Question 1

For the purpose of calculating GDP, investment is spending on

Accepted Answer

A)  stocks, bonds, and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment, inventories, and structures, including household purchases of new housing. 
D)  capital equipment, inventories, and structures, excluding household purchases of new housing. 
A)  stocks, bonds, and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment, inventories, and structures, including household purchases of new housing. 
D)  capital equipment, inventories, and structures, excluding household purchases of new housing.

Question 2

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 was the growth rate of real GDP for 1931?

Accepted Answer

A)  -6.93%. Real GDP is a better gauge of economic well-being than nominal GDP. 
B)  -6.93%. Nominal GDP is a better gauge of economic well-being than real GDP. 
C)  -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP. 
D)  -6.49%. Nominal GDP is a better gauge of economic well-being than real GDP. 
A)  -6.93%. Real GDP is a better gauge of economic well-being than nominal GDP. 
B)  -6.93%. Nominal GDP is a better gauge of economic well-being than real GDP. 
C)  -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP. 
D)  -6.49%. Nominal GDP is a better gauge of economic well-being than real GDP.

Question 3

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Accepted Answer

A) True 
 B)False

Question 4

A U.S.-owned automobile factory uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Accepted Answer

A)  $300,000 
B)  $500,000 
C)  $600,000 
D)  $700,000 
A)  $300,000 
B)  $500,000 
C)  $600,000 
D)  $700,000

Question 5

Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015.
Prices and Quantities  
-Refer to Table 23-5. In 2017, this country's

Accepted Answer

A)  real GDP was $900, and the GDP deflator was 138.9. 
B)  real GDP was $1250, and the GDP deflator was 128.0. 
C)  real GDP was $900, and the GDP deflator was 128.0. 
D)  real GDP was $1250, and the GDP deflator was 138.9. 
A)  real GDP was $900, and the GDP deflator was 138.9. 
B)  real GDP was $1250, and the GDP deflator was 128.0. 
C)  real GDP was $900, and the GDP deflator was 128.0. 
D)  real GDP was $1250, and the GDP deflator was 138.9.

Question 6

Which of the following is not included in GDP?

Accepted Answer

A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP. 
A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP.

Question 7

Table 23-9
A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.
Prices and Quantities  
-Refer to Table 23-9. In 2009, this country's

Accepted Answer

A)  real GDP was $250, and the GDP deflator was 125. 
B)  real GDP was $250, and the GDP deflator was 120. 
C)  real GDP was $240, and the GDP deflator was 125. 
D)  real GDP was $240, and the GDP deflator was 120. 
A)  real GDP was $250, and the GDP deflator was 125. 
B)  real GDP was $250, and the GDP deflator was 120. 
C)  real GDP was $240, and the GDP deflator was 125. 
D)  real GDP was $240, and the GDP deflator was 120.

Question 8

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a question addressed by macroeconomists?

Accepted Answer

A)  Why is average income high in some nations but low in others? 
B)  What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? 
C)  What is the impact of foreign competition on the U.S. auto industry? 
D)  Why do production and employment expand in some years and contract in others? 
A)  Why is average income high in some nations but low in others? 
B)  What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? 
C)  What is the impact of foreign competition on the U.S. auto industry? 
D)  Why do production and employment expand in some years and contract in others?

Question 10

Which of the following always uses prices and quantities from the same period?

Accepted Answer

A)  both nominal and real GDP. 
B)  nominal GDP but not real GDP. 
C)  real GDP but not nominal GDP. 
D)  neither nominal or real GDP. 
A)  both nominal and real GDP. 
B)  nominal GDP but not real GDP. 
C)  real GDP but not nominal GDP. 
D)  neither nominal or real GDP.

Question 11

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Accepted Answer

A)  87.5. 
B)  114.3. 
C)  400. 
D)  896. 
A)  87.5. 
B)  114.3. 
C)  400. 
D)  896.

Question 12

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 13

Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.  
-Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased

Accepted Answer

A)  8.62%. 
B)  9.43%. 
C)  11.97%. 
D)  13.6%. 
A)  8.62%. 
B)  9.43%. 
C)  11.97%. 
D)  13.6%.

Question 14

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

A)  then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B)  then GDP will be higher, but consumption spending will be unchanged. 
C)  then GDP will be unchanged, but consumption spending will be higher. 
D)  then both GDP and consumption spending will be higher. 
A)  then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B)  then GDP will be higher, but consumption spending will be unchanged. 
C)  then GDP will be unchanged, but consumption spending will be higher. 
D)  then both GDP and consumption spending will be higher.

Question 15

If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is

Accepted Answer

A)  80, and this indicates that the price level has decreased by 20 percent since the base year. 
B)  80, and this indicates that the price level has increased by 80 percent since the base year. 
C)  125, and this indicates that the price level has increased by 25 percent since the base year. 
D)  125, and this indicates that the price level has increased by 125 percent since the base year. 
A)  80, and this indicates that the price level has decreased by 20 percent since the base year. 
B)  80, and this indicates that the price level has increased by 80 percent since the base year. 
C)  125, and this indicates that the price level has increased by 25 percent since the base year. 
D)  125, and this indicates that the price level has increased by 125 percent since the base year.

Question 16

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 17

GDP does not reflect

Accepted Answer

A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct. 
A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct.

Question 18

Which of the following transactions adds to U.S. GDP for 2015?

Accepted Answer

A)  In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000. 
B)  An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time. 
C)  When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month. 
D)  None of the above transactions adds to U.S. GDP for 2015. 
A)  In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000. 
B)  An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time. 
C)  When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month. 
D)  None of the above transactions adds to U.S. GDP for 2015.

Question 19

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

Accepted Answer

A)  $1130 
B)  $1601 
C)  $1837 
D)  $2544 
A)  $1130 
B)  $1601 
C)  $1837 
D)  $2544

Question 20

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Accepted Answer

A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate. 
A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate.

Exam 23: Measuring a Nations Income

For the purpose of calculating GDP, investment is spending on

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 was the growth rate of real GDP for 1931?

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

A U.S.-owned automobile factory uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. In 2017, this country's

Which of the following is not included in GDP?

Table 23-9 A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities -Refer to Table 23-9. In 2009, this country's

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Which of the following is not a question addressed by macroeconomists?

Which of the following always uses prices and quantities from the same period?

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased

If you buy a burger and fries at your favorite fast food restaurant,

If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator 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?

GDP does not reflect

Which of the following transactions adds to U.S. GDP for 2015?

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

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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