Question 1

Which of the following is the best measure for comparing the standard of living across countries?

Accepted Answer

A)  productivity 
B)  gross national product 
C)  real gross national product 
D)  real gross national product per person 
A)  productivity 
B)  gross national product 
C)  real gross national product 
D)  real gross national product per person

Question 2

Figure 6-1 shows the circular flow model where only consumption goods are being produced. Use the figure to answer questions .
Figure 6-1  
-Refer to Figure 6-1. The arrow marked "C" represents the flow of:

Accepted Answer

A)  factors of production. 
B)  factor incomes. 
C)  personal consumption expenditures. 
D)  consumer goods and services. 
A)  factors of production. 
B)  factor incomes. 
C)  personal consumption expenditures. 
D)  consumer goods and services.

Question 3

In each of the following cases, indicate if GDP is affected, under what category and what happens to GDP.
Ja. You buy a used textbook from one of your classmates.
Jb. You buy a new umbrella.
Jc. Ella, a French tourist, has a haircut in a salon in San Francisco.
Jd. New Orleans cleans up after a devastating hurricane.
Je. Avon Barksdale buys a shipment of cocaine from Colombia.
Jf. You pay a monthly rent to Mrs. Wong, your landlady.
Jg. Kiyah spends two hours baby-sitting her little brother.
Jh. You hire Bruce Tree Service to mow your lawn every week.
Ji. Jodi purchases her first home, a 1980s fixer-upper.
Jj. The president of Ohio State University is given a salary increase.

Accepted Answer

Ja. You buy a used textbook from one of

Question 4

Government purchases include transfer payments.

Accepted Answer

A) True 
 B)False

Question 5

Economic data adjusted for price level changes are said to be expressed in terms of current dollars.

Accepted Answer

A) True 
 B)False

Question 6

Let C = consumption, I = private investment, G = government purchases, and Xn = net exports. Which of the following best represents the equation for GDP?

Accepted Answer

A)  GDP = C+ I + G − Xn 
B)  GDP = C + I + G + Xn 
C)  GDP = C + I + G + net imports 
D)  GDP = C + I + G + tax revenues + Xn 
A)  GDP = C+ I + G − Xn 
B)  GDP = C + I + G + Xn 
C)  GDP = C + I + G + net imports 
D)  GDP = C + I + G + tax revenues + Xn

Question 7

An increase in real GDP from 2002 to 2006 necessarily indicates that

Accepted Answer

A)  people are better off in 2002 than they were in 2006. 
B)  depreciation was lower in 2002 than it is in 2006. 
C)  prices increased between 2002 and 2006. 
D)  quantities of goods and services produced increased between 2002 and 2006. 
A)  people are better off in 2002 than they were in 2006. 
B)  depreciation was lower in 2002 than it is in 2006. 
C)  prices increased between 2002 and 2006. 
D)  quantities of goods and services produced increased between 2002 and 2006.

Question 8

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2  
-Refer to Figure 6-2. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

Accepted Answer

A)  personal consumption expenditures and the flow is represented by 1. 
B)  personal consumption expenditures and the flow is represented by 5. 
C)  private investment expenditure and the flow is represented by 1. 
D)  private investment expenditure and the flow is represented by 5. 
A)  personal consumption expenditures and the flow is represented by 1. 
B)  personal consumption expenditures and the flow is represented by 5. 
C)  private investment expenditure and the flow is represented by 1. 
D)  private investment expenditure and the flow is represented by 5.

Question 9

A Japanese worker, working in the U.S., deposits some money in his bank account, and his son collects the money from a branch of the same bank in Japan. This activity reduces the U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 10

The components of gross domestic income include:

Accepted Answer

A)  employee compensation, profits, transfer payments, and net interest. 
B)  employee compensation, profits, rental income, and net interest. 
C)  wages and salaries, interest income, gross private investment, and depreciation. 
D)  wages and salaries, interest income, transfer payments, and indirect business taxes. 
A)  employee compensation, profits, transfer payments, and net interest. 
B)  employee compensation, profits, rental income, and net interest. 
C)  wages and salaries, interest income, gross private investment, and depreciation. 
D)  wages and salaries, interest income, transfer payments, and indirect business taxes.

Question 11

A country's exports minus its imports measures:

Accepted Answer

A)  net exports. 
B)  gross exports. 
C)  net imports. 
D)  gross imports. 
A)  net exports. 
B)  gross exports. 
C)  net imports. 
D)  gross imports.

