Question 1

Social Security payments received by your grandmother

Accepted Answer

A)  are excluded from GDP, but are included in personal income. 
B)  are included in both GDP and personal income. 
C)  are included in GDP, but are excluded from personal income. 
D)  are excluded in both GDP and personal income. 
A)  are excluded from GDP, but are included in personal income. 
B)  are included in both GDP and personal income. 
C)  are included in GDP, but are excluded from personal income. 
D)  are excluded in both GDP and personal income. A

Question 2

Which of the following best describes a nation's Gross Domestic Product?

Accepted Answer

A)  the market value of all goods and services produced in the economy, including intermediate goods 
B)  the total market value of all final goods and services produced in the economy during a year 
C)  the constant dollar value of all goods produced in the economy during a year period 
D)  the market value of all goods and services less depreciation 
A)  the market value of all goods and services produced in the economy, including intermediate goods 
B)  the total market value of all final goods and services produced in the economy during a year 
C)  the constant dollar value of all goods produced in the economy during a year period 
D)  the market value of all goods and services less depreciation B

Question 3

Which of the following accurately represents income earned by all factors of production?

Accepted Answer

A)  national income 
B)  personal income 
C)  disposable personal income 
D)  wages and salaries 
A)  national income 
B)  personal income 
C)  disposable personal income 
D)  wages and salaries A

Question 4

The owner of an oil well in Texas sells 500 barrels of oil to a refinery in Mexico for $10,000. This transaction

Accepted Answer

A)  will increase Gross Domestic Product (GDP) by $10,000. 
B)  has no effect on Gross Domestic Product (GDP) because the refinery is in Mexico. 
C)  decreases Gross Domestic Product (GDP) because oil reserves have fallen by 500 barrels. 
D)  has no effect on Gross Domestic Product (GDP) because this is the sale of an intermediate product. 
A)  will increase Gross Domestic Product (GDP) by $10,000. 
B)  has no effect on Gross Domestic Product (GDP) because the refinery is in Mexico. 
C)  decreases Gross Domestic Product (GDP) because oil reserves have fallen by 500 barrels. 
D)  has no effect on Gross Domestic Product (GDP) because this is the sale of an intermediate product.

Question 5

A durable good

Accepted Answer

A)  has a life span of more than 3 years. 
B)  is used up within 3 years. 
C)  applies only to services. 
D)  is an intangible commodity. 
A)  has a life span of more than 3 years. 
B)  is used up within 3 years. 
C)  applies only to services. 
D)  is an intangible commodity.

Question 6

If Gross Domestic Product (GDP) equals $1 trillion, gross private investment expenditures are $200 billion, exports equal imports, and government spending is $400 billion, then

Accepted Answer

A)  consumption expenditures are $200 billion. 
B)  consumption expenditures are $400 billion. 
C)  spending on consumer durables must be $400 million. 
D)  we cannot determine what expenditures on consumption are without more information. 
A)  consumption expenditures are $200 billion. 
B)  consumption expenditures are $400 billion. 
C)  spending on consumer durables must be $400 million. 
D)  we cannot determine what expenditures on consumption are without more information.

Question 7

The nominal value of Gross Domestic Product (GDP) is expressed in

Accepted Answer

A)  inflation-adjusted prices. 
B)  constant dollars. 
C)  base-year dollars. 
D)  none of the above. 
A)  inflation-adjusted prices. 
B)  constant dollars. 
C)  base-year dollars. 
D)  none of the above.

Question 8

Which of the following transactions would NOT be included in GDP?

Accepted Answer

A)  the purchase of 100 shares of newly issued Microsoft stock 
B)  the purchase of a newly issued government bond 
C)  the purchase of previously issued corporate bond 
D)  all of the above 
A)  the purchase of 100 shares of newly issued Microsoft stock 
B)  the purchase of a newly issued government bond 
C)  the purchase of previously issued corporate bond 
D)  all of the above

Question 9

National income accounting is

Accepted Answer

A)  used by businesses to calculate their profits during a given year. 
B)  a system utilized to measure macroeconomic activity. 
C)  a measure of consumer income. 
D)  used by accountants to calculate the tax obligations of multinational corporations. 
A)  used by businesses to calculate their profits during a given year. 
B)  a system utilized to measure macroeconomic activity. 
C)  a measure of consumer income. 
D)  used by accountants to calculate the tax obligations of multinational corporations.

Question 10

If consumption expenditures are $500 million, spending on gross investment is $100 million, imports are $50 million, exports are $55 million, government spending on goods and services is $400 million, than GDP is

Accepted Answer

A)  $790 million. 
B)  $905 million. 
C)  $1,005 million. 
D)  $1,010 million. 
A)  $790 million. 
B)  $905 million. 
C)  $1,005 million. 
D)  $1,010 million.

Question 11

Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?

Accepted Answer

A)  nominal GDP based on purchasing power parity 
B)  per capita real GDP based on purchasing power parity 
C)  real GDP based on foreign exchange rates 
D)  per capita nominal GDP based on foreign exchange rates 
A)  nominal GDP based on purchasing power parity 
B)  per capita real GDP based on purchasing power parity 
C)  real GDP based on foreign exchange rates 
D)  per capita nominal GDP based on foreign exchange rates

Question 12

Measurement of economic values after adjustments have been made for changes in the average of prices between years in known as

Accepted Answer

A)  the price index. 
B)  a deflator. 
C)  nominal values. 
D)  real values. 
A)  the price index. 
B)  a deflator. 
C)  nominal values. 
D)  real values.

