Question 1

Real GDP measures the value of goods and services produced in a given year using

Accepted Answer

A) base year prices. 
B) prices of that same year. 
C) no prices. 
D) future prices. 
E) government approved prices. 
A) base year prices. 
B) prices of that same year. 
C) no prices. 
D) future prices. 
E) government approved prices.

Question 2

When an American college student in Davis,California spends $200 on a pair of Louis Vuitton jeans (a famous French brand),U.S.consumption ________,U.S.net exports ________,and U.S.GDP ________.

Accepted Answer

A) does not change;increases by $200;increases by $200 
B) increases by $200;decreases by $200;does not change 
C) increases by $200;does not change;increases by $200 
D) does not change;does not change;does not change 
E) does not change;decreases by $200;decreases by $200 
A) does not change;increases by $200;increases by $200 
B) increases by $200;decreases by $200;does not change 
C) increases by $200;does not change;increases by $200 
D) does not change;does not change;does not change 
E) does not change;decreases by $200;decreases by $200

Question 3

The base year is 2010.A country only produces MP3 players.The price of an MP3 player in 2008 was $50.The price of an MP3 player was $30 in 2010.The quantity of MP3 players produced in 2008 was 10,000 units and in 2010 was 20,000 units.Nominal GDP in 2010 equals

Accepted Answer

A) $1,000,000. 
B) $500,000. 
C) $600,000. 
D) $200,000. 
E) an amount that cannot be determined without information about real GDP in 2010. 
A) $1,000,000. 
B) $500,000. 
C) $600,000. 
D) $200,000. 
E) an amount that cannot be determined without information about real GDP in 2010.

Question 4

In a circular flow diagram,
I.the value of production = income.
Ii.the value of production = expenditure.
Iii.expenditure = income.

Accepted Answer

A) i,ii and iii are true statements. 
B) Only iii is a true statement. 
C) i and ii are true statements. 
D) i and iii are true statements. 
E) Only i is a true statement. 
A) i,ii and iii are true statements. 
B) Only iii is a true statement. 
C) i and ii are true statements. 
D) i and iii are true statements. 
E) Only i is a true statement.

Question 5

If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each,then we see that

Accepted Answer

A) GDP can be over 100 percent because it is "gross" rather than "net." 
B) the error is due to rounding. 
C) exports must be less than imports. 
D) exports must be more than imports. 
E) we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent. 
A) GDP can be over 100 percent because it is "gross" rather than "net." 
B) the error is due to rounding. 
C) exports must be less than imports. 
D) exports must be more than imports. 
E) we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent.

Question 6

Which of the following statement is correct?

Accepted Answer

A) If nominal GDP increases,then real GDP must increase. 
B) If nominal GDP decreases,then real GDP must increase. 
C) If real GDP decreases,then nominal GDP must decrease. 
D) Nominal and real GDP can change either in the same direction or the opposite direction. 
E) If nominal GDP does not change,then real GDP cannot change. 
A) If nominal GDP increases,then real GDP must increase. 
B) If nominal GDP decreases,then real GDP must increase. 
C) If real GDP decreases,then nominal GDP must decrease. 
D) Nominal and real GDP can change either in the same direction or the opposite direction. 
E) If nominal GDP does not change,then real GDP cannot change.

Question 7

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP.One of these adjustments is adding depreciation.What is depreciation and why must it be added?

Accepted Answer

Depreciation is the wear and tear of cap

Question 8

-The table gives data on the production and prices in a small economy.Use 2012 as the base period.
a.What does nominal GDP equal in 2012?
b.What does real GDP equal in 2012?
c.What does nominal GDP equal in 2013?
d.Using the chained-price method,what does real GDP equal in 2013?

Accepted Answer

a.Nominal GDP in 2012 equals $8.00.Nomin

Question 9

Which of the following is an example of an intermediate good or service?

Accepted Answer

A) gasoline purchased by Sam for her commute to work 
B) flour purchased by Jake to bake a cake for his spouse 
C) training seminars for employees of an accounting firm 
D) golf balls sold to Tiger Woods 
E) None of the above are examples of intermediate goods or services. 
A) gasoline purchased by Sam for her commute to work 
B) flour purchased by Jake to bake a cake for his spouse 
C) training seminars for employees of an accounting firm 
D) golf balls sold to Tiger Woods 
E) None of the above are examples of intermediate goods or services.

