Question 1

-According to the above table, Gross Domestic Product as calculated by the income approach is

Accepted Answer

A)  $10,121 billion. 
B)  $10,646 billion. 
C)  $14,925 billion. 
D)  $15,619 billion. 
A)  $10,121 billion. 
B)  $10,646 billion. 
C)  $14,925 billion. 
D)  $15,619 billion.

Question 2

Purchasing power parity refers to

Accepted Answer

A)  adjustments in GDP figures to put everything into one common currency for comparison sake. 
B)  adjustments in exchange rate conversions that take into account differences in inflation rates across countries. 
C)  adjustments in exchange rate conversions that take into account the differences in true cost of living across countries. 
D)  calculating real, per capita GDP in dollars. 
A)  adjustments in GDP figures to put everything into one common currency for comparison sake. 
B)  adjustments in exchange rate conversions that take into account differences in inflation rates across countries. 
C)  adjustments in exchange rate conversions that take into account the differences in true cost of living across countries. 
D)  calculating real, per capita GDP in dollars.

Question 3

To calculate GDP once national income has been computed, we must

Accepted Answer

A)  add indirect business taxes and transfers and subtract profits. 
B)  add depreciation and subtract indirect business taxes. 
C)  add depreciation and indirect business taxes and transfer payments and subtract other business income adjustments and net U.S. income earned abroad. 
D)  add indirect business taxes and transfers and subtract depreciation, other business income adjustments, and net U.S. income earned abroad. 
A)  add indirect business taxes and transfers and subtract profits. 
B)  add depreciation and subtract indirect business taxes. 
C)  add depreciation and indirect business taxes and transfer payments and subtract other business income adjustments and net U.S. income earned abroad. 
D)  add indirect business taxes and transfers and subtract depreciation, other business income adjustments, and net U.S. income earned abroad.

Question 4

Households receive their income in the circular flow diagram by

Accepted Answer

A)  selling the use of their property. 
B)  selling the goods they produce at home. 
C)  obtaining dividends and interest payments. 
D)  selling resources they own to business firms. 
A)  selling the use of their property. 
B)  selling the goods they produce at home. 
C)  obtaining dividends and interest payments. 
D)  selling resources they own to business firms.

Question 5

The components of GDP using the expenditure method are

Accepted Answer

A)  consumption expenditures, investment expenditures, and government expenditures. 
B)  consumption expenditures, investment expenditures, government expenditures, and net exports. 
C)  wages and interest. 
D)  wages, interest, rents, and profits. 
A)  consumption expenditures, investment expenditures, and government expenditures. 
B)  consumption expenditures, investment expenditures, government expenditures, and net exports. 
C)  wages and interest. 
D)  wages, interest, rents, and profits.

Question 6

Calculating Gross Domestic Product (GDP) by the income approach would require including

Accepted Answer

A)  all transfer payments by the government. 
B)  all wages paid. 
C)  all restaurant sales. 
D)  the market value of all final goods and any profits. 
A)  all transfer payments by the government. 
B)  all wages paid. 
C)  all restaurant sales. 
D)  the market value of all final goods and any profits.

Question 7

Goods and services are sold

Accepted Answer

A)  in the product markets. 
B)  in the factor markets. 
C)  by households. 
D)  only as intermediate goods. 
A)  in the product markets. 
B)  in the factor markets. 
C)  by households. 
D)  only as intermediate goods.

Question 8

Net exports is equal to

Accepted Answer

A)  total exports minus total imports. 
B)  total imports minus total exports. 
C)  total exports adjusted for price changes. 
D)  total exports minus transfer payments. 
A)  total exports minus total imports. 
B)  total imports minus total exports. 
C)  total exports adjusted for price changes. 
D)  total exports minus transfer payments.

Question 9

The difference between personal income and disposable personal income is that

Accepted Answer

A)  disposable personal income includes only the funds available to spend on non-necessities. 
B)  personal income taxes are not included in disposable personal income. 
C)  personal income includes personal income taxes and indirect business taxes, which are not included in disposable personal income. 
D)  personal income does not include transfer payments, such as Social Security payments or welfare payments and disposable personal income includes them. 
A)  disposable personal income includes only the funds available to spend on non-necessities. 
B)  personal income taxes are not included in disposable personal income. 
C)  personal income includes personal income taxes and indirect business taxes, which are not included in disposable personal income. 
D)  personal income does not include transfer payments, such as Social Security payments or welfare payments and disposable personal income includes them.

Question 10

-According to the above table, Gross Domestic Product as calculated by the expenditure approach is

Accepted Answer

A)  $14,337 billion. 
B)  $13,617 billion. 
C)  $13,384 billion. 
D)  $13,278 billion. 
A)  $14,337 billion. 
B)  $13,617 billion. 
C)  $13,384 billion. 
D)  $13,278 billion.

