Question 1

How does U.S.gross domestic product (GDP)differ from U.S.gross national product (GNP)?

Accepted Answer

A) GNP = GDP - losses from depreciation 
B) GNP = GDP + income earned by U.S.citizens abroad - income that foreign citizens earned in the U.S. 
C) GNP = GDP + transfer payments to households + - indirect sales taxes 
D) GNP = GDP - depreciation - retained earnings 
A) GNP = GDP - losses from depreciation 
B) GNP = GDP + income earned by U.S.citizens abroad - income that foreign citizens earned in the U.S. 
C) GNP = GDP + transfer payments to households + - indirect sales taxes 
D) GNP = GDP - depreciation - retained earnings

Question 2

In computing GDP,market prices are used in the calculations because

Accepted Answer

A) ​market prices are constant over time. 
B) ​market prices do not reflect how prices change over time. 
C) ​market prices are consistently free of inflation. 
D) ​market prices can be used to combine the variety of goods and services produced in an economy into a single measure. 
A) ​market prices are constant over time. 
B) ​market prices do not reflect how prices change over time. 
C) ​market prices are consistently free of inflation. 
D) ​market prices can be used to combine the variety of goods and services produced in an economy into a single measure.

Question 3

Which of the following transactions would be included in GDP for 2015?

Accepted Answer

A) In February 2015,Amanda sells a 2009 Hyundai to Isabella. 
B) In March 2015,Amanda buys a ticket to visit a zoo in Florida.She visits the zoo in February 2016. 
C) In November 2015,Isabella eats onions that she harvested from her backyard garden in October 2015. 
D) All of the above are correct. 
A) In February 2015,Amanda sells a 2009 Hyundai to Isabella. 
B) In March 2015,Amanda buys a ticket to visit a zoo in Florida.She visits the zoo in February 2016. 
C) In November 2015,Isabella eats onions that she harvested from her backyard garden in October 2015. 
D) All of the above are correct.

Question 4

Tom and Lilly rented a house for $12,000 last year.At the start of the year they bought the house they had been renting directly from the owner for $250,000.They believe they could rent it for $12,000 this year,but stay in the house.How much does Tom and Lilly's decision to buy the house change GDP?

Accepted Answer

A) it reduces GDP by $12,000 
B) it does not change GDP 
C) it raises GDP by $238,000 
D) it raises GDP by $250,000 
A) it reduces GDP by $12,000 
B) it does not change GDP 
C) it raises GDP by $238,000 
D) it raises GDP by $250,000

Question 5

In computing GDP,market prices are used to value final goods and services because

Accepted Answer

A) market prices do not change much over time,so it is easy to make comparisons between years. 
B) market prices reflect the values of goods and services. 
C) market prices reflect the quantity sold. 
D) None of the above is correct;market prices are not used in computing GDP. 
A) market prices do not change much over time,so it is easy to make comparisons between years. 
B) market prices reflect the values of goods and services. 
C) market prices reflect the quantity sold. 
D) None of the above is correct;market prices are not used in computing GDP.

Question 6

An American company operates a fast food restaurant in Paris,France.Which of the following statements is accurate?

Accepted Answer

A) The value of the goods and services produced by the restaurant is included in both French GDP and U.S.GDP. 
B) The value added by American workers and equipment in France is included in U.S.GDP and the value added by French workers and equipment is added to French GDP. 
C) The value of the goods and services produced by the restaurant is included in French GDP,but not in U.S.GDP. 
D) The value of the goods and services produced by the restaurant is included in U.S.GDP,but not in French GDP. 
A) The value of the goods and services produced by the restaurant is included in both French GDP and U.S.GDP. 
B) The value added by American workers and equipment in France is included in U.S.GDP and the value added by French workers and equipment is added to French GDP. 
C) The value of the goods and services produced by the restaurant is included in French GDP,but not in U.S.GDP. 
D) The value of the goods and services produced by the restaurant is included in U.S.GDP,but not in French GDP.

Question 7

Which of the following is not included in U.S.GDP?

Accepted Answer

A) The market value of an oil change that Ben performs on his own car. 
B) The market value of an oil change at Speedy Lube. 
C) The market value of oil purchased by Ben. 
D) Production of foreign citizens living in the United States that work in an oil packaging facility. 
A) The market value of an oil change that Ben performs on his own car. 
B) The market value of an oil change at Speedy Lube. 
C) The market value of oil purchased by Ben. 
D) Production of foreign citizens living in the United States that work in an oil packaging facility.

Question 8

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $48 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Accepted Answer

A) $4 billion. 
B) $12 billion. 
C) $16 billion. 
D) $48 billion. 
A) $4 billion. 
B) $12 billion. 
C) $16 billion. 
D) $48 billion.

Question 9

How is net national product (NNP)calculated?

Accepted Answer

A) Saving is subtracted from the total income of a nation's citizens. 
B) Saving is added to the total income of a nation's citizens 
C) Depreciation losses are subtracted from the total income of a nation's citizens. 
D) Depreciation losses are added to the total income of a nation's citizens. 
A) Saving is subtracted from the total income of a nation's citizens. 
B) Saving is added to the total income of a nation's citizens 
C) Depreciation losses are subtracted from the total income of a nation's citizens. 
D) Depreciation losses are added to the total income of a nation's citizens.

