Question 1

Which of the following is included in measuring GDP?

Accepted Answer

A)  the value added at each stage of production of a final product 
B)  the buying and selling of securities 
C)  the transfer of secondhand goods 
D)  household services rendered by homemakers 
A)  the value added at each stage of production of a final product 
B)  the buying and selling of securities 
C)  the transfer of secondhand goods 
D)  household services rendered by homemakers

Question 2

Suppose Tina purchases an iTune download of her favorite song. This purchase has taken place in the

Accepted Answer

A)  product markets. 
B)  factor markets. 
C)  labor markets. 
D)  resource markets. 
A)  product markets. 
B)  factor markets. 
C)  labor markets. 
D)  resource markets.

Question 3

An increase in net exports

Accepted Answer

A)  causes GDP to increase. 
B)  causes GDP to decrease. 
C)  causes an increase in imports of the same size. 
D)  can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable. 
A)  causes GDP to increase. 
B)  causes GDP to decrease. 
C)  causes an increase in imports of the same size. 
D)  can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable.

Question 4

How is interest measured when used in deriving GDP?

Accepted Answer

Interest is expressed in net t

Question 5

One key difference between national income and net domestic product is

Accepted Answer

A)  net domestic product does not include income earned by the factors of production while national income does. 
B)  net domestic product represents income that is available to individuals while national income does not. 
C)  net domestic product includes indirect business taxes and transfers while national income does not. 
D)  net domestic product only includes the net additions to the economy's stock of capital while national income does not. 
A)  net domestic product does not include income earned by the factors of production while national income does. 
B)  net domestic product represents income that is available to individuals while national income does not. 
C)  net domestic product includes indirect business taxes and transfers while national income does not. 
D)  net domestic product only includes the net additions to the economy's stock of capital while national income does not.

Question 6

GDP is a measure of all of the following EXCEPT

Accepted Answer

A)  the overall level of economic activity. 
B)  the total of production. 
C)  overall welfare. 
D)  the total value of expenditures. 
A)  the overall level of economic activity. 
B)  the total of production. 
C)  overall welfare. 
D)  the total value of expenditures.

Question 7

Changes in the stocks of finished goods and goods in process as well as changes in the raw materials that businesses keep on hand is known as

Accepted Answer

A)  the expenditure approach. 
B)  the income approach. 
C)  fixed investment. 
D)  inventory investment. 
A)  the expenditure approach. 
B)  the income approach. 
C)  fixed investment. 
D)  inventory investment.

Question 8

Inventory investment can be defined as

Accepted Answer

A)  changes in the stocks of finished goods and raw materials. 
B)  the system of accounts that is used to count certain goods. 
C)  goods that must be excluded from the GDP to avoid double counting. 
D)  the value of monetary transactions by businesses. 
A)  changes in the stocks of finished goods and raw materials. 
B)  the system of accounts that is used to count certain goods. 
C)  goods that must be excluded from the GDP to avoid double counting. 
D)  the value of monetary transactions by businesses.

Question 9

The difference between nominal and real values is that real values take into account

Accepted Answer

A)  depreciation. 
B)  changes in the composition of output. 
C)  changes in prices between years. 
D)  the presence of durable goods. 
A)  depreciation. 
B)  changes in the composition of output. 
C)  changes in prices between years. 
D)  the presence of durable goods.

Question 10

Gross Domestic Product (GDP) is

Accepted Answer

A)  the total wholesale value of all final goods and services produced by factors of production owned by citizens of a nation. 
B)  the total market value of all services produced by factors of production located within a nation's borders. 
C)  the total market value of all goods produced within a nation's borders. 
D)  the total market value of all final goods and services produced by factors of production located within a nation's borders. 
A)  the total wholesale value of all final goods and services produced by factors of production owned by citizens of a nation. 
B)  the total market value of all services produced by factors of production located within a nation's borders. 
C)  the total market value of all goods produced within a nation's borders. 
D)  the total market value of all final goods and services produced by factors of production located within a nation's borders.

Question 11

Which of the following is part of gross private domestic investment?

Accepted Answer

A)  purchases of stocks and bonds 
B)  a decline in consumer debt 
C)  purchases of hamburgers for a family dinner 
D)  a positive change in business inventories 
A)  purchases of stocks and bonds 
B)  a decline in consumer debt 
C)  purchases of hamburgers for a family dinner 
D)  a positive change in business inventories

Question 12

Indirect business taxes include all of the following EXCEPT

Accepted Answer

A)  sales taxes. 
B)  taxes on business property. 
C)  taxes on corporate profits. 
D)  taxes on business equipment. 
A)  sales taxes. 
B)  taxes on business property. 
C)  taxes on corporate profits. 
D)  taxes on business equipment.

