Question 1

Government purchases, under the expenditure approach to GDP accounting, do not include:

Accepted Answer

A) ​state government purchases of plumbing services. 
B) ​Social Security benefit payments to retirees. 
C) ​the salaries of military officers. 
D) ​federal government purchases of computers. 
A) ​state government purchases of plumbing services. 
B) ​Social Security benefit payments to retirees. 
C) ​the salaries of military officers. 
D) ​federal government purchases of computers. B

Question 2

Real GDP is:

Accepted Answer

A) ​the base year market value of all final goods and services produced domestically during a given period. 
B) ​the current year market value of all final goods and services produced domestically during a given period. 
C) ​usually greater than nominal GDP. 
D) ​the current year market value of domestic production of intermediate goods. 
A) ​the base year market value of all final goods and services produced domestically during a given period. 
B) ​the current year market value of all final goods and services produced domestically during a given period. 
C) ​usually greater than nominal GDP. 
D) ​the current year market value of domestic production of intermediate goods. A

Question 3

Net exports are a ____ proportion of GDP and have recently been ____ for the United States.

Accepted Answer

A) ​small; positive. 
B) ​small; negative. 
C) ​large; positive 
D) ​large; negative. 
A) ​small; positive. 
B) ​small; negative. 
C) ​large; positive 
D) ​large; negative. B

Question 4

Which of the following factors that affect our well-being does GDP fail to adequately account for?

Accepted Answer

A) ​changes in the quality of goods 
B) ​externalities 
C) leisure 
D) ​all of the above 
A) ​changes in the quality of goods 
B) ​externalities 
C) leisure 
D) ​all of the above

Question 5

Which of the following is included in the investment category under the expenditure approach to GDP accounting?

Accepted Answer

A) ​stocks 
B) bonds 
C) ​durable goods 
D) ​additions to business inventories 
A) ​stocks 
B) bonds 
C) ​durable goods 
D) ​additions to business inventories

Question 6

Net exports are defined as:

Accepted Answer

A) ​exports plus imports. 
B) ​exports minus imports. 
C) ​imports minus exports. 
D) ​exports plus imports minus tariffs. 
A) ​exports plus imports. 
B) ​exports minus imports. 
C) ​imports minus exports. 
D) ​exports plus imports minus tariffs.

Question 7

The dollar value of stocks and bonds traded in a given year:

Accepted Answer

A) ​is included in the calculation of GDP. 
B) ​have no influence on GDP. 
C) ​is included in the calculation of private investment. 
D) ​is not included in GDP, but the broker commissions involved are included in GDP. 
A) ​is included in the calculation of GDP. 
B) ​have no influence on GDP. 
C) ​is included in the calculation of private investment. 
D) ​is not included in GDP, but the broker commissions involved are included in GDP.

Question 8

The total dollar value of purchases in the economy is far larger than GDP primarily because:

Accepted Answer

A) ​GDP ignores taxes. 
B) ​GDP excludes the value of intermediate goods exchanged. 
C) ​GDP excludes the output from foreigners working in America. 
D) ​GDP ignores production in the home 
A) ​GDP ignores taxes. 
B) ​GDP excludes the value of intermediate goods exchanged. 
C) ​GDP excludes the output from foreigners working in America. 
D) ​GDP ignores production in the home

Question 9

In the national income accounts, investment includes:

Accepted Answer

A) ​expenditures on durable consumer goods. 
B) ​government construction of a new dam. 
C) ​additions to business inventories. 
D) ​purchases of used machinery by businesses. 
A) ​expenditures on durable consumer goods. 
B) ​government construction of a new dam. 
C) ​additions to business inventories. 
D) ​purchases of used machinery by businesses.

Question 10

Which of the following is a problem with using real GDP as a measure of economic well-being?

Accepted Answer

A) ​It does not account for inflation. 
B) ​It does not account for production within the household. 
C) ​It does not account for production by foreign firms producing inside the U.S. 
D) ​all of the above 
A) ​It does not account for inflation. 
B) ​It does not account for production within the household. 
C) ​It does not account for production by foreign firms producing inside the U.S. 
D) ​all of the above

Question 11

Which of the following would not be counted as a final good for inclusion in GDP?

Accepted Answer

A) ​a piece of glass bought by a consumer to fix a broken window 
B) ​a sheet of glass purchased by General Motors for the side window of a new car 
C) ​a sheet of glass produced this year and ending up in the inventory of a retail hardware store 
D) ​All of the above are counted. 
A) ​a piece of glass bought by a consumer to fix a broken window 
B) ​a sheet of glass purchased by General Motors for the side window of a new car 
C) ​a sheet of glass produced this year and ending up in the inventory of a retail hardware store 
D) ​All of the above are counted.