Question 11

In the product market

Accepted Answer

A)  businesses trade goods and services for resources. 
B)  consumers trade resources for goods and services. 
C)  consumers trade goods and services for resources. 
D)  consumers trade monetary payments for goods and services. 
A)  businesses trade goods and services for resources. 
B)  consumers trade resources for goods and services. 
C)  consumers trade goods and services for resources. 
D)  consumers trade monetary payments for goods and services.

Question 12

-Refer to the above table (figures in billions). Real GDP for year 2017 was

Accepted Answer

A)  $4819.6 billion. 
B)  $5222.2 billion. 
C)  $4617.3 billion. 
D)  uncertain without more information. 
A)  $4819.6 billion. 
B)  $5222.2 billion. 
C)  $4617.3 billion. 
D)  uncertain without more information.

Question 13

How do GDP and NDP differ? What does it mean if net investment is negative?

Accepted Answer

Net domestic product equals GDP minus de

Question 14

When dealing with anything that is measured as a flow, one must

Accepted Answer

A)  use dollar values. 
B)  make sure the thing can be measured accurately. 
C)  specify a time period. 
D)  specify one day in time. 
A)  use dollar values. 
B)  make sure the thing can be measured accurately. 
C)  specify a time period. 
D)  specify one day in time.

Question 15

Suppose you know that a certain country with a growing population has experienced steady growth in real per capita GDP. What do you then also know to be TRUE?

Accepted Answer

A)  The distribution of income in this country has become relatively more equal. 
B)  The growth in goods and services produced and exchanged in the marketplace has outpaced the growth in population. 
C)  This country exports more than it imports. 
D)  This country imports more than it exports. 
A)  The distribution of income in this country has become relatively more equal. 
B)  The growth in goods and services produced and exchanged in the marketplace has outpaced the growth in population. 
C)  This country exports more than it imports. 
D)  This country imports more than it exports.

Question 16

National income is income ________ the factors of production.

Accepted Answer

A)  paid by 
B)  earned by 
C)  invested in 
D)  households owe to 
A)  paid by 
B)  earned by 
C)  invested in 
D)  households owe to

Question 17

-Using the above table, the National Income (NI) for the country is

Accepted Answer

A)  338. 
B)  228. 
C)  318. 
D)  662. 
A)  338. 
B)  228. 
C)  318. 
D)  662.

Question 18

Profits are part of the

Accepted Answer

A)  total income. 
B)  monetary value of output. 
C)  final consumer goods. 
D)  factor services. 
A)  total income. 
B)  monetary value of output. 
C)  final consumer goods. 
D)  factor services.

Question 19

Which of the following is consistent with the circular flow of income? 
I. Goods and services flow in one direction.
II. Payments and incomes flow in one direction.
III. Sellers receive less than what buyers spend.

Accepted Answer

A)  I only 
B)  II only 
C)  III only 
D)  Both I and II 
A)  I only 
B)  II only 
C)  III only 
D)  Both I and II

Question 20

When the total quantity of unsold new Ford Fusion vehicles increases from 40,000 to 47,000

Accepted Answer

A)  the economy experiences an increase in inventory investment. 
B)  the economy's level of consumption has increased. 
C)  there is a decrease in aggregate output. 
D)  the economy experiences a decrease in investment. 
A)  the economy experiences an increase in inventory investment. 
B)  the economy's level of consumption has increased. 
C)  there is a decrease in aggregate output. 
D)  the economy experiences a decrease in investment.

Exam 8: Measuring the Economys Performance

-According to the above table, Gross Domestic Product as calculated by the income approach is

Purchasing power parity refers to

To calculate GDP once national income has been computed, we must

Households receive their income in the circular flow diagram by

The components of GDP using the expenditure method are

Calculating Gross Domestic Product (GDP) by the income approach would require including

Goods and services are sold

Net exports is equal to

The difference between personal income and disposable personal income is that

-According to the above table, Gross Domestic Product as calculated by the expenditure approach is

In the product market

-Refer to the above table (figures in billions). Real GDP for year 2017 was

How do GDP and NDP differ? What does it mean if net investment is negative?

When dealing with anything that is measured as a flow, one must

Suppose you know that a certain country with a growing population has experienced steady growth in real per capita GDP. What do you then also know to be TRUE?

National income is income ________ the factors of production.

-Using the above table, the National Income (NI) for the country is

Profits are part of the

Which of the following is consistent with the circular flow of income? I. Goods and services flow in one direction. II. Payments and incomes flow in one direction. III. Sellers receive less than what buyers spend.

When the total quantity of unsold new Ford Fusion vehicles increases from 40,000 to 47,000

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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