Question 1

Imported goods purchased in the United States are counted as part of U.S.GDP.

Accepted Answer

A) True 
 B)False

Question 2

Net exports will be negative if exports exceed imports.

Accepted Answer

A) True 
 B)False

Question 3

A sound system produced by a supplier to Ford Motor Company is an example of:

Accepted Answer

A)  an inferior good. 
B)  a final good. 
C)  a public good. 
D)  an intermediate good. 
A)  an inferior good. 
B)  a final good. 
C)  a public good. 
D)  an intermediate good.

Question 4

If pressed to choose a single indicator of current economic performance,most economists would probably choose real GDP growth.

Accepted Answer

A) True 
 B)False

Question 5

National wealth refers to the value of a nation's entire stock of:

Accepted Answer

A)  assets. 
B)  savings. 
C)  gold. 
D)  currency. 
A)  assets. 
B)  savings. 
C)  gold. 
D)  currency.

Question 6

GDP is calculated by:

Accepted Answer

A)  adding the quantities of all goods and services in an economy. 
B)  adding the prices of all goods and services in an economy. 
C)  dividing the quantity of all goods and services by their prices and adding together the results. 
D)  multiplying the quantity of all goods and services by their prices and adding together the results. 
A)  adding the quantities of all goods and services in an economy. 
B)  adding the prices of all goods and services in an economy. 
C)  dividing the quantity of all goods and services by their prices and adding together the results. 
D)  multiplying the quantity of all goods and services by their prices and adding together the results.

Question 7

Imagine a nation that has automobile factories that emit pollution,grows (illegal)marijuana,and does not allow its women to work outside the home.Which activities will be counted in GDP?

Accepted Answer

A)  the sale of automobiles and marijuana 
B)  the sale of automobiles,marijuana,and the value of the women's work 
C)  the sale of automobiles minus the damage from pollution 
D)  the sale of the automobiles 
A)  the sale of automobiles and marijuana 
B)  the sale of automobiles,marijuana,and the value of the women's work 
C)  the sale of automobiles minus the damage from pollution 
D)  the sale of the automobiles

Question 8

The value of volunteer services is:

Accepted Answer

A)  included in GDP,but should not be because nothing tangible is produced. 
B)  not included in GDP,but should be because a service is produced. 
C)  included in GDP and should be because a service is produced. 
D)  not included in GDP and should not be because nothing tangible is produced. 
A)  included in GDP,but should not be because nothing tangible is produced. 
B)  not included in GDP,but should be because a service is produced. 
C)  included in GDP and should be because a service is produced. 
D)  not included in GDP and should not be because nothing tangible is produced.

Question 9

China has a larger economy than the United Kingdom (Great Britain),but the British are still better off in terms of living standards.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would most likely NOT be counted in GDP?

Accepted Answer

A)  The legal sale of marijuana for medical purposes in the State of California. 
B)  You build a shed in your back yard to store your lawn mower. 
C)  An outside company is hired to clean up a chemical spill at a local factory. 
D)  The fee you pay to snorkel with manatees while on vacation in Florida. 
A)  The legal sale of marijuana for medical purposes in the State of California. 
B)  You build a shed in your back yard to store your lawn mower. 
C)  An outside company is hired to clean up a chemical spill at a local factory. 
D)  The fee you pay to snorkel with manatees while on vacation in Florida.

Question 11

GDP measures the total income in a country.

Accepted Answer

A) True 
 B)False

Question 12

Based on the level of GDP,India is one of the five largest economies in the world.

Accepted Answer

A) True 
 B)False

Question 13

Akemi,who is a Japanese citizen,works in the United States as a computer programmer.The value of her output is included in:

Accepted Answer

A)  both U.S.and Japan's GDP. 
B)  both U.S.and Japan's GNP. 
C)  U.S.GDP and Japan's GNP. 
D)  U.S.GNP and Japan's GDP. 
A)  both U.S.and Japan's GDP. 
B)  both U.S.and Japan's GNP. 
C)  U.S.GDP and Japan's GNP. 
D)  U.S.GNP and Japan's GDP.