Question 10

A U.S.-owned car factory in Mexico produces $5 million of cars.$2.5 million of these cars are sold in Mexico and the other $2.5 million are sold in the U.S.In both cases $1 million of the value of the cars was due to U.S-owned equipment located in Mexico and U.S.managers working in Mexico.How much did this production contribute to U.S.GDP?

Accepted Answer

A) $0 
B) $1 million 
C) $2 million 
D) None of the above are correct 
A) $0 
B) $1 million 
C) $2 million 
D) None of the above are correct

Question 11

Which of the following correctly orders U.S.income measures from largest to smallest?

Accepted Answer

A) disposable personal income,gross national product,national income,net national product,personal income 
B) personal income,net national product,national income,gross national product,disposable personal income 
C) gross national product,net national product,national income,personal income,disposable personal income 
D) disposable personal income,personal income,national income,net national product,gross national product 
A) disposable personal income,gross national product,national income,net national product,personal income 
B) personal income,net national product,national income,gross national product,disposable personal income 
C) gross national product,net national product,national income,personal income,disposable personal income 
D) disposable personal income,personal income,national income,net national product,gross national product

Question 12

Fine Edge manufactures lawn mowers.In 2014 it had $2 million worth of lawn mowers in inventory.In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory.How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Accepted Answer

A) $11 million 
B) $10 million 
C) $7 million 
D) $9 million 
A) $11 million 
B) $10 million 
C) $7 million 
D) $9 million

Question 13

Tyler and Camille both live in Oklahoma.A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000.Later that year,Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U.S.GDP for the year?

Accepted Answer

A) $18,000 
B) $22,000 
C) $39,000 
D) $57,000 
A) $18,000 
B) $22,000 
C) $39,000 
D) $57,000

Question 14

Which of the following is included in Singapore's GDP?

Accepted Answer

A) The value of production by a Singaporean working in the U.S. 
B) The value of production by an American working in Singapore 
C) The value of production by a Singaporean that crosses the border to work in Malaysia. 
D) All of the above are correct. 
A) The value of production by a Singaporean working in the U.S. 
B) The value of production by an American working in Singapore 
C) The value of production by a Singaporean that crosses the border to work in Malaysia. 
D) All of the above are correct.

Question 15

The income that households and noncorporate businesses receive is called

Accepted Answer

A) personal income. 
B) net national product. 
C) disposable personal income. 
D) national income. 
A) personal income. 
B) net national product. 
C) disposable personal income. 
D) national income.

Question 16

The residents of country A earn $500 million of income from abroad.Residents of other countries earn $200 million in country A.These earnings are accounted for in country A's

Accepted Answer

A) GNP which is larger than GDP in country A. 
B) GNP which is smaller than GDP in country A. 
C) GDP which is larger than GNP in country A. 
D) GDP which is smaller than GNP in country A. 
A) GNP which is larger than GDP in country A. 
B) GNP which is smaller than GDP in country A. 
C) GDP which is larger than GNP in country A. 
D) GDP which is smaller than GNP in country A.

Question 17

Which of the following domestically produced items is not included in GDP?

Accepted Answer

A) a bottle of shampoo 
B) a hairdryer 
C) a haircut 
D) All of the above are included in GDP. 
A) a bottle of shampoo 
B) a hairdryer 
C) a haircut 
D) All of the above are included in GDP.

Question 18

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.Which of the following is correct? The value of changing the oil is

Accepted Answer

A) included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B) included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C) included in GDP if Susan changes it herself,but not if she pays Speedy Lube to change it. 
D) not included in GDP whether Susan pays Speedy lube to change it or she changes it herself. 
A) included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B) included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C) included in GDP if Susan changes it herself,but not if she pays Speedy Lube to change it. 
D) not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Question 19

Which of the following is not included in GDP?

Accepted Answer

A) a can of bug spray 
B) the services of an exterminator 
C) the honey produced and sold by a beekeeper 
D) All of the above are included in GDP. 
A) a can of bug spray 
B) the services of an exterminator 
C) the honey produced and sold by a beekeeper 
D) All of the above are included in GDP.

Question 20

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A) the value of unpaid housework 
B) the value of services provided by major household appliances purchased in a previous period 
C) the estimated rental value of owner-occupied homes 
D) All of the above are included in GDP. 
A) the value of unpaid housework 
B) the value of services provided by major household appliances purchased in a previous period 
C) the estimated rental value of owner-occupied homes 
D) All of the above are included in GDP.

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

How does U.S.gross domestic product (GDP)differ from U.S.gross national product (GNP)?

In computing GDP,market prices are used in the calculations because

Which of the following transactions would be included in GDP for 2015?

In computing GDP,market prices are used to value final goods and services because

An American company operates a fast food restaurant in Paris,France.Which of the following statements is accurate?

Which of the following is not included in U.S.GDP?

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $48 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

How is net national product (NNP)calculated?

Which of the following correctly orders U.S.income measures from largest to smallest?

Fine Edge manufactures lawn mowers.In 2014 it had $2 million worth of lawn mowers in inventory.In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory.How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Tyler and Camille both live in Oklahoma.A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000.Later that year,Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U.S.GDP for the year?

Which of the following is included in Singapore's GDP?

The income that households and noncorporate businesses receive is called

The residents of country A earn $500 million of income from abroad.Residents of other countries earn $200 million in country A.These earnings are accounted for in country A's

Which of the following domestically produced items is not included in GDP?

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.Which of the following is correct? The value of changing the oil is

Which of the following is not included in GDP?

Estimates of the values of which of the following non-market goods or services are included in GDP?

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

Application International Trade: Part B