Question 1

According to the national spending approach, which of the following is counted in investment?

Accepted Answer

A)   A restaurant buys a new wood-fired oven for baking pizzas.
B)   A college graduate buys a new car after graduation.
C)   A student pays for tuition at a university.
D)   A retiree buys newly issued U.S. government bondsE) A) and B)
F) A) and C)

Question 2

Use the following to answer questions: Table: Wheat and Corn   Year  Price of Wheat  (per bushel)   Quantity of Wheat  (million bushels)   Price of Corn  (per bushel)   Quantity of Corn  (million tons)  2005$561,250$449402006641,360521,0502007721,420551,1202008801,500621,260\begin{array} { l c c c c } \hline 	ext { Year } & \begin{array} { l } 	ext { Price of Wheat } \	ext { (per bushel)  }\end{array} & \begin{array} { l } 	ext { Quantity of Wheat } \	ext { (million bushels)  }\end{array} & \begin{array} { l } 	ext { Price of Corn } \	ext { (per bushel)  }\end{array} & \begin{array} { l } 	ext { Quantity of Corn } \	ext { (million tons)  }\end{array} \\hline 2005 & \$ 56 & 1,250 & \$ 44 & 940 \2006 & 64 & 1,360 & 52 & 1,050 \2007 & 72 & 1,420 & 55 & 1,120 \2008 & 80 & 1,500 & 62 & 1,260 \\hline\end{array} Year 2005200620072008​ Price of Wheat  (per bushel)  ​$56647280​ Quantity of Wheat  (million bushels)  ​1,2501,3601,4201,500​ Price of Corn  (per bushel)  ​$44525562​ Quantity of Corn  (million tons)  ​9401,0501,1201,260​​ 
-(Table: Wheat and Corn)  Consider a country that produces only wheat and corn. Based on the data in the table, the country's nominal GDP for year 2008 is:

Accepted Answer

A)   $111,360 million.
B)   $141,640 million.
C)   $163,840 million.
D)   $198,120 million. E) A) and C)
F) A) and B)

Question 3

A large part of what government does is transfer money from one citizen to another citizen.

Accepted Answer

A) True 
 B)False

Question 4

In 2010, real GDP was $13.2 trillion and the GDP deflator was 110.6. What was nominal GDP for that year?

Accepted Answer

A)   $14.6 trillion
B)   $14.3 trillion
C)   $12.1 trillion
D)   $11.9 trillionE) A) and B)
F) None of the above

Question 5

Orrin mines iron ore, which he sells to Thorin, who turns iron ore into steel. The steel is sold to Gorin, who turns the steel into battle axes. The battle axes are sold by a merchant in the city to adventurers. Which of the following would be considered a final good?

Accepted Answer

A)   the iron ore
B)   the steel
C)   the battle axes sold to the merchant
D)   the battle axes sold to the adventurersE) None of the above
F) C) and D)

Question 6

Which of the following is counted as part of GDP?

Accepted Answer

A)   The government sends a social security check to a retiree.
B)   Bob mows his lawn.
C)   Helen takes a day off to clean her house.
D)   A state government hires workers to repave the streets.E) B) and C)
F) A) and D)

Question 7

Social Security benefits paid to current retirees is an example of a transfer payment that would NOT be included in GDP.

Accepted Answer

A) True 
 B)False

Question 8

Which statement is NOT true about net exports?

Accepted Answer

A)   Net exports will be negative if imports exceed exports.
B)   Spending on imports in the United States cannot contribute to the GDP of other nations.
C)   Spending on imports in the United States contributes to U.S. GDP.
D)   Foreign spending on U.S. exports contributes to U.S. GDP.E) A) and B)
F) C) and D)

Question 9

How often is GDP reported for the U.S. economy?

Accepted Answer

A)   weekly
B)   monthly
C)   quarterly
D)   annuallyE) A) and D)
F) C) and D)

Question 10

Which of the following would most likely NOT be counted in GDP?

Accepted Answer

A)   The legal sale of marijuana for medical purposes in the State of California.
B)   You build a shed in your back yard to store your lawn mower.
C)   An outside company is hired to clean up a chemical spill at a local factory.
D)   The fee you pay to snorkel with manatees while on vacation in Florida.E) C) and D)
F) A) and D)

Question 11

An increase in the price you pay for a haircut will:

Accepted Answer

A)   contribute to GDP as a purchase of a good.
B)   contribute to GDP as a purchase of a service.
C)   not contribute to GDP.
D)   contribute to GDP only if your hair stylist is a U.S. citizen.E) B) and C)
F) A) and B)

Question 12

Real GDP per capita is the measure of a country's standard of living preferred by most economists.

Accepted Answer

A) True 
 B)False

Question 13

Real GDP is calculated using the same prices in all years.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following represents the factor income approach to splitting GDP?

Accepted Answer

A)   GDP = wages + profit.
B)   GDP = wages + rent + interest.
C)   GDP = wages + rent + profit.
D)   GDP = wages + rent + interest + profit.E) A) and B)
F) A) and C)

Question 15

Which of the following would NOT be included in the calculation of GDP as a government purchase?

