of a durable good?

A German citizen buys an automobile produced in the United States by a Japanese company.As a result,

To encourage formation of small businesses,the government could provide subsidies;these subsidies

In 2015,GDP per person in the United States was almost

In the economy of Talikastan in 2015,consumption was two-thirds of GDP,government purchases were $1000 more than investment,investment was one-ninth of GDP,and the value of exports exceeded the value of imports by $500.What was Talikastan's GDP in 2015?

In the economy of Talikastan in 2015,consumption was 75% of GDP,government purchases were $200,imports were $50 and 125% of the value of exports,investment was one-sixth of the value of consumption.What was Talikastan's GDP in 2015?

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

The value of goods added to a firm's inventory in a certain year is treated as

In the United States in 2015,purchases of capital equipment,inventories,and structures represented approximately

In the United States in 2015,consumption represented slightly less than

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,

In the economy of Talikastan in 2015,consumption was $5300,GDP was $8800,government purchases were $1800,imports were $600,and investment was $2000.What were Talikastan's exports in 2015?

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

In the economy of Talikastan in 2015,consumption was $600,exports were $300,GDP was $1300,government purchases were $250,and investment was $300.What were Talikastan's imports in 2015?

A U.S.grocery chain purchases olive oil from Tunisia and sells it to U.S.consumers.In which of the following is this transaction included?

The city of Ann Arbor Michigan buys a police car manufactured in Germany.In the GDP accounts this transaction is included in

The consumption component of GDP includes spending on

If net exports is a negative number for a particular year,then

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

Application International Trade: Part A