Question 14

The value of production by a U.S.worker employed by a firm located in Canada is included in:

Accepted Answer

A)  both Canada's GDP and Canada's GNP. 
B)  both U.S.GDP and U.S.GNP. 
C)  Canada's GDP and U.S.GNP. 
D)  U.S.GDP and Canada's GNP. 
A)  both Canada's GDP and Canada's GNP. 
B)  both U.S.GDP and U.S.GNP. 
C)  Canada's GDP and U.S.GNP. 
D)  U.S.GDP and Canada's GNP.

Question 15

A set of tires installed on a vehicle in an automobile factory is counted as:

Accepted Answer

A)  a final good and its market price is part of GDP. 
B)  a final good and its market price is not part of GDP. 
C)  an intermediate good and its market price is part of GDP. 
D)  an intermediate good and its market price is not part of GDP. 
A)  a final good and its market price is part of GDP. 
B)  a final good and its market price is not part of GDP. 
C)  an intermediate good and its market price is part of GDP. 
D)  an intermediate good and its market price is not part of GDP.

Question 16

The GDP deflator is the ratio of real to nominal GDP (multiplied by 100).

Accepted Answer

A) True 
 B)False

Question 17

Spending on goods imported into the U.S.is included in GDP for:

Accepted Answer

A)  the United States. 
B)  the country that produced the goods. 
C)  both the United States and the country that produced the goods. 
D)  no country. 
A)  the United States. 
B)  the country that produced the goods. 
C)  both the United States and the country that produced the goods. 
D)  no country.

Question 18

What is the term for the value of a nation's entire stock of assets?

Accepted Answer

A)  gross domestic product 
B)  gross national product 
C)  national wealth 
D)  real gross domestic product 
A)  gross domestic product 
B)  gross national product 
C)  national wealth 
D)  real gross domestic product

Question 19

When GDP per capita goes up by 10 percent:

Accepted Answer

A)  everyone's income goes up by 10 percent. 
B)  only the most wealthy peoples' incomes will go up by 10 percent. 
C)  no one's income goes up by 10 percent. 
D)  the distribution of the increase in income may vary. 
A)  everyone's income goes up by 10 percent. 
B)  only the most wealthy peoples' incomes will go up by 10 percent. 
C)  no one's income goes up by 10 percent. 
D)  the distribution of the increase in income may vary.

Question 20

Currently,India's growth rate is low compared to that of most countries.

Accepted Answer

A) True 
 B)False

Exam 6: GDP and the Measurement of Progress

Imported goods purchased in the United States are counted as part of U.S.GDP.

Net exports will be negative if exports exceed imports.

A sound system produced by a supplier to Ford Motor Company is an example of:

If pressed to choose a single indicator of current economic performance,most economists would probably choose real GDP growth.

National wealth refers to the value of a nation's entire stock of:

GDP is calculated by:

Imagine a nation that has automobile factories that emit pollution,grows (illegal)marijuana,and does not allow its women to work outside the home.Which activities will be counted in GDP?

The value of volunteer services is:

China has a larger economy than the United Kingdom (Great Britain),but the British are still better off in terms of living standards.

Which of the following would most likely NOT be counted in GDP?

GDP measures the total income in a country.

Based on the level of GDP,India is one of the five largest economies in the world.

Akemi,who is a Japanese citizen,works in the United States as a computer programmer.The value of her output is included in:

The value of production by a U.S.worker employed by a firm located in Canada is included in:

A set of tires installed on a vehicle in an automobile factory is counted as:

The GDP deflator is the ratio of real to nominal GDP (multiplied by 100).

Spending on goods imported into the U.S.is included in GDP for:

What is the term for the value of a nation's entire stock of assets?

When GDP per capita goes up by 10 percent:

Currently,India's growth rate is low compared to that of most countries.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

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