Question 1

GDP minus the net income of foreigners is:

Accepted Answer

A)  personal income. 
B)  national income. 
C)  GNP. 
D)  net national income.

Question 2

If nominal GDP increased from $4,500 billion in 2010 to $5,000 billion in 2011 and the GDP deflator increased from 100 to 105 over the same time period,what would the 2011 real GDP equal expressed in terms of 2010 dollars?

Accepted Answer

A)  $4,285 billion 
B)  $4,500 billion 
C)  $4,725 billion 
D)  $4,762 billion

Question 3

Suppose that in 2011 nominal GDP increased and real GDP decreased relative to the year 2010.It can be concluded that:

Accepted Answer

A)  the economy experienced inflation and the total production of goods and services increased. 
B)  the economy experienced deflation and the total production of goods and services increased. 
C)  the economy experienced inflation and the total production of goods and services decreased. 
D)  the economy experienced deflation and the total production of goods and services decreased.

Question 4

Which of the following is not part of U.S.GDP?

Accepted Answer

A)  the value of a Toyota imported from Japan 
B)  the value of a Ford Mustang produced in the United States and sold in Canada 
C)  the salary of the governor of Minnesota 
D)  the value of a Rhode Island attorney's services

Question 5

If a nation's imports exceed its exports:

Accepted Answer

A)  net exports will be positive. 
B)  GDP will be less than the sum of consumption, investment, and government purchases. 
C)  GDP will be greater than the sum of consumption, investment, and government purchases. 
D)  none of the above apply.

Question 6

Estimates of the size of the underground economy in the U.S.range from:

Accepted Answer

A)  4 to 20 percent. 
B)  2 to 5 percent. 
C)  7 to 10 percent. 
D)  45 to 60 percent.

Question 7

Exhibit 19-1  Refer to Exhibit 19-1.The consumption (C)figure for the year in question is:

Accepted Answer

A)  $7,000 billion. 
B)  $6,300 billion. 
C)  $5,000 billion. 
D)  $5,700 billion.

Question 8

Government purchases,under the expenditure approach to GDP accounting,do not include:

Accepted Answer

A)  state government purchases of plumbing services. 
B)  Social Security benefit payments to retirees. 
C)  the salaries of military officers. 
D)  federal government purchases of computers.

Question 9

The GDP deflator:

Accepted Answer

A)  takes government purchases into account, unlike the CPI. 
B)  takes business investment purchases into account, unlike the CPI. 
C)  is generally used to adjust nominal GDP to calculate real GDP. 
D)  All of the above are true.

Question 10

National income includes wages and salaries,interest and rent,but not corporate profits.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not included in GDP?

Accepted Answer

A)  the fees for legal services rendered by your attorney 
B)  the replacement of brake pads on your six-year-old vehicle 
C)  cash income paid to a day laborer that is not reported to the tax authorities 
D)  the payments for a chiropractor's services

Question 12

The services rendered by a special agent with the Federal Bureau of Investigation is included in which expenditure category of GDP?

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  net exports

Question 13

If nominal GDP rises:

Accepted Answer

A)  we can be sure the price level has risen. 
B)  real GDP may rise or fall. 
C)  real GDP must rise. 
D)  real GDP must fall.

Question 14

GDP that has been adjusted for changes in the price level is called:

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  personal income. 
D)  net GDP.

Question 15

Exhibit 19-1  Refer to Exhibit 19-1.Net exports of goods and services (X-M)was approximately:

Accepted Answer

A)  -900 billion. 
B)  -450 billion. 
C)  1200 billion. 
D)  900 billion.

Question 16

Which of the following is not included in GDP calculations?

Accepted Answer

A)  the value of an accountant's services 
B)  the value of 500 shares of Microsoft stock sold to an investor 
C)  the value of high-definition television sets produced, but not sold, during the year 
D)  the value of a haircut

Question 17

The expenditure method of measuring GDP is calculated by adding up:

Accepted Answer

A)  the final goods and services produced domestically during a given period. 
B)  C + I + G + (X - M). 
C)  domestic production of final goods and services for consumers, firms, government, and the international sector (through net exports). 
D)  all of the above.

Question 18

Which of the following is not counted as a part of GDP?

Accepted Answer

A)  the purchase of a loaf of bread by a consumer 
B)  the unsold additions to inventory at a furniture store 
C)  the purchase of a snowplow by the city of Minneapolis 
D)  the purchase of 100 shares of Amazon.com stock by your grandmother

Question 19

The formula for calculating real GDP = (price index/nominal GDP)´ 100.

Accepted Answer