Question 1

The formula from the expenditure method indicates that GDP is equal to:

Accepted Answer

A)  C + I - G - X - M 
B)  C + I - G + X - M 
C)  C + I + G + X - M 
D)  C + I + G + M - X

Question 2

What is the measure of the income received by owners of resources used in making final goods and services?

Accepted Answer

A)  factor payments 
B)  product payments 
C)  indirect earnings 
D)  direct earnings

Question 3

Which of the following is included in the investment category under the expenditure approach to GDP accounting?

Accepted Answer

A)  stocks 
B)  bonds 
C)  durable goods 
D)  additions to business inventories

Question 4

If nominal GDP increased from $5,000 billion in 2010 to $5,500 billion in 2011 and the GDP deflator increased from 130 to 140 over the same time period,what would the 2011 real GDP equal expressed in terms of 2010 dollars?

Accepted Answer

A)  $4,643 billion 
B)  $5,107 billion 
C)  $5,385 billion 
D)  $5,500 billion

Question 5

In 2011,U.S.GDP totaled approximately:

Accepted Answer

A)  $2.1 trillion 
B)  $2.8 trillion 
C)  $10.7 trillion 
D)  $15.0 trillion

Question 6

U.S.nominal GDP:

Accepted Answer

A)  has historically increased more slowly than real GDP. 
B)  has historically increased more rapidly than real GDP. 
C)  includes an estimate of the value of leisure time. 
D)  includes an estimate of underground productive activity.

Question 7

Which of the following is included in the calculated gross domestic product?

Accepted Answer

A)  Mr. Kelly buys a used lawn mower from his neighbor Mr. Templeton. 
B)  A local ice cream store sells $17,000 worth of cones and sundaes on July 4th. 
C)  Suzanne buys a love seat and chair for $85 at the yard sale on the corner. 
D)  Farmer Fred sells his second tractor to his son.

Question 8

When you buy a pickup truck to use at home,it is included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  a pair of jeans sold by a clothing retailer 
B)  cloth sold to a suit manufacturer 
C)  a share of Wal-Mart stock 
D)  a used Ford Mustang sold from one neighbor to another

Question 10

Real GDP per capita increases if the population grows at a rate faster than real GDP.

Accepted Answer

A) True 
 B)False

Question 11

If real GDP increased by 2% and nominal GDP increased by 4%,then output:

Accepted Answer

A)  increased and the price level increased. 
B)  increased and the price level decreased. 
C)  decreased and the price level increased. 
D)  decreased and the price level decreased.

Question 12

Final goods or services used to compute GDP refer to:

Accepted Answer

A)  the sum of all wages paid to laborers. 
B)  the factors of production used to produce output. 
C)  goods and services purchased by the ultimate users. 
D)  the value of outstanding shares of stock of manufacturing firms.

Question 13

Exhibit 19-1  Refer to Exhibit 19-1.Investments (I)for the year in question is:

Accepted Answer

A)  $2,000 billion. 
B)  $4,000 billion. 
C)  $200 billion. 
D)  $1,800 billion.

Question 14

Net exports are a ____ proportion of GDP and have recently been ____ for the United States.

Accepted Answer

A)  small; positive. 
B)  small; negative. 
C)  large; positive 
D)  large; negative.

Question 15

The total dollar value of purchases in the economy is far larger than GDP primarily because:

Accepted Answer

A)  GDP ignores taxes. 
B)  GDP excludes the value of intermediate goods exchanged. 
C)  GDP excludes the output from foreigners working in America. 
D)  GDP ignores production in the home

Question 16

GDP is:

Accepted Answer

A)  the value of all final goods and services produced domestically within a given period of time. 
B)  the value of all final good and services produced anywhere in the world by a nation's firms within a given period of time. 
C)  the value of all final goods and services produced by a government within a given period of time. 
D)  the sum of all currency and coins in circulation.

Question 17

Gross national product is equal to:

Accepted Answer

A)  gross domestic product. 
B)  net national product plus depreciation. 
C)  national income plus net personal income. 
D)  none of the above

Question 18

In some rural regions of the United States,residents harvest much of their food supplies directly from nature by hunting,fishing,and gathering.With regard to these subsistence activities:

Accepted Answer

A)  GDP will overestimate the true value of the nation's production of final goods and services. 
B)  GDP will underestimate the true value of the nation's production of final goods and services only when the income approach is used. 
C)  GDP will correctly estimate the true value of the nation's production of final goods and services. 
D)  GDP will underestimate the true value of the nation's production of final goods and services.

Question 19

Real GDP is:

Accepted Answer

A)  the base year market value of all final goods and services produced domestically during a given period. 
B)  the current year market value of all final goods and services produced domestically during a given period. 
C)  usually greater than nominal GDP. 
D)  the current year market value of domestic production of intermediate goods.

Question 20

The net national product (NNP)can be obtained from the GDP by:

Accepted Answer

A)  subtracting depreciation. 
B)  subtracting net income of foreigners and depreciation. 
C)  including the net income of foreigners. 
D)  subtracting depreciation and indirect business taxes.

Exam 19: Measuring Economic Performance