Question 13

Which of the following transactions would be included in Gross Domestic Product (GDP)?

Accepted Answer

A)  the purchase of new tires by a family to replace worn out tires on the family car 
B)  the purchase of a used car 
C)  the purchase of 100 shares of General Motors stock 
D)  the purchase of 2 grams of cocaine 
A)  the purchase of new tires by a family to replace worn out tires on the family car 
B)  the purchase of a used car 
C)  the purchase of 100 shares of General Motors stock 
D)  the purchase of 2 grams of cocaine

Question 14

In the simple circular flow model, the funds received by a carmaker when it sells a car goes to

Accepted Answer

A)  the workers who helped build the car. 
B)  the owners of firms who sold materials to the carmaker, and the rest stays with the firm. 
C)  only the owners of the carmaker. 
D)  the owners of all of the resources used to make the car. 
A)  the workers who helped build the car. 
B)  the owners of firms who sold materials to the carmaker, and the rest stays with the firm. 
C)  only the owners of the carmaker. 
D)  the owners of all of the resources used to make the car.

Question 15

Of the following, which country has the highest annual real GDP per capita according to the International Monetary Fund and World Bank?

Accepted Answer

A)  China 
B)  Italy 
C)  United States 
D)  Brazil 
A)  China 
B)  Italy 
C)  United States 
D)  Brazil

Question 16

-Using the data in the above table, what is the real GDP for year 2018 (in billions of constant dollars)?

Accepted Answer

A)  9,250 
B)  8,500 
C)  7,708 
D)  8,950 
A)  9,250 
B)  8,500 
C)  7,708 
D)  8,950

Question 17

Which of the following is most likely NOT a final good or service?

Accepted Answer

A)  a portable power bank 
B)  bread in a grocery store 
C)  coffee beans in a coffee shop 
D)  a cookie sold in a bakery 
A)  a portable power bank 
B)  bread in a grocery store 
C)  coffee beans in a coffee shop 
D)  a cookie sold in a bakery

Question 18

Using the expenditure approach, GDP is calculated as

Accepted Answer

A)  wages + interest + rent + profits. 
B)  consumption expenditures + wages. 
C)  consumption expenditures + wages + interest. 
D)  consumption expenditures + investment expenditures + government expenditures + net exports. 
A)  wages + interest + rent + profits. 
B)  consumption expenditures + wages. 
C)  consumption expenditures + wages + interest. 
D)  consumption expenditures + investment expenditures + government expenditures + net exports.

Question 19

The GDP deflator is equal to.

Accepted Answer

A)  nominal GDP divided by real GDP. 
B)  nominal GDP multiplied by real GDP. 
C)  nominal GDP minus real GDP. 
D)  nominal GDP plus real GDP. 
A)  nominal GDP divided by real GDP. 
B)  nominal GDP multiplied by real GDP. 
C)  nominal GDP minus real GDP. 
D)  nominal GDP plus real GDP.

Question 20

Disposable personal income is

Accepted Answer

A)  the total of factor payments to owners of resources. 
B)  the dollar value of all final goods and services produced in a country in a year. 
C)  the amount of monetary payments households actually receive before paying personal income taxes. 
D)  the amount of monetary payments households actually receive after paying personal income taxes. 
A)  the total of factor payments to owners of resources. 
B)  the dollar value of all final goods and services produced in a country in a year. 
C)  the amount of monetary payments households actually receive before paying personal income taxes. 
D)  the amount of monetary payments households actually receive after paying personal income taxes.

Exam 8: Measuring the Economys Performance

Social Security payments received by your grandmother

Which of the following best describes a nation's Gross Domestic Product?

Which of the following accurately represents income earned by all factors of production?

The owner of an oil well in Texas sells 500 barrels of oil to a refinery in Mexico for $10,000. This transaction

A durable good

If Gross Domestic Product (GDP) equals $1 trillion, gross private investment expenditures are $200 billion, exports equal imports, and government spending is $400 billion, then

The nominal value of Gross Domestic Product (GDP) is expressed in

Which of the following transactions would NOT be included in GDP?

National income accounting is

If consumption expenditures are $500 million, spending on gross investment is $100 million, imports are $50 million, exports are $55 million, government spending on goods and services is $400 million, than GDP is

Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?

Measurement of economic values after adjustments have been made for changes in the average of prices between years in known as

Which of the following transactions would be included in Gross Domestic Product (GDP)?

In the simple circular flow model, the funds received by a carmaker when it sells a car goes to

Of the following, which country has the highest annual real GDP per capita according to the International Monetary Fund and World Bank?

-Using the data in the above table, what is the real GDP for year 2018 (in billions of constant dollars)?

Which of the following is most likely NOT a final good or service?

Using the expenditure approach, GDP is calculated as

The GDP deflator is equal to.

Disposable personal income is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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