Question 12

If real GDP increased by 2% and nominal GDP increased by 1%, then output:

Accepted Answer

A) ​increased and the price level increased. 
B) ​increased and the price level decreased. 
C) ​decreased and the price level increased. 
D) ​decreased and the price level decreased. 
A) ​increased and the price level increased. 
B) ​increased and the price level decreased. 
C) ​decreased and the price level increased. 
D) ​decreased and the price level decreased.

Question 13

A price index can fall from one year to the next:

Accepted Answer

A) ​even when nominal GDP falls. 
B) ​even when real GDP falls. 
C) ​even when some individual good's prices rise. 
D) ​in any of the above circumstances. 
A) ​even when nominal GDP falls. 
B) ​even when real GDP falls. 
C) ​even when some individual good's prices rise. 
D) ​in any of the above circumstances.

Question 14

Declines in business inventories enter national income accounts:

Accepted Answer

A) ​negatively in the consumption category. 
B) ​negatively in the investment category. 
C) ​negatively in the net export category. 
D) ​positively in the profits category. 
A) ​negatively in the consumption category. 
B) ​negatively in the investment category. 
C) ​negatively in the net export category. 
D) ​positively in the profits category.

Question 15

Which of the following is not part of GDP?

Accepted Answer

A) ​the value of a new home built and purchased during the year 
B) ​the value of shares of Microsoft stock bought and sold during the year 
C) ​the value of long distance telephone services rendered during the year 
D) ​the value of new furniture produced during the year 
A) ​the value of a new home built and purchased during the year 
B) ​the value of shares of Microsoft stock bought and sold during the year 
C) ​the value of long distance telephone services rendered during the year 
D) ​the value of new furniture produced during the year

Question 16

Which is greater, gross domestic product or national income? By how much?

Accepted Answer

A) ​Gross domestic product  National income; net exports and indirect business taxes 
D) ​Gross domestic product > National income; indirect business taxes, depreciation, and income earned by foreigners in the United States 
A) ​Gross domestic product  National income; net exports and indirect business taxes 
D) ​Gross domestic product > National income; indirect business taxes, depreciation, and income earned by foreigners in the United States

Question 17

What is the measure of the income received by owners of resources used in making final goods and services?

Accepted Answer

A) ​factor payments 
B) ​product payments 
C) ​indirect earnings 
D) ​direct earnings 
A) ​factor payments 
B) ​product payments 
C) ​indirect earnings 
D) ​direct earnings

Question 18

Using the expenditure approach to GDP accounting, which of the following are included in the investment category?

Accepted Answer

A) ​the purchase of government bonds 
B) ​the purchase of corporate bonds 
C) ​the purchase of corporate stocks 
D) ​none of the above 
A) ​the purchase of government bonds 
B) ​the purchase of corporate bonds 
C) ​the purchase of corporate stocks 
D) ​none of the above

Question 19

Inflation that causes an increase in the prices of goods and services will, other things being equal, tend to decrease nominal GDP.

Accepted Answer

A) True 
 B)False

Question 20

If nominal GDP rises:

Accepted Answer

A) ​we can be sure the price level has risen. 
B) ​real GDP may rise or fall. 
C) ​real GDP must rise. 
D) ​real GDP must fall. 
A) ​we can be sure the price level has risen. 
B) ​real GDP may rise or fall. 
C) ​real GDP must rise. 
D) ​real GDP must fall.

Exam 11: The Firm: Production and Costs

Government purchases, under the expenditure approach to GDP accounting, do not include:

Real GDP is:

Net exports are a ____ proportion of GDP and have recently been ____ for the United States.

Which of the following factors that affect our well-being does GDP fail to adequately account for?

Which of the following is included in the investment category under the expenditure approach to GDP accounting?

Net exports are defined as:

The dollar value of stocks and bonds traded in a given year:

The total dollar value of purchases in the economy is far larger than GDP primarily because:

In the national income accounts, investment includes:

Which of the following is a problem with using real GDP as a measure of economic well-being?

Which of the following would not be counted as a final good for inclusion in GDP?

If real GDP increased by 2% and nominal GDP increased by 1%, then output:

A price index can fall from one year to the next:

Declines in business inventories enter national income accounts:

Which of the following is not part of GDP?

Which is greater, gross domestic product or national income? By how much?

What is the measure of the income received by owners of resources used in making final goods and services?

Using the expenditure approach to GDP accounting, which of the following are included in the investment category?

Inflation that causes an increase in the prices of goods and services will, other things being equal, tend to decrease nominal GDP.

If nominal GDP rises:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Net exports are a proportion of GDP and have recently been for the United States.