Question 1

Calculate the inflation rate for a country where the GDP deflator rises from 120 to 165.

Accepted Answer

The answer of Calculate the inflation rate for a country...

Question 2

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 3

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

Accepted Answer

A)  increases by $40. 
B)  increases by $220. 
C)  increases by $280. 
D)  increases by $1500. 
A)  increases by $40. 
B)  increases by $220. 
C)  increases by $280. 
D)  increases by $1500.

Question 4

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 5

In the economy of Talikastan in 2015, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Talikastan's net exports in 2015?

Accepted Answer

A)  -$200 
B)  $200 
C)  $1800 
D)  Net exports cannot be calculated from the information given. 
A)  -$200 
B)  $200 
C)  $1800 
D)  Net exports cannot be calculated from the information given.

Question 6

Unemployment compensation is

Accepted Answer

A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits. 
A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits.

Question 7

When an Egyptian firm purchases a cement mixer from Slovakia,

Accepted Answer

A)  Egyptian investment does not change, Egyptian net exports decrease, Egyptian GDP decreases, Slovakian net exports increase, and Slovakian GDP increases. 
B)  Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases. 
C)  Egyptian investment decreases, Egyptian net exports increase, Egyptian GDP is unaffected, Slovakian net exports decrease, and Slovakian GDP decreases. 
D)  Egyptian investment increases, Egyptian net exports do not change, Egyptian GDP increases, Slovakian net exports do not change, and Slovakian GDP is unaffected. 
A)  Egyptian investment does not change, Egyptian net exports decrease, Egyptian GDP decreases, Slovakian net exports increase, and Slovakian GDP increases. 
B)  Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases. 
C)  Egyptian investment decreases, Egyptian net exports increase, Egyptian GDP is unaffected, Slovakian net exports decrease, and Slovakian GDP decreases. 
D)  Egyptian investment increases, Egyptian net exports do not change, Egyptian GDP increases, Slovakian net exports do not change, and Slovakian GDP is unaffected.

Question 8

Which of the following transactions would be included in GDP for 2015?

Accepted Answer

A)  In February 2015, Amanda sells a 2009 Hyundai to Isabella. 
B)  In March 2015, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in February 2016. 
C)  In November 2015, Isabella eats onions that she harvested from her backyard garden in October 2015. 
D)  All of the above are correct. 
A)  In February 2015, Amanda sells a 2009 Hyundai to Isabella. 
B)  In March 2015, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in February 2016. 
C)  In November 2015, Isabella eats onions that she harvested from her backyard garden in October 2015. 
D)  All of the above are correct.

Question 9

In the actual economy, goods and services are purchased by

Accepted Answer

A)  households, but not firms or the government. 
B)  households and firms, but not the government. 
C)  households and the government, but not firms. 
D)  households, firms, and the government. 
A)  households, but not firms or the government. 
B)  households and firms, but not the government. 
C)  households and the government, but not firms. 
D)  households, firms, and the government.

Question 10

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 11

Alexandria, a British citizen, owns and manages a fish and chips shop in Washington, D.C.
She buys fresh food produced by U.S. workers, pays utilities to a U.S. company, and employs only U.S. citizens. What part, if any, of the restaurant's production is included in U.S. GDP? What part, if any, of the restaurant's production is included in U.S. GNP?

Accepted Answer

All of the output is included

Question 12

For the economy as a whole,

Accepted Answer

A)  income must be greater than expenditure. 
B)  unemployment must rise when GDP rises. 
C)  expenditure must equal income. 
D)  consumption must be greater than investment. 
A)  income must be greater than expenditure. 
B)  unemployment must rise when GDP rises. 
C)  expenditure must equal income. 
D)  consumption must be greater than investment.

Question 13

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Accepted Answer

A) True 
 B)False

Question 14

A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A)  Mexican GNP and U.S. GNP. 
B)  Mexican GDP and U.S. GNP. 
C)  Mexican GNP and U.S. GDP. 
D)  Mexican GDP and U.S. GDP. 
A)  Mexican GNP and U.S. GNP. 
B)  Mexican GDP and U.S. GNP. 
C)  Mexican GNP and U.S. GDP. 
D)  Mexican GDP and U.S. GDP.

Question 15

According to the circular-flow diagram GDP

Accepted Answer

A)  can be computed as the total income paid by firms or as expenditures on final goods and services. 
B)  can be computed as the total income paid by firms, but not as expenditures on final goods and services. 
C)  can be computed as expenditures on final goods and services, but not as the total income paid by firms. 
D)  cannot be computed as either total income paid by firms or expenditures on final goods and services. 
A)  can be computed as the total income paid by firms or as expenditures on final goods and services. 
B)  can be computed as the total income paid by firms, but not as expenditures on final goods and services. 
C)  can be computed as expenditures on final goods and services, but not as the total income paid by firms. 
D)  cannot be computed as either total income paid by firms or expenditures on final goods and services.

Question 16

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .  
-Refer to Table 23-10. What was this country's nominal GDP in 2014?

Accepted Answer

A)  $9,500 
B)  $10,000 
C)  $10,200 
D)  $10,500 
A)  $9,500 
B)  $10,000 
C)  $10,200 
D)  $10,500

Question 17

Net exports equal

Accepted Answer

A)  exports plus imports. 
B)  imports minus exports. 
C)  Y - (C + I + G). 
D)  Y - (C - I - G). 
A)  exports plus imports. 
B)  imports minus exports. 
C)  Y - (C + I + G). 
D)  Y - (C - I - G).

Question 18

Expenditures by households on education are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not correct?

Accepted Answer

A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries, including the United States, GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments. 
A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries, including the United States, GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments.

Question 20

Changes in real GDP reflect

Accepted Answer

A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced. 
A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced.

Exam 23: Measuring a Nations Income

Calculate the inflation rate for a country where the GDP deflator rises from 120 to 165.

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

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

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

In the economy of Talikastan in 2015, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Talikastan's net exports in 2015?

Unemployment compensation is

When an Egyptian firm purchases a cement mixer from Slovakia,

Which of the following transactions would be included in GDP for 2015?

In the actual economy, goods and services are purchased by

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.

For the economy as a whole,

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

According to the circular-flow diagram GDP

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's nominal GDP in 2014?

Net exports equal

Expenditures by households on education are included in the investment component of GDP.

Which of the following is not correct?

Changes in real GDP reflect

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

Filters