Question 1

According to the circular-flow diagram, GDP

Accepted Answer

A)   can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
B)   can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
C)   can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.
D)   can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.E) All of the above
F) None of the above

Question 2

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.
 
-Refer to Table 23-6. In 2010, this country's nominal GDP was

Accepted Answer

A)   $260.
B)   $440.
C)   $620.
D)   $760.E) None of the above
F) B) and D)

Question 3

Table 23-2
The table below contains data for country A for the year 2010.
 
-Refer to Table 23-2. What were country A's government purchases in 2010?

Accepted Answer

A)   $553
B)   $1198
C)   $1975
D)   $2752E) A) and C)
F) A) and D)

Question 4

Changes in inventory are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 5

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 6

onsumer goods that are produced, go into inventory, and are not sold during the current period are

Accepted Answer

A)   counted as intermediate goods and so are not included in current period GDP.
B)   counted in current period GDP only if the firm that produced them sells them to another firm.
C)   included in current period GDP as inventory investment.
D)   included in current period GDP as consumption.E) A) and D)
F) None of the above

Question 7

The U.S. buys $500 billion of goods and $250 billion of services from foreign countries. Foreign countries buy $250 billion of goods and $300 billion of services from the U.S. What is net exports?

Accepted Answer

The answer of The U.S. buys $500 billion of goods...

Question 8

If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

Accepted Answer

A) True 
 B)False

Question 9

U.S. GDP was almost $14 billion in 2009.

Accepted Answer

A) True 
 B)False

Question 10

A recession is always associated with

Accepted Answer

A)   the end of a war.
B)   slowly growing real GDP.
C)   rising inflation.
D)   declining real GDP.E) A) and B)
F) A) and C)

Question 11

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Accepted Answer

A)   The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.
B)   The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
C)   The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
D)   The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.E) B) and C)
F) A) and C)

Question 12

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)   the quality of these items is not high enough to contribute value to GDP.
B)   measuring them is so difficult.
C)   the government wants to discourage the production and consumption of these items.
D)   these items are not reported on income tax forms.E) C) and D)
F) B) and C)

Question 13

In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

Accepted Answer

The answer of In 2011 a country had a real...

Question 14

U.S. GNP

Accepted Answer

A)   includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign countries.
B)   includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in foreign countries.
C)   excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries.
D)   excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign countries.E) A) and C)
F) All of the above

Question 15

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

Accepted Answer

A)   nominal GDP.
B)   real GDP.
C)   the GDP deflator.
D)   GNP.E) B) and C)
F) A) and D)

Question 16

Table 23-2
The table below contains data for country A for the year 2010.
 
-Refer to Table 23-2. What was country A's investment in 2010?

Accepted Answer

A)   $1178
B)   $1295
C)   $1882
D)   $1999E) A) and B)
F) A) and C)

Question 17

If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175, then the inflation rate in 2010 was 25%.

Accepted Answer

A) True 
 B)False

Question 18

In a simple circular-flow diagram, firms

Accepted Answer

A)   purchase resources from households.
B)   purchase the output produced by households.
C)   receive income by selling resources to households.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

The government's purchases of goods but not its purchases of services are included in GDP.

Accepted Answer

A) True 
 B)False

Question 20

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)   consumption of durable goods
B)   consumption of nondurable goods
C)   consumption of services
D)   investmentE) All of the above
F) B) and C)

Exam 5: Measuring a Nations Income

onsumer goods that are produced, go into inventory, and are not sold during the current period are

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The U.S. buys $500 billion of goods and $250 billion of services from foreign countries. Foreign countries buy $250 billion of goods and $300 billion of services from the U.S. What is net exports?

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Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's investment in 2010?

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According to the circular-flow diagram, GDP

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GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

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If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175, then the inflation rate in 2010 was 25%.

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Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What were country A's government purchases in 2010?

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When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

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The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

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Household spending on education is counted in which component or subcomponent of GDP?

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A recession is always associated with

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Changes in inventory are included in the investment component of GDP.

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U.S. GNP

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U.S. GDP was almost $14 billion in 2009.

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Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

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In a simple circular-flow diagram, firms

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Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2010, this country's nominal GDP was

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If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

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In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

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The government's purchases of goods but not its purchases of services are included in GDP.

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