Question 1

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

Question 2

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

Accepted Answer

A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion. 
A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion.

Question 3

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 4

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Accepted Answer

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

Question 5

Table 23-1
The table below contains data for Chereaux for the year 2015.  
-Refer to Table 23-1. Personal income for Chereaux in 2015 is

Accepted Answer

A)  $178. 
B)  $201. 
C)  $259. 
D)  $196. 
A)  $178. 
B)  $201. 
C)  $259. 
D)  $196.

Question 6

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

Accepted Answer

A)  In 2015, Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The 2000 pounds of cheese remains in Frank's inventory at the end of 2015. 
B)  An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time. 
C)  When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,500 per month. 
D)  All of the above transactions add to U.S. GDP for 2015. 
A)  In 2015, Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The 2000 pounds of cheese remains in Frank's inventory at the end of 2015. 
B)  An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time. 
C)  When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,500 per month. 
D)  All of the above transactions add to U.S. GDP for 2015.

Question 7

In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015?

Accepted Answer

A)  $1200 
B)  $1900 
C)  $2500 
D)  $4500 
A)  $1200 
B)  $1900 
C)  $2500 
D)  $4500

Question 8

Gasoline is considered a final good if it is sold by a

Accepted Answer

A)  gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. 
B)  pipeline operator to a gasoline station in San Francisco. 
C)  gasoline station to a motorist in Los Angeles. 
D)  All of the above are correct. 
A)  gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. 
B)  pipeline operator to a gasoline station in San Francisco. 
C)  gasoline station to a motorist in Los Angeles. 
D)  All of the above are correct.

Question 9

Retained earnings is income that

Accepted Answer

A)  households retain after paying taxes. 
B)  businesses retain after paying taxes. 
C)  corporations have earned but have not used to invest in plant, equipment, and inventories. 
D)  corporations have earned but have not paid out to their owners. 
A)  households retain after paying taxes. 
B)  businesses retain after paying taxes. 
C)  corporations have earned but have not used to invest in plant, equipment, and inventories. 
D)  corporations have earned but have not paid out to their owners.

Question 10

Gross domestic product includes all

Accepted Answer

A)  legal and illegal final goods, but it excludes all legal and illegal final services. 
B)  legal and illegal final goods and all legal and illegal final services. 
C)  legal final goods and services, but it excludes illegal final goods and services. 
D)  legal and illegal final goods and legal final services, but it excludes illegal final services. 
A)  legal and illegal final goods, but it excludes all legal and illegal final services. 
B)  legal and illegal final goods and all legal and illegal final services. 
C)  legal final goods and services, but it excludes illegal final goods and services. 
D)  legal and illegal final goods and legal final services, but it excludes illegal final services.

Question 11

Grapes are considered intermediate goods

Accepted Answer

A)  whether the purchaser uses them to make wine to sell or eats them. 
B)  if the purchaser uses them to make wine to sell others but not if the purchaser eats them. 
C)  if the purchaser eats them, but not if the purchaser uses to them to make wine to sell. 
D)  None of the above is correct. 
A)  whether the purchaser uses them to make wine to sell or eats them. 
B)  if the purchaser uses them to make wine to sell others but not if the purchaser eats them. 
C)  if the purchaser eats them, but not if the purchaser uses to them to make wine to sell. 
D)  None of the above is correct.

Question 12

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following items is included in GDP?

Accepted Answer

A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP. 
A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP.

Question 15

According to the circular-flow diagram GDP

Accepted Answer

A)  can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production. 
B)  can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production. 
C)  can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services. 
D)  cannot be computed as either the revenue firms receive or the payments they make to factors of production. 
A)  can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production. 
B)  can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production. 
C)  can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services. 
D)  cannot be computed as either the revenue firms receive or the payments they make to factors of production.

Question 16

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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. This country's output grew

Accepted Answer

A)  31.3% from 2015 to 2016. 
B)  42.0% from 2016 to 2017. 
C)  15.4% from 2016 to 2017. 
D)  53.6% from 2017 to 2018. 
A)  31.3% from 2015 to 2016. 
B)  42.0% from 2016 to 2017. 
C)  15.4% from 2016 to 2017. 
D)  53.6% from 2017 to 2018.

Question 19

If consumption is $4000, exports are $300, government purchases are $1000, imports are $400, and investment is $800, then GDP is $5700.

Accepted Answer

A) True 
 B)False

Question 20

A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

Accepted Answer

A)  $500 
B)  $700 
C)  $1200 
D)  $1700 
A)  $500 
B)  $700 
C)  $1200 
D)  $1700

Exam 23: Measuring a Nations Income

Periods during which real GDP rises are called recessions.

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

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

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Personal income for Chereaux in 2015 is

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

In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015?

Gasoline is considered a final good if it is sold by a

Retained earnings is income that

Gross domestic product includes all

Grapes are considered intermediate goods

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

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

Which of the following items is included in GDP?

According to the circular-flow diagram GDP

Recessions are associated with lower incomes, rising unemployment, and falling profits.

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

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. This country's output grew

If consumption is $4000, exports are $300, government purchases are $1000, imports are $400, and investment is $800, then GDP is $5700.

A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

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