Accepted Answer

A)   military payrolls
B)   distribution of food stamps
C)   purchase of 100 new C-5A aircraft
D)   hiring 1,000 workers to build a new interstate roadwayE) B) and C)
F) A) and D)

Question 16

Business cycles are fluctuations of real GDP around its long-term trend.

Accepted Answer

A) True 
 B)False

Question 17

GDP measures the total production in a country.

Accepted Answer

A) True 
 B)False

Question 18

A recession is a significant, widespread decline in real income and employment.

Accepted Answer

A) True 
 B)False

Question 19

Which of these goods is a final good that would be counted in GDP in the year it is produced?

Accepted Answer

A)   tomatoes used by an Italian restaurant
B)   wood used for making furniture
C)   an oven for installation in a bakery
D)   a computer chip used in a laptop computerE) B) and D)
F) A) and B)

Question 20

Which of the following is a final good and should be included in GDP?

Accepted Answer

A)   antivirus software preloaded on computers
B)   computer chips
C)   notebook computers
D)   power cords packaged with new computersE) A) and B)
F) B) and C)

Exam 6: GDP and the Measurement of Progress

Social Security benefits paid to current retirees is an example of a transfer payment that would NOT be included in GDP.

Correct Answer
verified

Which of the following would NOT be included in the calculation of GDP as a government purchase?

Correct Answer
verified

In 2010, real GDP was $13.2 trillion and the GDP deflator was 110.6. What was nominal GDP for that year?

Correct Answer
verified

Which of the following represents the factor income approach to splitting GDP?

Correct Answer
verified

How often is GDP reported for the U.S. economy?

Correct Answer
verified

Real GDP per capita is the measure of a country's standard of living preferred by most economists.

Correct Answer
verified

GDP measures the total production in a country.

Correct Answer
verified

Real GDP is calculated using the same prices in all years.

Correct Answer
verified

Orrin mines iron ore, which he sells to Thorin, who turns iron ore into steel. The steel is sold to Gorin, who turns the steel into battle axes. The battle axes are sold by a merchant in the city to adventurers. Which of the following would be considered a final good?

Correct Answer
verified

Which of these goods is a final good that would be counted in GDP in the year it is produced?

Correct Answer
verified

A large part of what government does is transfer money from one citizen to another citizen.

Correct Answer
verified

According to the national spending approach, which of the following is counted in investment?

Correct Answer
verified

Which statement is NOT true about net exports?

Correct Answer
verified

Correct Answer
verified

A recession is a significant, widespread decline in real income and employment.

Correct Answer
verified

Which of the following is counted as part of GDP?

Correct Answer
verified

Which of the following would most likely NOT be counted in GDP?

Correct Answer
verified

An increase in the price you pay for a haircut will:

Correct Answer
verified

Business cycles are fluctuations of real GDP around its long-term trend.

Correct Answer
verified

Which of the following is a final good and should be included in GDP?

Correct Answer
verified

Exam 6: GDP and the Measurement of Progress

Social Security benefits paid to current retirees is an example of a transfer payment that would NOT be included in GDP.

Correct AnswerverifiedShow Answer

Which of the following would NOT be included in the calculation of GDP as a government purchase?

Correct AnswerverifiedShow Answer

In 2010, real GDP was $13.2 trillion and the GDP deflator was 110.6. What was nominal GDP for that year?

Correct AnswerverifiedShow Answer

Which of the following represents the factor income approach to splitting GDP?

Correct AnswerverifiedShow Answer

How often is GDP reported for the U.S. economy?

Correct AnswerverifiedShow Answer

Real GDP per capita is the measure of a country's standard of living preferred by most economists.

Correct AnswerverifiedShow Answer

GDP measures the total production in a country.

Correct AnswerverifiedShow Answer

Real GDP is calculated using the same prices in all years.

Correct AnswerverifiedShow Answer

Orrin mines iron ore, which he sells to Thorin, who turns iron ore into steel. The steel is sold to Gorin, who turns the steel into battle axes. The battle axes are sold by a merchant in the city to adventurers. Which of the following would be considered a final good?

Correct AnswerverifiedShow Answer

Which of these goods is a final good that would be counted in GDP in the year it is produced?

Correct AnswerverifiedShow Answer

A large part of what government does is transfer money from one citizen to another citizen.

Correct AnswerverifiedShow Answer

According to the national spending approach, which of the following is counted in investment?

Correct AnswerverifiedShow Answer

Which statement is NOT true about net exports?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A recession is a significant, widespread decline in real income and employment.

Correct AnswerverifiedShow Answer

Which of the following is counted as part of GDP?

Correct AnswerverifiedShow Answer

Which of the following would most likely NOT be counted in GDP?

Correct AnswerverifiedShow Answer

An increase in the price you pay for a haircut will:

Correct AnswerverifiedShow Answer

Business cycles are fluctuations of real GDP around its long-term trend.

Correct AnswerverifiedShow Answer

Which of the following is a final good and should be included in GDP?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified