Question 1

Table 8-20
2016 2018
 
-Refer to Table 8-20.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018,using 2016 as the base year.Show your work.

Accepted Answer

The answer of Table 8-20
2016 2018
 
-Refer to Table 8-20.Consider...

Question 2

Give two reasons why GDP does not reflect total production in an economy.

Accepted Answer

The answer of Give two reasons why GDP does not...

Question 3

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Accepted Answer

A) chained-weighted prices. 
B) fixed-weight prices. 
C) current-year prices. 
D) fixed base-year prices.

Question 4

Real GDP is GDP in a given year

Accepted Answer

A) adjusted only for anticipated inflation. 
B) adjusted only for unanticipated inflation. 
C) valued in the prices of that year. 
D) valued in the prices of the base year.

Question 5

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

Accepted Answer

A) True 
 B)False

Question 6

Gross national product (GNP)of the United States is the market value of all final goods and services

Accepted Answer

A) produced within the United States. 
B) consumed within the United States. 
C) produced by citizens of the United States anywhere in the world. 
D) consumed by citizens of the United States anywhere in the world.

Question 7

Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars,the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars,the value of the dollar from what period?

Accepted Answer

The answer of Is nominal GDP measured in terms of...

Question 8

Table 8-17
  A very simple economy produces three goods: movies,burgers,and bikes.The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 8-17.What is nominal GDP in 2013?

Accepted Answer

A) $3,320 
B) $3,690 
C) $6,360 
D) $7,035

Question 9

An example of a transfer payment is

Accepted Answer

A) a teacher's paycheck. 
B) a paycheck for a member of the National Guard. 
C) a welfare payment. 
D) a purchase of a new bridge in Alaska.

Question 10

Which of the following would result in GDP for an economy equal to $10 trillion?

Accepted Answer

A) C = $6 trillion I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion 
B) C = $7 trillion I = $2 trillion
G = $4 trillion
NX = $3 trillion 
C) C = $5 trillion I = $5 trillion
G = $2 trillion
NX = -$2 trillion 
D) C = $4 trillion I = $3 trillion
G = $2 trillion

Question 11

Explain the difference between gross domestic product and gross national product.Give an example of each.

Accepted Answer

The answer of Explain the difference between gross domestic product...

Question 12

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Accepted Answer

A) 270% 
B) 50% 
C) 5% 
D) 2.7%

Question 13

Suppose in 2018,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2018?

Accepted Answer

A) the value of the house in 2018 
B) the value of the house in 2003 
C) the value of the house in 2018 minus depreciation 
D) the value of the services of the real estate agent

Question 14

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is likely to increase measured GDP?

Accepted Answer

A) A greater number of women decide to stay at home and provide day care for their children under age 5. 
B) Marijuana becomes legal to grow and sell. 
C) Tax rates increase and more people attempt to underreport their income for tax purposes. 
D) More people decide to do their own lawn maintenance and give up using a professional service.

Question 16

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S.________ and the South Korean ________.

Accepted Answer

A) GDP; GDP 
B) GNP; GDP 
C) GDP; GNP 
D) GNP; GNP

Question 17

Table 8-31
 
-Refer to Table 8-31.The table above represents hypothetical data from the National Income Accounts for 2017.Use the data to calculate personal income and disposable income.

Accepted Answer

The answer of Table 8-31
 
-Refer to Table 8-31.The table...

Question 18

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

Accepted Answer

The answer of Use the formula for the GDP deflator...

Question 19

National income equals gross domestic product

Accepted Answer

A) plus sales taxes. 
B) plus government transfer payments. 
C) minus the consumption of fixed capital. 
D) minus government transfer payments.

Question 20

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Accepted Answer

A) greater than their values without these measurements. 
B) less than their values without these measurements. 
C) unchanged from their values without these measurements. 
D) meaningless,since GDP values without these measurements would no longer be of value.

Exam 8: GDP: Measuring Total Production and Income

Table 8-20 2016 2018 -Refer to Table 8-20.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018,using 2016 as the base year.Show your work.