Question 1

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Accepted Answer

A) True 
 B)False

Question 2

In the economy of Wrexington in 2008,exports were $500,GDP was $6400,government purchases were $1500,imports were $600,and investment was $2000.What was Wrexington's consumption in 2008?

Accepted Answer

A)   $1800
B)   $2800
C)   $3000
D)   $4000E) A) and B)
F) A) and C)

Question 3

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are not measured as part of GDP.It follows that

Accepted Answer

A)   GDP is not a useful measure of society's welfare.
B)   GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government.
C)   GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.
D)   GDP is still the best measure of society's welfare because these other values cannot actually be measured.E) B) and C)
F) None of the above

Question 4

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Accepted Answer

GDP excludes some products because they ...

Question 5

In the national income accounts,depreciation is called

Accepted Answer

A)   "consumption of fixed capital."
B)   "negative investment."
C)   "capital taxation."
D)   "loss due to wear."E) A) and B)
F) A) and C)

Question 6

If real GDP doubles and the GDP deflator doubles,then nominal GDP

Accepted Answer

A)   remains constant.
B)   doubles.
C)   triples.
D)   quadruples.E) A) and B)
F) All of the above

Question 7

Grapes are

Accepted Answer

A)   always counted as an intermediate good.
B)   counted as an intermediate good only if they are used to produce another good,such as wine.
C)   counted as an intermediate good only if they are consumed.
D)   counted as an intermediate good,whether they are used to produce another good or consumed.E) B) and D)
F) B) and C)

Question 8

In the economy of Wrexington in 2008,consumption was $800,GDP was $2000,government purchases were $400,and investment was $600.What were Wrexington's net exports in 2008?

Accepted Answer

A)   -$200
B)   $200
C)   $1800
D)   Net exports cannot be calculated from the information given.E) B) and C)
F) A) and C)

Question 9

In 2004,the level of U.S.real GDP was close to four times its 1965 level.

Accepted Answer

A) True 
 B)False

Question 10

Suppose the government reports that U.S.GDP was about $13 trillion dollars in the most recent quarter.What is the correct interpretation of this number?

Accepted Answer

A)   This number reflects the actual value of final goods and services produced in that quarter.
B)   This number was obtained by taking the actual value of final goods and services produced in that quarter,then seasonally adjusting that value.
C)   This number was obtained by taking the actual value of final goods and services produced in that quarter,then multiplying that value by 4.
D)   This number was obtained by taking the actual value of final goods and services produced in that quarter,then seasonally adjusting that value and multiplying it by 4.E) A) and B)
F) None of the above

Question 11

Gina,a U.S.citizen,works only in Germany.The value of Gina's production is included in

Accepted Answer

A)   U.S.GDP and German GDP.
B)   U.S.GDP and German GNP.
C)   U.S.GNP and German GDP.
D)   U.S.GNP and German GNP.E) A) and B)
F) A) and C)

Question 12

If nominal GDP is $10 trillion and real GDP is $8 trillion,then the GDP deflator is

Accepted Answer

A)   80,and this indicates that the price level has decreased by 20 percent since the base year.
B)   80,and this indicates that the price level has increased by 80 percent since the base year.
C)   125,and this indicates that the price level has increased by 25 percent since the base year.
D)   125,and this indicates that the price level has increased by 125 percent since the base year.E) None of the above
F) B) and C)

Question 13

The goal of macroeconomics is to explain the economic changes that affect many households,firms,and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following items is included in U.S.GDP?

Accepted Answer

A)   goods produced by foreign citizens working in the United States
B)   the difference in the price of the sale of an existing home and its original purchase price
C)   known illegal activities
D)   None of the above is included in U.S.GDP.E) A) and C)
F) B) and C)

Question 15

In 2007,GDP per person in the United States was almost

Accepted Answer

A)   $10,000.
B)   $14,000.
C)   $32,000.
D)   $46,000.E) None of the above
F) All of the above

Question 16

In the nation of Paolaland,quarterly GDP is always higher in the second quarter than in other quarters.In order to account systematically for this predictable second-quarter jump in GDP,Paolaland's government statisticians will

Accepted Answer

A)   employ a statistical procedure called seasonal adjustment.
B)   report a four-quarter moving average of GDP rather than the one-quarter figure.
C)   report GNP rather than GDP.
D)   report personal income rather than GDP.E) A) and D)
F) All of the above

Question 17

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
 
-Refer to Table 23-5.In 2007,Batterland's GDP deflator was

Accepted Answer

A)   66.7.
B)   100
C)   129.6.
D)   150E) A) and B)
F) None of the above

Question 18

Table 23-1
The table below contains data for the country of Wrexington for the year 2006.
 
