Question 1

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1

Question 2

Table 23-1
The table below contains data for Chereaux for the year 2015.
  
-Refer to Table 23-1. Gross national product for Chereaux in 2015 is

Accepted Answer

A)  $186. 
B)  $214. 
C)  $200. 
D)  $204. 
A)  $186. 
B)  $214. 
C)  $200. 
D)  $204.

Question 3

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Accepted Answer

A)  $1 million 
B)  $3 million 
C)  $4 million 
D)  $5 million 
A)  $1 million 
B)  $3 million 
C)  $4 million 
D)  $5 million

Question 4

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

Accepted Answer

A)  the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP. 
B)  the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP. 
C)  the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP. 
D)  the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and added to the investment category of 2015 GDP. 
A)  the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP. 
B)  the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP. 
C)  the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP. 
D)  the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and added to the investment category of 2015 GDP.

Question 5

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator?

Accepted Answer

A)  25. 
B)  40. 
C)  250. 
D)  400. 
A)  25. 
B)  40. 
C)  250. 
D)  400.

Question 6

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Accepted Answer

A) True 
 B)False

Question 7

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Accepted Answer

A)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83. 
A)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.

Question 8

International data on GDP and socioeconomic variables

Accepted Answer

A)  are inconclusive about the relationship between GDP and the economic well-being of citizens. 
B)  suggest that poor nations actually might enjoy a higher standard of living than do rich nations. 
C)  leave no doubt that a nation's GDP is closely associated with its citizens' standard of living. 
D)  indicate that there are few real differences in living standards around the world, in spite of the large differences in GDP between nations. 
A)  are inconclusive about the relationship between GDP and the economic well-being of citizens. 
B)  suggest that poor nations actually might enjoy a higher standard of living than do rich nations. 
C)  leave no doubt that a nation's GDP is closely associated with its citizens' standard of living. 
D)  indicate that there are few real differences in living standards around the world, in spite of the large differences in GDP between nations.

Question 9

U.S. GNP

Accepted Answer

A)  includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign countries. 
A)  includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign countries.

Question 10

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Accepted Answer

A)  both Mexican GDP and U.S. GDP. 
B)  Mexican GDP, but it is not included in U.S. GDP. 
C)  U.S. GDP, but it is not included in Mexican GDP. 
D)  neither Mexican GDP nor U.S. GDP. 
A)  both Mexican GDP and U.S. GDP. 
B)  Mexican GDP, but it is not included in U.S. GDP. 
C)  U.S. GDP, but it is not included in Mexican GDP. 
D)  neither Mexican GDP nor U.S. GDP.

Question 11

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Accepted Answer

The answer of Last quarter Newton computers produced 3,000 computers....

Question 12

Between 1929 and 1933, NNP measured in current prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75.
a. What was the percentage decline in nominal NNP from 1929 to1933?
b. What was the percentage decline in real NNP from 1929 to 1933? Show your work.

Accepted Answer

a. NNP measured in current prices is nom

Question 13

On the basis of the information presented in the table below, which presents the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A)  Atlantis, Merpois, Bensalem 
B)  Bensalem, Atlantis, Merpois 
C)  Atlantis, Bensalem, Merpois 
D)  Bensalem, Merpois, Atlantis 
A)  Atlantis, Merpois, Bensalem 
B)  Bensalem, Atlantis, Merpois 
C)  Atlantis, Bensalem, Merpois 
D)  Bensalem, Merpois, Atlantis

Question 14

Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

Accepted Answer

A)  $21,000 
B)  $28,000 
C)  $7,000 
D)  $14,000 
A)  $21,000 
B)  $28,000 
C)  $7,000 
D)  $14,000

Question 15

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Accepted Answer

A)  U.S. net exports decrease and U.S. GDP decreases. 
B)  U.S. net exports are unaffected and U.S. GDP decreases. 
C)  U.S. net exports are unaffected and U.S. GDP is unaffected. 
D)  U.S. net exports decrease and U.S. GDP is unaffected. 
A)  U.S. net exports decrease and U.S. GDP decreases. 
B)  U.S. net exports are unaffected and U.S. GDP decreases. 
C)  U.S. net exports are unaffected and U.S. GDP is unaffected. 
D)  U.S. net exports decrease and U.S. GDP is unaffected.

Question 16

In a simple circular-flow diagram,

Accepted Answer

A)  households spend all of their income. 
B)  all goods and services are bought by households. 
C)  expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. 
D)  All of the above are correct. 
A)  households spend all of their income. 
B)  all goods and services are bought by households. 
C)  expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. 
D)  All of the above are correct.

Question 17

Consumption is $7 trillion, investment is $1.5 trillion, government expenditures are $2 trillion, government transfer payments are $1 trillion, exports are $1.50 trillion and imports are $1.25 trillion. What is GDP?

Accepted Answer

GDP = C + I + G + NX = $7 tril

Question 18

Figure 23-2.  
-Refer to Figure 23-2. Identify the location of firms and households.

Accepted Answer

W is firms

Question 19

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974.
  
-Refer to Table 23-7. From 1975 to 1976,

Accepted Answer

A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew. 
A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew.

Question 20

For an economy as a whole, income must exceed expenditure.

Accepted Answer

A) True 
 B)False

Exam 10: Measuring a Nations Income

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Gross national product for Chereaux in 2015 is

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator?

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

International data on GDP and socioeconomic variables

U.S. GNP

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

On the basis of the information presented in the table below, which presents the correct ordering of real GDP per person from highest to lowest?

Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

If a U.S. citizen buys a television made in Korea by a Korean firm, then

In a simple circular-flow diagram,

Consumption is $7 trillion, investment is $1.5 trillion, government expenditures are $2 trillion, government transfer payments are $1 trillion, exports are $1.50 trillion and imports are $1.25 trillion. What is GDP?

Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. From 1975 to 1976,

For an economy as a whole, income must exceed expenditure.

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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