Question 10

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

Accepted Answer

The sentence is false.To calculate GDP,e

Question 11

Which of the following is classified as a final good or service?
I.tires bought by GM to put on new Tahoes
Ii.mustard bought by Subway to put on its sub sandwiches
Iii.your purchase of online access to the Wall Street Journal

Accepted Answer

A) i and ii 
B) i,ii and iii 
C) iii only 
D) ii and iii 
E) ii only 
A) i and ii 
B) i,ii and iii 
C) iii only 
D) ii and iii 
E) ii only

Question 12

Bobby was researching the economic growth of a country between 2006 and 2011.Using 2006 as the base year,he calculated a twelve percent increase for real GDP and a ten percent increase for nominal GDP.His results indicate that

Accepted Answer

A) he made an error when calculating nominal GDP. 
B) the quantity of goods and services produced decreased over the period. 
C) the quantity of goods and services produced increased and prices decreased over the period. 
D) the quantity of goods and services produced and prices both decreased over the period. 
E) the quantity of goods and services produced did not change and prices decreased over the period. 
A) he made an error when calculating nominal GDP. 
B) the quantity of goods and services produced decreased over the period. 
C) the quantity of goods and services produced increased and prices decreased over the period. 
D) the quantity of goods and services produced and prices both decreased over the period. 
E) the quantity of goods and services produced did not change and prices decreased over the period.

Question 13

Even though it is not a perfect measure,economists can use real GDP to
I.compare how the value of the goods and services produced in China
Have changed over the past 10 years.
Ii.look at the length of recessions and expansions in the United States.
Iii.compare the standard of living in China versus the standard of living in Vietnam.

Accepted Answer

A) ii only 
B) i,ii and iii 
C) i and iii 
D) i and ii 
E) ii and iii 
A) ii only 
B) i,ii and iii 
C) i and iii 
D) i and ii 
E) ii and iii

Question 14

If real GDP is greater than nominal GDP for a particular year,then

Accepted Answer

A) production must have fallen between the current year and the base year. 
B) production must have increased between the current year and the base year. 
C) prices must have fallen between the current year and the base year. 
D) prices must have risen between the current year and the base year. 
E) prices must have fallen between the current year and the immediate past year. 
A) production must have fallen between the current year and the base year. 
B) production must have increased between the current year and the base year. 
C) prices must have fallen between the current year and the base year. 
D) prices must have risen between the current year and the base year. 
E) prices must have fallen between the current year and the immediate past year.

Question 15

Where are the final goods and services produced that are included in Germany's GDP?

Accepted Answer

A) within Germany 
B) anywhere,as long as they are produced using German resources 
C) outside of Germany 
D) anywhere,as long as they are produced using German labor 
E) within Germany but only if they are produced using only German resources 
A) within Germany 
B) anywhere,as long as they are produced using German resources 
C) outside of Germany 
D) anywhere,as long as they are produced using German labor 
E) within Germany but only if they are produced using only German resources

Question 16

Undistributed profits ________ counted as part of GDP because ________.

Accepted Answer

A) are not;households are not paid by the firms 
B) are;they can be used to buy other goods 
C) are;they are considered income paid to households and loaned back to firms 
D) are not;they are considered an intermediate good 
E) are;firms are required to pay corporate income taxes on them 
A) are not;households are not paid by the firms 
B) are;they can be used to buy other goods 
C) are;they are considered income paid to households and loaned back to firms 
D) are not;they are considered an intermediate good 
E) are;firms are required to pay corporate income taxes on them

Question 17

Which of the following is likely to be an unreported economic activity?

Accepted Answer

A) a $250,000 bonus paid to the CEO of a company 
B) tips paid to a taxi driver 
C) the minimum wage paid to a teenager working at a McDonald's 
D) the brokerage fees paid to a broker at Merrill Lynch 
E) the purchase of shares of stock in Walgreen's Pharmacy 
A) a $250,000 bonus paid to the CEO of a company 
B) tips paid to a taxi driver 
C) the minimum wage paid to a teenager working at a McDonald's 
D) the brokerage fees paid to a broker at Merrill Lynch 
E) the purchase of shares of stock in Walgreen's Pharmacy

Question 18

List and discuss various types of goods and services omitted from measured GDP.

Accepted Answer

Household production,such as preparing m

Question 19

Because of the circular flows of expenditure and income in the economy,total ________ equals total ________ equals total ________.