-Refer to Table 23-1.The market value of all final goods and services produced within Wrexington in 2006 is

Accepted Answer

A)   $100.
B)   $110.
C)   $115.
D)   $130.E) All of the above
F) A) and D)

Question 19

Gross domestic product includes all

Accepted Answer

A)   legal and illegal goods,but it excludes all legal and illegal services.
B)   legal and illegal goods and all legal and illegal services.
C)   legal goods and services,but it excludes illegal goods and services.
D)   legal and illegal goods and legal services,but it excludes illegal services.E) A) and D)
F) B) and C)

Question 20

Suppose an apartment complex converts to a condominium,so that the former renters are now owners of their housing units.Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid.What happens to GDP as a result of this conversion?

Accepted Answer

A)   GDP necessarily increases.
B)   GDP necessarily decreases.
C)   GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.
D)   GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of housing services.E) All of the above
F) B) and D)

Exam 23: Measuring a Nations Income

In the national income accounts,depreciation is called

Correct Answer
verified

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.The market value of all final goods and services produced within Wrexington in 2006 is

Correct Answer
verified

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are not measured as part of GDP.It follows that

Correct Answer
verified

In the economy of Wrexington in 2008,exports were $500,GDP was $6400,government purchases were $1500,imports were $600,and investment was $2000.What was Wrexington's consumption in 2008?

Correct Answer
verified

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2007,Batterland's GDP deflator was

Correct Answer
verified

Suppose the government reports that U.S.GDP was about $13 trillion dollars in the most recent quarter.What is the correct interpretation of this number?

Correct Answer
verified

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Correct Answer
verified
GDP excludes some products because they ...
View Answer

Which of the following items is included in U.S.GDP?

Correct Answer
verified

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Correct Answer
verified

Gross domestic product includes all

Correct Answer
verified

Grapes are

Correct Answer
verified

The goal of macroeconomics is to explain the economic changes that affect many households,firms,and markets simultaneously.

Correct Answer
verified

In 2007,GDP per person in the United States was almost

Correct Answer
verified

In the nation of Paolaland,quarterly GDP is always higher in the second quarter than in other quarters.In order to account systematically for this predictable second-quarter jump in GDP,Paolaland's government statisticians will

Correct Answer
verified

If nominal GDP is $10 trillion and real GDP is $8 trillion,then the GDP deflator is

Correct Answer
verified

In 2004,the level of U.S.real GDP was close to four times its 1965 level.

Correct Answer
verified

Gina,a U.S.citizen,works only in Germany.The value of Gina's production is included in

Correct Answer
verified

Correct Answer
verified

If real GDP doubles and the GDP deflator doubles,then nominal GDP

Correct Answer
verified

In the economy of Wrexington in 2008,consumption was $800,GDP was $2000,government purchases were $400,and investment was $600.What were Wrexington's net exports in 2008?

Correct Answer
verified

Exam 23: Measuring a Nations Income

In the national income accounts,depreciation is called

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.The market value of all final goods and services produced within Wrexington in 2006 is

Correct AnswerverifiedShow Answer

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are not measured as part of GDP.It follows that

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,exports were $500,GDP was $6400,government purchases were $1500,imports were $600,and investment was $2000.What was Wrexington's consumption in 2008?

Correct AnswerverifiedShow Answer

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2007,Batterland's GDP deflator was

Correct AnswerverifiedShow Answer

Suppose the government reports that U.S.GDP was about $13 trillion dollars in the most recent quarter.What is the correct interpretation of this number?

Correct AnswerverifiedShow Answer

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Correct AnswerverifiedGDP excludes some products because they ...View AnswerShow Answer

Which of the following items is included in U.S.GDP?

Correct AnswerverifiedShow Answer

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Correct AnswerverifiedShow Answer

Gross domestic product includes all

Correct AnswerverifiedShow Answer

Grapes are

Correct AnswerverifiedShow Answer

The goal of macroeconomics is to explain the economic changes that affect many households,firms,and markets simultaneously.

Correct AnswerverifiedShow Answer

In 2007,GDP per person in the United States was almost

Correct AnswerverifiedShow Answer

In the nation of Paolaland,quarterly GDP is always higher in the second quarter than in other quarters.In order to account systematically for this predictable second-quarter jump in GDP,Paolaland's government statisticians will

Correct AnswerverifiedShow Answer

If nominal GDP is $10 trillion and real GDP is $8 trillion,then the GDP deflator is

Correct AnswerverifiedShow Answer

In 2004,the level of U.S.real GDP was close to four times its 1965 level.

Correct AnswerverifiedShow Answer

Gina,a U.S.citizen,works only in Germany.The value of Gina's production is included in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If real GDP doubles and the GDP deflator doubles,then nominal GDP

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $800,GDP was $2000,government purchases were $400,and investment was $600.What were Wrexington's net exports in 2008?

Correct AnswerverifiedShow Answer

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GDP excludes some products because they ...
View Answer

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