Question 1

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)  U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100. 
B)  U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100. 
C)  U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change. 
D)  U.S. consumption increases by $100, U.S. net exports do not change, and U.S. GDP increases by $100. 
A)  U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100. 
B)  U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100. 
C)  U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change. 
D)  U.S. consumption increases by $100, U.S. net exports do not change, and U.S. GDP increases by $100.

Question 2

What three types of goods are included in investment spending?

Accepted Answer

capital equipment, i

Question 3

Much of macroeconomics attempts to explain

Accepted Answer

A)  changes in the price of oil and gasoline. 
B)  long-run growth and short-run fluctuations in real GDP. 
C)  changes in the growth rate of state government spending. 
D)  changes in the prices and quantities of individual goods and services. 
A)  changes in the price of oil and gasoline. 
B)  long-run growth and short-run fluctuations in real GDP. 
C)  changes in the growth rate of state government spending. 
D)  changes in the prices and quantities of individual goods and services.

Question 4

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Accepted Answer

A)  U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases. 
B)  U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected. 
C)  U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases. 
D)  U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected. 
A)  U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases. 
B)  U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected. 
C)  U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases. 
D)  U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected.

Question 5

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.  
-Refer to Table 23-6. In 2010, this country's GDP deflator was

Accepted Answer

A)  41.9. 
B)  100. 
C)  165.0. 
D)  This cannot be calculated from the information given. 
A)  41.9. 
B)  100. 
C)  165.0. 
D)  This cannot be calculated from the information given.

Question 6

If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175, then the inflation rate in 2010 was 25%.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Identify the largest and smallest components of GDP.

Accepted Answer

Consumption is the l

Question 9

Explain how GNP differs from GDP.

Accepted Answer

GNP includes income from a nat

Question 10

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 2015, this country's

Accepted Answer

A)  nominal GDP was greater than real GDP, and the GDP deflator was greater than 100. 
B)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%. 
C)  nominal GDP was less than real GDP, and the GDP deflator was less than 100. 
D)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100. 
A)  nominal GDP was greater than real GDP, and the GDP deflator was greater than 100. 
B)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%. 
C)  nominal GDP was less than real GDP, and the GDP deflator was less than 100. 
D)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100.

Question 11

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Accepted Answer

A)  Bolivia, Thailand, United States, Sweden. 
B)  Thailand, United States, Sweden, Bolivia. 
C)  United States, Bolivia, Sweden, Thailand. 
D)  Bolivia, Thailand, Sweden, United States. 
A)  Bolivia, Thailand, United States, Sweden. 
B)  Thailand, United States, Sweden, Bolivia. 
C)  United States, Bolivia, Sweden, Thailand. 
D)  Bolivia, Thailand, Sweden, United States.

Question 12

Tom and Lilly rented a house for $12,000 last year. At the start of the year they bought the house they had been renting directly from the owner for $250,000. They believe they could rent it for $12,000 this year, but stay in the house. How much does Tom and Lilly's decision to buy the house change GDP?

Accepted Answer

A)  it reduces GDP by $12,000 
B)  it does not change GDP 
C)  it raises GDP by $238,000 
D)  it raises GDP by $250,000 
A)  it reduces GDP by $12,000 
B)  it does not change GDP 
C)  it raises GDP by $238,000 
D)  it raises GDP by $250,000

Question 13

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 14

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $1350 
B)  $1450 
C)  $1050 
D)  $1750 
A)  $1350 
B)  $1450 
C)  $1050 
D)  $1750

Question 15

The underground economy

Accepted Answer

A)  excludes the amount of criminal activity in an economy. 
B)  is larger for developed nations than developing nations when measured as a percent of GDP. 
C)  includes otherwise legal transactions that go unreported or unrecorded. 
D)  in the United States is insignificant is size when compared to the official measure of GDP. 
A)  excludes the amount of criminal activity in an economy. 
B)  is larger for developed nations than developing nations when measured as a percent of GDP. 
C)  includes otherwise legal transactions that go unreported or unrecorded. 
D)  in the United States is insignificant is size when compared to the official measure of GDP.

Question 16

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 17

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 18

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures. 
A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures.

Question 19

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.  
-Refer to Table 23-6. From 2012 to 2013, this country's output grew

Accepted Answer

A)  28.2%. 
B)  29.0%. 
C)  29.6%. 
D)  73.9%. 
A)  28.2%. 
B)  29.0%. 
C)  29.6%. 
D)  73.9%.

Question 20

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)  consumption, since the goods will be sold to consumers in another period. 
B)  intermediate goods, and so is not included in that year's GDP. 
C)  investment, since GDP aims to measure the value of the economy's production that year. 
D)  spending on durable goods, since the goods could not be inventoried unless they were durable. 
A)  consumption, since the goods will be sold to consumers in another period. 
B)  intermediate goods, and so is not included in that year's GDP. 
C)  investment, since GDP aims to measure the value of the economy's production that year. 
D)  spending on durable goods, since the goods could not be inventoried unless they were durable.

Exam 23: Measuring a Nations Income

When an American household purchases a bottle of Italian wine for $100,

What three types of goods are included in investment spending?

Much of macroeconomics attempts to explain

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2010, this country's GDP deflator was

If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175, then the inflation rate in 2010 was 25%.

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?

Identify the largest and smallest components of GDP.

Explain how GNP differs from 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 2015, this country's

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

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

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

The underground economy

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

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. From 2012 to 2013, this country's output grew

The value of goods added to a firm's inventory in a certain year is treated as

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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