Question 1

Explain the two main methods used to measure GDP.

Accepted Answer

The two methods used to measure GDP are

Question 2

Durable consumer goods are goods that last more than

Accepted Answer

A)  one year. 
B)  three years. 
C)  five years. 
D)  seven years. 
A)  one year. 
B)  three years. 
C)  five years. 
D)  seven years.

Question 3

-Refer to the above table (figures in billions). The nominal GDP for 2018 is

Accepted Answer

A)  $4819.6 billion. 
B)  $4091.3 billion. 
C)  $5677.5 billion. 
D)  uncertain without more information. 
A)  $4819.6 billion. 
B)  $4091.3 billion. 
C)  $5677.5 billion. 
D)  uncertain without more information.

Question 4

Constant dollar Gross Domestic Product (GDP)

Accepted Answer

A)  is the same as nominal Gross Domestic Product (GDP). 
B)  is nominal Gross Domestic Product (GDP) divided by the price index. 
C)  is equal to real GDP multiplied by the overall price level. 
D)  all of the above. 
A)  is the same as nominal Gross Domestic Product (GDP). 
B)  is nominal Gross Domestic Product (GDP) divided by the price index. 
C)  is equal to real GDP multiplied by the overall price level. 
D)  all of the above.

Question 5

Because of a major hurricane, gross domestic product for the first quarter of the calendar year falls by 10 percent. As a result, gross domestic income

Accepted Answer

A)  falls by less than 10 percent. 
B)  also falls by 10 percent because they always have to be equal. 
C)  falls by more than 10 percent because incomes always vary more than GDP. 
D)  would not change since the time span is less than a year. 
A)  falls by less than 10 percent. 
B)  also falls by 10 percent because they always have to be equal. 
C)  falls by more than 10 percent because incomes always vary more than GDP. 
D)  would not change since the time span is less than a year.

Question 6

Which of the following is counted in the GDP in a given year?

Accepted Answer

A)  the sale of Facebook stock 
B)  the sale of a used Mazda convertible 
C)  the dollar value of the housework done by a stay-at-home mom 
D)  the sale of a new screwdriver 
A)  the sale of Facebook stock 
B)  the sale of a used Mazda convertible 
C)  the dollar value of the housework done by a stay-at-home mom 
D)  the sale of a new screwdriver

Question 7

GDP does NOT measure the well-being of a nation's residents because it

Accepted Answer

A)  excludes the sale of secondhand goods. 
B)  excludes the value of intermediate goods. 
C)  includes the value of final goods and services produced in the economy. 
D)  excludes nonmarket transactions. 
A)  excludes the sale of secondhand goods. 
B)  excludes the value of intermediate goods. 
C)  includes the value of final goods and services produced in the economy. 
D)  excludes nonmarket transactions.

Question 8

The most accurate way to compare standards of living throughout the world is to look at

Accepted Answer

A)  total Gross Domestic Product (GDP). 
B)  GNP. 
C)  purchasing power parity. 
D)  foreign exchange rates. 
A)  total Gross Domestic Product (GDP). 
B)  GNP. 
C)  purchasing power parity. 
D)  foreign exchange rates.

Question 9

The total value of all final goods and services produced by factors of production located within a nation's borders is

Accepted Answer

A)  GDP. 
B)  NI. 
C)  PI. 
D)  net investment. 
A)  GDP. 
B)  NI. 
C)  PI. 
D)  net investment.

Question 10

Which of the following is a main limitation of GDP?

Accepted Answer

A)  GDP figures are grossly inaccurate due to sampling errors. 
B)  The real definition of what is and is not included in GDP is unclear. 
C)  GDP is not a good measure of a nation's overall welfare. 
D)  GDP includes some products, which by their very nature are bad products, such as military weapons. 
A)  GDP figures are grossly inaccurate due to sampling errors. 
B)  The real definition of what is and is not included in GDP is unclear. 
C)  GDP is not a good measure of a nation's overall welfare. 
D)  GDP includes some products, which by their very nature are bad products, such as military weapons.

Question 11

The two principle methods of measuring Gross Domestic Product are the

Accepted Answer

A)  flow approach and the stock approach. 
B)  expenditures approach and the income approach. 
C)  intermediate approach and the value-added approach. 
D)  domestic approach and the international approach. 
A)  flow approach and the stock approach. 
B)  expenditures approach and the income approach. 
C)  intermediate approach and the value-added approach. 
D)  domestic approach and the international approach.

Question 12

One method of calculating Gross Domestic Product (GDP) is to add together

Accepted Answer

A)  investment, consumption, gross profits, and net exports. 
B)  consumption, investment, government spending, and net exports. 
C)  wages, gross profits, net investment, and net exports. 
D)  consumption, wages, interest, rental income, and exports. 
A)  investment, consumption, gross profits, and net exports. 
B)  consumption, investment, government spending, and net exports. 
C)  wages, gross profits, net investment, and net exports. 
D)  consumption, wages, interest, rental income, and exports.

Question 13

Which of the following is an example of the gross private domestic investment component of Gross Domestic Product (GDP)?

Accepted Answer

A)  You buy a share of Facebook stock. 
B)  Google buys an office desk. 
C)  You put money into your savings account. 
D)  You put money into your checking account. 
A)  You buy a share of Facebook stock. 
B)  Google buys an office desk. 
C)  You put money into your savings account. 
D)  You put money into your checking account.

Question 14

An example of a nondurable good is

Accepted Answer

A)  a turkey purchased at a grocery store. 
B)  a laptop computer. 
C)  the purchase of labor for a business. 
D)  the services of a cleaning person. 
A)  a turkey purchased at a grocery store. 
B)  a laptop computer. 
C)  the purchase of labor for a business. 
D)  the services of a cleaning person.

Question 15

The price-corrected value for Gross Domestic Product is

Accepted Answer

A)  real Gross Domestic Product (GDP). 
B)  net Gross Domestic Product (GDP). 
C)  net national product. 
D)  per capita income. 
A)  real Gross Domestic Product (GDP). 
B)  net Gross Domestic Product (GDP). 
C)  net national product. 
D)  per capita income.

Question 16

The farmer pays 15 cents for wheat seeds. When the wheat is grown and harvested, the farmer sells it to the miller for 30 cents, who makes flour and sells the flour to the baker for 60 cents. The baker makes bread and sells it to the grocer for 90 cents, and the grocer sells it to a family for $1.25. The contribution to GDP is

Accepted Answer

A)  35 cents. 
B)  $1.25. 
C)  $1.95. 
D)  $3.20. 
A)  35 cents. 
B)  $1.25. 
C)  $1.95. 
D)  $3.20.

Exam 8: Measuring the Economys Performance

Explain the two main methods used to measure GDP.

Durable consumer goods are goods that last more than

-Refer to the above table (figures in billions). The nominal GDP for 2018 is

Constant dollar Gross Domestic Product (GDP)

Because of a major hurricane, gross domestic product for the first quarter of the calendar year falls by 10 percent. As a result, gross domestic income

Which of the following is counted in the GDP in a given year?

GDP does NOT measure the well-being of a nation's residents because it

The most accurate way to compare standards of living throughout the world is to look at

The total value of all final goods and services produced by factors of production located within a nation's borders is

Which of the following is a main limitation of GDP?

The two principle methods of measuring Gross Domestic Product are the

One method of calculating Gross Domestic Product (GDP) is to add together

Which of the following is an example of the gross private domestic investment component of Gross Domestic Product (GDP)?

An example of a nondurable good is

The price-corrected value for Gross Domestic Product 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

Filters