Question 13

Which one of the following is TRUE?

Accepted Answer

A)  Net investment is negative when gross investment is greater than depreciation. 
B)  Our productive capacity declines when net investment is less than zero. 
C)  Negative net investment occurs when imports are less than exports. 
D)  Negative net investment occurs when exports are less than imports. 
A)  Net investment is negative when gross investment is greater than depreciation. 
B)  Our productive capacity declines when net investment is less than zero. 
C)  Negative net investment occurs when imports are less than exports. 
D)  Negative net investment occurs when exports are less than imports.

Question 14

Disposable personal income is found by taking

Accepted Answer

A)  personal income taxes minus personal income. 
B)  personal income minus personal income taxes. 
C)  personal income taxes plus personal income. 
D)  personal income times personal income taxes. 
A)  personal income taxes minus personal income. 
B)  personal income minus personal income taxes. 
C)  personal income taxes plus personal income. 
D)  personal income times personal income taxes.

Question 15

If you buy stocks and bonds, the dollar value of those stocks and bonds is

Accepted Answer

A)  included in Gross Domestic Product (GDP) under investment. 
B)  included in Gross Domestic Product (GDP) under consumer expenditures. 
C)  not included in calculating Gross Domestic Product (GDP) for they merely represent a transfer of ownership. 
D)  included in Gross Domestic Product (GDP) if the stocks and bonds were issued by business firms but not if they were issued by governments. 
A)  included in Gross Domestic Product (GDP) under investment. 
B)  included in Gross Domestic Product (GDP) under consumer expenditures. 
C)  not included in calculating Gross Domestic Product (GDP) for they merely represent a transfer of ownership. 
D)  included in Gross Domestic Product (GDP) if the stocks and bonds were issued by business firms but not if they were issued by governments.

Question 16

Individuals receive income and pay taxes over the course of a year. The difference between the income they receive and the taxes they pay is referred to as

Accepted Answer

A)  net national income. 
B)  net domestic product. 
C)  per capita real GDP. 
D)  disposable personal income. 
A)  net national income. 
B)  net domestic product. 
C)  per capita real GDP. 
D)  disposable personal income.

Question 17

When one uses the expenditure approach to calculate Gross Domestic Product (GDP), which of the following would be included?

Accepted Answer

A)  government spending at the state level 
B)  household purchases of legal services 
C)  inventory investment 
D)  all of the above 
A)  government spending at the state level 
B)  household purchases of legal services 
C)  inventory investment 
D)  all of the above

Question 18

Measuring total aggregate production in current dollars uses which of the following measures?

Accepted Answer

A)  real personal income 
B)  real gross domestic product 
C)  nominal gross domestic product 
D)  nominal net domestic product 
A)  real personal income 
B)  real gross domestic product 
C)  nominal gross domestic product 
D)  nominal net domestic product

Question 19

In the circular flow, ________ provide the factor services.

Accepted Answer

A)  households 
B)  businesses 
C)  producers 
D)  businesses and households 
A)  households 
B)  businesses 
C)  producers 
D)  businesses and households

Question 20

-Refer to the above figure. Which arrows represent items that are NOT measured in dollar terms?

Accepted Answer

A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C 
A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C

Exam 8: Measuring the Economys Performance

Which of the following is included in measuring GDP?

Suppose Tina purchases an iTune download of her favorite song. This purchase has taken place in the

An increase in net exports

How is interest measured when used in deriving GDP?

One key difference between national income and net domestic product is

GDP is a measure of all of the following EXCEPT

Changes in the stocks of finished goods and goods in process as well as changes in the raw materials that businesses keep on hand is known as

Inventory investment can be defined as

The difference between nominal and real values is that real values take into account

Gross Domestic Product (GDP) is

Which of the following is part of gross private domestic investment?

Indirect business taxes include all of the following EXCEPT

Which one of the following is TRUE?

Disposable personal income is found by taking

If you buy stocks and bonds, the dollar value of those stocks and bonds is

Individuals receive income and pay taxes over the course of a year. The difference between the income they receive and the taxes they pay is referred to as

When one uses the expenditure approach to calculate Gross Domestic Product (GDP), which of the following would be included?

Measuring total aggregate production in current dollars uses which of the following measures?

In the circular flow, ________ provide the factor services.

-Refer to the above figure. Which arrows represent items that are NOT measured in dollar terms?

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

Filters