Question 1

11 Appendix: Numeric and Graphing Questions
 
-The figure above shows the price of a DVD player from 2003 to 2007.
a) What type of graph is illustrated above?
b) What is the trend in the price of a DVD player?

Accepted Answer

The answer of 11 Appendix: Numeric and Graphing Questions
 
-The...

Question 2

An example of "investment" in the national income accounts is the purchase of

Accepted Answer

A)  a new van by a potter, who packs it with his wares and travels to art shows. 
B)  100 shares of Intel stock on the New York Stock Exchange. 
C)  a 100-year-old house that was just put on the protected historic sites list in the year in question. 
D)  a U.S. government bond.

Question 3

If depreciation exceeds gross investment,net investment is negative.

Accepted Answer

A) True 
 B)False

Question 4

Why are only final goods and services included in measuring GDP?
Give examples to complete your answer.

Accepted Answer

The answer of Why are only final goods and services...

Question 5

An economy recovering from a recession

Accepted Answer

A)  moves up from its trough to a period of expansion. 
B)  moves up from its peak to a period of expansion. 
C)  moves down from its trough to a period of depression. 
D)  moves down from its peak to a period of expansion.

Question 6

Real GDP in 2012 is $10 trillion.Between 2012 and 2013,using 2012 prices,GDP grew 3 percent and using 2013 prices real GDP grew 7 percent.Using the chain-weighted output index method,real GDP in 2013 is ________ trillion.

Accepted Answer

A)  $10.5 
B)  $11 
C)  $10.1 
D)  $12.72

Question 7

According to the BEA,in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent.The difference between the change in nominal GDP and the change in real GDP could be explained by

Accepted Answer

A)  an increase in prices of final goods and services produced. 
B)  a decrease in prices of final goods and services produced. 
C)  an increase in quantity of final goods and services produced. 
D)  a decrease in quantity of final goods and services produced.

Question 8

The use of purchasing power parity prices

Accepted Answer

A)  decreases the real GDP per person statistics published by the International Monetary Fund. 
B)  weakens the validity of cross country comparisons of economic welfare. 
C)  increases the amount by which U.S. GDP is larger than that of any other nation. 
D)  accounts for differences in the prices of the same goods in different countries when measuring real GDP.

Question 9

The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euros,in constant prices): 2006 2007
Consumption 84,000 89,000
Government expenditure 24,000 26,000
Investment 48,000 48,000
Exports 142,000 151,000
Imports 123,000 128,000
Subsidies 1,800 1,900
Taxes 500 500
In 2007,Ireland's net exports was ________ million euros.

Accepted Answer

A)  23,000 
B)  -23,000 
C)  279,000 
D)  149,100

Question 10

"Life expectancy is exceptionally high in Japan. Scores for political freedom and civil liberties approach those of peer countries in Europe...equality of opportunity is extremely weak. The country also possesses one of the longer working weeks." Japan's GDP was estimated to be $4.2 trillion (purchasing power parity) and the population was 127.4 million.
"Driven by its attractive climate, Brazil performs substantially better on Life Satisfaction than Material Wealth. High international demand for Brazil's commodities and raw materials has produced a sustained economic expansion since 2004, which in turn has led to job creation, wage growth and relatively low inflation. Brazilians report that they control their own lives to a substantial degree." Brazil's GDP was estimated to be $1.7 trillion (purchasing power parity) and 190 million in 2006.
www.prosperity.com
-According to the article,we can conclude that the standard of living

Accepted Answer

A)  is higher in Brazil because its citizens feel more control over their lives and have experienced job and wage growth. 
B)  is higher in Japan because their life expectancy is longer. 
C)  is higher in Japan because its GDP is higher. 
D)  might be higher in Japan because it has a higher per capita real GDP but other factors such as Brazilians' satisfaction with their lives and economic growth should be considered when determining economic well being.

Question 11

________ gross domestic product is the value of ________ linked back to the prices of a single year.

Accepted Answer

A)  Real; total production 
B)  Real; production possibilities 
C)  Productivity; the consumer price index 
D)  Nominal; total production

Question 12

If Frito Lay,an American snack company,opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America,then Mexico's GDP ________ and U.S.GDP ________.

Accepted Answer

A)  increases; does not change 
B)  does not change; increases 
C)  increases; decreases 
D)  increases; increases

Question 13

Gross investment equals net investment plus

Accepted Answer

A)  capital. 
B)  capital gains. 
C)  depreciation. 
D)  dividends paid to the owners of the company.

Question 14

All economic activity in the underground economy represents the production of illegal goods and services.

Accepted Answer

A) True 
 B)False

Question 15

Explain the relationship between potential GDP and real GDP in the United States since the early 1960s.You do not need to tell what happened during any specific year; just describe the general relationship.

Accepted Answer

The answer of Explain the relationship between potential GDP and...

Question 16

GDP equals

Accepted Answer

A)  aggregate expenditure. 
B)  aggregate income. 
C)  the value of the aggregate production in a country during a given time period. 
D)  all of the above

Question 17

4 News Based Questions
"As the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be China's ability to plough on regardless of double-digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent in each of the last two months".
Beijing's Burden, www.FT.com, by Geoff Dyer, Sept. 23, 2008
-According to the article,________ can be expected to ________ this year.

Accepted Answer

A)  exports; increase 
B)  consumption; decrease 
C)  imports; decrease 
D)  net interest income; decrease

Question 18

Assume a small nation has the following statistics: its consumption expenditure is $15 million,investment is $2 million,government purchases of goods and services is $1 million,exports of goods and services to foreigners is $1 million,and imports of goods and services from foreigners is $1.5 million.Calculate this nation's GDP.

Accepted Answer

The answer of Assume a small nation has the following...

Question 19

Which of the following is included in the category of corporate profits when measuring GDP?
I. Profits paid as dividends.
II. Undistributed profits.
III. Income received by owners and operators of businesses.

Accepted Answer

A)  I only 
B)  I and II 
C)  I and III 
D)  I, II and III

Question 20

In 2012,net exports in the United States were

Accepted Answer

A)  zero. 
B)  positive. 
C)  negative. 
D)  greater than personal consumption expenditures.

Exam 4: Measuring GDP and Economic Growth

11 Appendix: Numeric and Graphing Questions -The figure above shows the price of a DVD player from 2003 to 2007. a) What type of graph is illustrated above? b) What is the trend in the price of a DVD player?