Question 1

Table 23-3
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 23-3. What was Crete's GDP in 2010?

Accepted Answer

A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839 
A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839

Question 2

Government purchases include spending on goods and services by

Accepted Answer

A)  the federal government, but not by state or local governments. 
B)  federal and state governments, but not by local governments. 
C)  federal, state, and local governments. 
D)  federal, state, and local governments, as well as household spending by employees of those governments. 
A)  the federal government, but not by state or local governments. 
B)  federal and state governments, but not by local governments. 
C)  federal, state, and local governments. 
D)  federal, state, and local governments, as well as household spending by employees of those governments.

Question 3

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A)  Argentina, Bolivia, Peru 
B)  Argentina, Peru, Bolivia 
C)  Bolivia, Argentina, Peru 
D)  Peru, Bolivia, Argentina 
A)  Argentina, Bolivia, Peru 
B)  Argentina, Peru, Bolivia 
C)  Bolivia, Argentina, Peru 
D)  Peru, Bolivia, Argentina

Question 4

Total income from the domestic production of final goods and services equals

Accepted Answer

A)  only household expenditures for these goods. 
B)  only household and business expenditures for these goods. 
C)  only household and government expenditures for these goods. 
D)  the expenditures for these goods whoever buys them. 
A)  only household expenditures for these goods. 
B)  only household and business expenditures for these goods. 
C)  only household and government expenditures for these goods. 
D)  the expenditures for these goods whoever buys them.

Question 5

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Accepted Answer

A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected. 
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000. 
C)  U.S. government purchases, net exports, and GDP are unaffected. 
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000. 
A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected. 
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000. 
C)  U.S. government purchases, net exports, and GDP are unaffected. 
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.

Question 6

In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $1688 
B)  $9000 
C)  $13,500 
D)  $15,000 
A)  $1688 
B)  $9000 
C)  $13,500 
D)  $15,000

Question 7

Explain how GNP differs from GDP.

Accepted Answer

GNP includes income from a nat

Question 8

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Accepted Answer

A)  investment. 
B)  government spending. 
C)  consumption of services. 
D)  consumption of durable goods. 
A)  investment. 
B)  government spending. 
C)  consumption of services. 
D)  consumption of durable goods.

Question 9

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A)  Ghana, Kenya, Tanzania 
B)  Ghana, Tanzania, Kenya 
C)  Kenya, Tanzania, Ghana 
D)  Kenya, Ghana, Tanzania 
A)  Ghana, Kenya, Tanzania 
B)  Ghana, Tanzania, Kenya 
C)  Kenya, Tanzania, Ghana 
D)  Kenya, Ghana, Tanzania

Question 10

In the United States in 2012, consumption represented approximately

Accepted Answer

A)  60 percent of GDP. 
B)  70 percent of GDP. 
C)  80 percent of GDP. 
D)  90 percent of GDP. 
A)  60 percent of GDP. 
B)  70 percent of GDP. 
C)  80 percent of GDP. 
D)  90 percent of GDP.

Question 11

GDP per person tells us the income and expenditure of the

Accepted Answer

A)  richest person in the economy. 
B)  poorest person in the economy. 
C)  average person in the economy. 
D)  entire economy. 
A)  richest person in the economy. 
B)  poorest person in the economy. 
C)  average person in the economy. 
D)  entire economy.

Question 12

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

Accepted Answer

A)  both the increased inventory of sugar and the increased inventory of energy drinks. 
B)  the increased inventory of sugar, but not the increased inventory of energy drinks. 
C)  the increased inventory of energy drinks, but not the increased inventory of sugar. 
D)  neither the increased inventory of sugar nor the increased inventory of energy drinks. 
A)  both the increased inventory of sugar and the increased inventory of energy drinks. 
B)  the increased inventory of sugar, but not the increased inventory of energy drinks. 
C)  the increased inventory of energy drinks, but not the increased inventory of sugar. 
D)  neither the increased inventory of sugar nor the increased inventory of energy drinks.

Question 13

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following transactions is not included in GDP?

Accepted Answer

A)  oranges sold to households by a grocer. 
B)  orange juice sold by a restaurant to its diners. 
C)  oranges sold by a farmer to a grocery store. 
D)  All of the above are included in GDP. 
A)  oranges sold to households by a grocer. 
B)  orange juice sold by a restaurant to its diners. 
C)  oranges sold by a farmer to a grocery store. 
D)  All of the above are included in GDP.

Question 15

A form of government spending that is not made in exchange for a currently produced good or service is called

Accepted Answer

A)  a transfer payment. 
B)  consumption. 
C)  investment. 
D)  None of the above is correct. 
A)  a transfer payment. 
B)  consumption. 
C)  investment. 
D)  None of the above is correct.

Question 16

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 real and nominal GDP for the year 2012.

Accepted Answer

Nominal GD

Question 17

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Accepted Answer

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

Question 18

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Accepted Answer

A)  longer life expectancy and a lower percentage of the population that is literate. 
B)  longer life expectancy and a higher percentage of the population that is literate. 
C)  very nearly the same life expectancy and a lower percentage of the population that is literate. 
D)  very nearly the same life expectancy and a higher percentage of the population that is literate. 
A)  longer life expectancy and a lower percentage of the population that is literate. 
B)  longer life expectancy and a higher percentage of the population that is literate. 
C)  very nearly the same life expectancy and a lower percentage of the population that is literate. 
D)  very nearly the same life expectancy and a higher percentage of the population that is literate.

Question 19

Countries with low GDP per person tend to have

Accepted Answer

A)  lower rates of child malnutrition. 
B)  fewer infants with low birth weight. 
C)  higher rates of infant mortality. 
D)  more access to safe drinking water. 
A)  lower rates of child malnutrition. 
B)  fewer infants with low birth weight. 
C)  higher rates of infant mortality. 
D)  more access to safe drinking water.

Question 20

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Accepted Answer

The GDP deflator for 2010 was

Exam 10: Measuring a Nations Income

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's GDP in 2010?

Government purchases include spending on goods and services by

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Total income from the domestic production of final goods and services equals

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

Explain how GNP differs from GDP.

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

In the United States in 2012, consumption represented approximately

GDP per person tells us the income and expenditure of the

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Which of the following transactions is not included in GDP?

A form of government spending that is not made in exchange for a currently produced good or service is called

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 real and nominal GDP for the year 2012.

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Countries with low GDP per person tend to have

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

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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