Question 1

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

Accepted Answer

A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion. 
A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion.

Question 2

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

Accepted Answer

A)  a positive contribution both to investment and to GDP. 
B)  a positive contribution both to consumption and to GDP. 
C)  a positive contribution to GDP, but it does not affect investment or consumption. 
D)  a positive contribution to investment, but it does not affect GDP. 
A)  a positive contribution both to investment and to GDP. 
B)  a positive contribution both to consumption and to GDP. 
C)  a positive contribution to GDP, but it does not affect investment or consumption. 
D)  a positive contribution to investment, but it does not affect GDP.

Question 3

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A)  the value of unpaid housework 
B)  the value of services provided by major household appliances purchased in a previous period 
C)  the estimated rental value of owner-occupied homes 
D)  All of the above are included in GDP. 
A)  the value of unpaid housework 
B)  the value of services provided by major household appliances purchased in a previous period 
C)  the estimated rental value of owner-occupied homes 
D)  All of the above are included in GDP.

Question 4

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)  The 2014 sale increased 2014 GDP by $260,000 and had no effect on 2011 GDP. 
B)  The 2014 sale increased 2014 GDP by $20,000 and had no effect on 2011 GDP. 
C)  The 2014 sale increased 2014 GDP by $260,000; furthermore, the 2014 sale caused 2011 GDP to be revised upward by $20,000. 
D)  The 2014 sale affected neither 2014 GDP nor 2011 GDP. 
A)  The 2014 sale increased 2014 GDP by $260,000 and had no effect on 2011 GDP. 
B)  The 2014 sale increased 2014 GDP by $20,000 and had no effect on 2011 GDP. 
C)  The 2014 sale increased 2014 GDP by $260,000; furthermore, the 2014 sale caused 2011 GDP to be revised upward by $20,000. 
D)  The 2014 sale affected neither 2014 GDP nor 2011 GDP.

Question 5

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Accepted Answer

A) True 
 B)False

Question 6

Figure 23-1.  
-Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Accepted Answer

A)  W, X, Y and Z 
B)  K, M, L and N 
C)  C, K, M and D 
D)  A, L, N and B 
A)  W, X, Y and Z 
B)  K, M, L and N 
C)  C, K, M and D 
D)  A, L, N and B

Question 7

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Accepted Answer

A) True 
 B)False

Question 8

A farmer sells $25,000 worth of apples to individuals who take them home to eat, $50,000 worth of apples to a company that uses them all to produce cider, and $75,000 worth of apples to a grocery store that will sell them to households. How much of the farmer's sales will be included as apples in GDP?

Accepted Answer

A)  $25,000 
B)  $150,000 
C)  $100,000 
D)  $125,000 
A)  $25,000 
B)  $150,000 
C)  $100,000 
D)  $125,000

Question 9

Which of the following is included in the investment component of GDP?

Accepted Answer

A)  households' purchases of newly constructed homes 
B)  net additions to firms' inventories 
C)  firms' purchases of capital equipment 
D)  All of the above are correct. 
A)  households' purchases of newly constructed homes 
B)  net additions to firms' inventories 
C)  firms' purchases of capital equipment 
D)  All of the above are correct.

Question 10

In the economy of Talikastan in 2015, exports were $200, GDP was $2000, government purchases were $200, imports were $270, and investment was $500. What was Talikastan's consumption in 2015?

Accepted Answer

A)  $830 
B)  $1230 
C)  $1370 
D)  $1770 
A)  $830 
B)  $1230 
C)  $1370 
D)  $1770

Question 11

Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year.
  
-Refer to Table 23-12. Calculate the GDP deflator for 2012 and 2013.

Accepted Answer

GDP deflator is 127.

Question 12

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Accepted Answer

GDP is reported ever

Question 13

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes

Accepted Answer

A)  1/2 times as much to GDP as the production of good B. 
B)  3/2 times as much to GDP as the production of good B. 
C)  3/4 times as much to GDP as the production of good B. 
D)  4/3 times as much to GDP as production of good B. 
A)  1/2 times as much to GDP as the production of good B. 
B)  3/2 times as much to GDP as the production of good B. 
C)  3/4 times as much to GDP as the production of good B. 
D)  4/3 times as much to GDP as production of good B.

Question 14

Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.
  
-Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

Accepted Answer

A)  8.09, -11.7 
B)  8.09.16, -13.3 
C)  1236.46, 11.7 
D)  1236.46, 13.3 
A)  8.09, -11.7 
B)  8.09.16, -13.3 
C)  1236.46, 11.7 
D)  1236.46, 13.3

Question 15

Table 23-1
The table below contains data for Chereaux for the year 2015.
  
-Refer to Table 23-1. Disposable personal income for Chereaux in 2015 is

Accepted Answer

A)  $190. 
B)  $211. 
C)  $130. 
D)  $141. 
A)  $190. 
B)  $211. 
C)  $130. 
D)  $141.

Question 16

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

Accepted Answer

A)  inventory goods. 
B)  transitory goods. 
C)  final goods. 
D)  intermediate goods. 
A)  inventory goods. 
B)  transitory goods. 
C)  final goods. 
D)  intermediate goods.

Question 17

Real GDP per person tells us the income and expenditure of the average person in the economy.

Accepted Answer

A) True 
 B)False

Question 18

Identify the immediate effect of each of the following events on U.S. GDP and its components.
a. James receives a Social Security check.
b. John buys an Italian sports car.
c. Henry buys domestically produced tools for his construction company.

Accepted Answer

a. Since this is a transfer payment, the

Question 19

In the economy of Talikastan in 2015, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $1800, and imports were $1200. What was Talikastan's investment in 2015?

Accepted Answer

A)  $0 
B)  $1200 
C)  $2400 
D)  $5600 
A)  $0 
B)  $1200 
C)  $2400 
D)  $5600

Question 20

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Accepted Answer

A)  U.S. consumption purchases increase by $200 and U.S. GDP increases by $200. 
B)  U.S. consumption purchases increase by $200 and U.S. GDP increases by $10,000. 
C)  U.S. consumption purchases increase by $10,000 and U.S. GDP increases by $10,200. 
D)  U.S. consumption purchases increase by $10,200 and U.S. GDP increases by $10,200. 
A)  U.S. consumption purchases increase by $200 and U.S. GDP increases by $200. 
B)  U.S. consumption purchases increase by $200 and U.S. GDP increases by $10,000. 
C)  U.S. consumption purchases increase by $10,000 and U.S. GDP increases by $10,200. 
D)  U.S. consumption purchases increase by $10,200 and U.S. GDP increases by $10,200.

Exam 10: Measuring a Nations Income

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

Estimates of the values of which of the following non-market goods or services are included in GDP?

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Figure 23-1. -Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Which of the following is included in the investment component of GDP?

In the economy of Talikastan in 2015, exports were $200, GDP was $2000, government purchases were $200, imports were $270, and investment was $500. What was Talikastan's consumption in 2015?

Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate the GDP deflator for 2012 and 2013.

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Disposable personal income for Chereaux in 2015 is

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

Real GDP per person tells us the income and expenditure of the average person in the economy.

Identify the immediate effect of each of the following events on U.S. GDP and its components. a. James receives a Social Security check. b. John buys an Italian sports car. c. Henry buys domestically produced tools for his construction company.

In the economy of Talikastan in 2015, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $1800, and imports were $1200. What was Talikastan's investment in 2015?

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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