Accepted Answer

A) expenditure;investment;income 
B) expenditure;income;value of production 
C) consumption;expenditure;value of production 
D) investment;income;consumption 
E) consumption;investment;expenditure 
A) expenditure;investment;income 
B) expenditure;income;value of production 
C) consumption;expenditure;value of production 
D) investment;income;consumption 
E) consumption;investment;expenditure

Question 20

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Accepted Answer

A) decreased by the estimated value of the pollution's harm. 
B) not affected by the estimated value of the pollution's harm. 
C) increased by the estimated value of the pollution's harm. 
D) changed by the pollution only when comparing its GDP with the U.S.GDP. 
E) None of the above answers is correct. 
A) decreased by the estimated value of the pollution's harm. 
B) not affected by the estimated value of the pollution's harm. 
C) increased by the estimated value of the pollution's harm. 
D) changed by the pollution only when comparing its GDP with the U.S.GDP. 
E) None of the above answers is correct.

Real GDP measures the value of goods and services produced in a given year using

When an American college student in Davis,California spends $200 on a pair of Louis Vuitton jeans (a famous French brand),U.S.consumption ,U.S.net exports ,and U.S.GDP .

The base year is 2010.A country only produces MP3 players.The price of an MP3 player in 2008 was $50.The price of an MP3 player was $30 in 2010.The quantity of MP3 players produced in 2008 was 10,000 units and in 2010 was 20,000 units.Nominal GDP in 2010 equals

In a circular flow diagram, I.the value of production = income. Ii.the value of production = expenditure. Iii.expenditure = income.

If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each,then we see that

Which of the following statement is correct?

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP.One of these adjustments is adding depreciation.What is depreciation and why must it be added?

-The table gives data on the production and prices in a small economy.Use 2012 as the base period. a.What does nominal GDP equal in 2012? b.What does real GDP equal in 2012? c.What does nominal GDP equal in 2013? d.Using the chained-price method,what does real GDP equal in 2013?

Which of the following is an example of an intermediate good or service?

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

Which of the following is classified as a final good or service? I.tires bought by GM to put on new Tahoes Ii.mustard bought by Subway to put on its sub sandwiches Iii.your purchase of online access to the Wall Street Journal

Bobby was researching the economic growth of a country between 2006 and 2011.Using 2006 as the base year,he calculated a twelve percent increase for real GDP and a ten percent increase for nominal GDP.His results indicate that

If real GDP is greater than nominal GDP for a particular year,then

Where are the final goods and services produced that are included in Germany's GDP?

Undistributed profits counted as part of GDP because .

Which of the following is likely to be an unreported economic activity?

List and discuss various types of goods and services omitted from measured GDP.

Because of the circular flows of expenditure and income in the economy,total equals total equals total .

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 14: Gdp: a Measure of Total Production and Income

Real GDP measures the value of goods and services produced in a given year using

When an American college student in Davis,California spends $200 on a pair of Louis Vuitton jeans (a famous French brand),U.S.consumption ________,U.S.net exports ________,and U.S.GDP ________.

The base year is 2010.A country only produces MP3 players.The price of an MP3 player in 2008 was $50.The price of an MP3 player was $30 in 2010.The quantity of MP3 players produced in 2008 was 10,000 units and in 2010 was 20,000 units.Nominal GDP in 2010 equals

In a circular flow diagram, I.the value of production = income. Ii.the value of production = expenditure. Iii.expenditure = income.

If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each,then we see that

Which of the following statement is correct?

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP.One of these adjustments is adding depreciation.What is depreciation and why must it be added?

-The table gives data on the production and prices in a small economy.Use 2012 as the base period. a.What does nominal GDP equal in 2012? b.What does real GDP equal in 2012? c.What does nominal GDP equal in 2013? d.Using the chained-price method,what does real GDP equal in 2013?

Which of the following is an example of an intermediate good or service?

"To calculate GDP,economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

Which of the following is classified as a final good or service? I.tires bought by GM to put on new Tahoes Ii.mustard bought by Subway to put on its sub sandwiches Iii.your purchase of online access to the Wall Street Journal

Bobby was researching the economic growth of a country between 2006 and 2011.Using 2006 as the base year,he calculated a twelve percent increase for real GDP and a ten percent increase for nominal GDP.His results indicate that

If real GDP is greater than nominal GDP for a particular year,then

Where are the final goods and services produced that are included in Germany's GDP?

Undistributed profits ________ counted as part of GDP because ________.

Which of the following is likely to be an unreported economic activity?

List and discuss various types of goods and services omitted from measured GDP.

Because of the circular flows of expenditure and income in the economy,total ________ equals total ________ equals total ________.

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

When an American college student in Davis,California spends $200 on a pair of Louis Vuitton jeans (a famous French brand),U.S.consumption ,U.S.net exports ,and U.S.GDP .

Undistributed profits counted as part of GDP because .

Because of the circular flows of expenditure and income in the economy,total equals total equals total .