Question 12

A measure of the degree to which capital wears out or becomes obsolete during a period is:

Accepted Answer

A)  rent. 
B)  production costs. 
C)  deferred expenditure. 
D)  depreciation. 
A)  rent. 
B)  production costs. 
C)  deferred expenditure. 
D)  depreciation.

Question 13

The purchases of U.S. products by the citizens of Mexico are:

Accepted Answer

A)  counted as U.S. exports. 
B)  counted as U.S. imports. 
C)  considered Mexico's exports. 
D)  considered as an income transfer from the U.S. to Mexico. 
A)  counted as U.S. exports. 
B)  counted as U.S. imports. 
C)  considered Mexico's exports. 
D)  considered as an income transfer from the U.S. to Mexico.

Question 14

Which of the following items would NOT be a part of private investment in the computation of GDP?

Accepted Answer

A)  A new factory building 
B)  New factory equipment 
C)  A rise in inventory levels at a firm 
D)  An old shopping center acquired by a firm 
A)  A new factory building 
B)  New factory equipment 
C)  A rise in inventory levels at a firm 
D)  An old shopping center acquired by a firm

Question 15

Disposable personal income is calculated as personal income:

Accepted Answer

A)  adjusted for inflation. 
B)  minus depreciation. 
C)  minus taxes. 
D)  plus transfer payments. 
A)  adjusted for inflation. 
B)  minus depreciation. 
C)  minus taxes. 
D)  plus transfer payments.

Question 16

The largest expenditure category in U.S. GDP in 2011 was:

Accepted Answer

A)  government purchases. 
B)  personal consumption. 
C)  net exports. 
D)  gross private domestic investment. 
A)  government purchases. 
B)  personal consumption. 
C)  net exports. 
D)  gross private domestic investment.

Question 17

Double counting occurs when both intermediate and final goods are included in the GDP.

Accepted Answer

A) True 
 B)False

Question 18

If a farmer grows crops and keeps that for domestic consumption, then the value of the produced is included in the GDP of the economy.

Accepted Answer

A) True 
 B)False

Question 19

Table 6.2 shows data on the components of GDP in an economy. Use the table to answer questions .
Table 6-2
  
-Refer to Table 6-2. What is the value of exports?

Accepted Answer

A)  $130 billion 
B)  -$130 billion 
C)  $230 billion 
D)  -$230 billion 
A)  $130 billion 
B)  -$130 billion 
C)  $230 billion 
D)  -$230 billion

Question 20

Table 6-3 shows data relating to the stages of production of toy model airplanes.
Table 6-3
  
-Refer to Table 6-3. The total sales value of all transactions involved in the production of a model airplane is _____.

Accepted Answer

A)  $5 
B)  $21 
C)  $56 
D)  $77 
A)  $5 
B)  $21 
C)  $56 
D)  $77

Which of the following is the best measure for comparing the standard of living across countries?

Figure 6-1 shows the circular flow model where only consumption goods are being produced. Use the figure to answer questions . Figure 6-1 -Refer to Figure 6-1. The arrow marked "C" represents the flow of:

Government purchases include transfer payments.

Economic data adjusted for price level changes are said to be expressed in terms of current dollars.

Let C = consumption, I = private investment, G = government purchases, and X_n= net exports. Which of the following best represents the equation for GDP?

An increase in real GDP from 2002 to 2006 necessarily indicates that

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions . Figure 6-2 -Refer to Figure 6-2. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

A Japanese worker, working in the U.S., deposits some money in his bank account, and his son collects the money from a branch of the same bank in Japan. This activity reduces the U.S. GDP.

The components of gross domestic income include:

A country's exports minus its imports measures:

A measure of the degree to which capital wears out or becomes obsolete during a period is:

The purchases of U.S. products by the citizens of Mexico are:

Which of the following items would NOT be a part of private investment in the computation of GDP?

Disposable personal income is calculated as personal income:

The largest expenditure category in U.S. GDP in 2011 was:

Double counting occurs when both intermediate and final goods are included in the GDP.

If a farmer grows crops and keeps that for domestic consumption, then the value of the produced is included in the GDP of the economy.

Table 6.2 shows data on the components of GDP in an economy. Use the table to answer questions . Table 6-2 -Refer to Table 6-2. What is the value of exports?

Table 6-3 shows data relating to the stages of production of toy model airplanes. Table 6-3 -Refer to Table 6-3. The total sales value of all transactions involved in the production of a model airplane is _____.

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters

Exam 6: Measuring Total Output and Income

Which of the following is the best measure for comparing the standard of living across countries?

Figure 6-1 shows the circular flow model where only consumption goods are being produced. Use the figure to answer questions . Figure 6-1 -Refer to Figure 6-1. The arrow marked "C" represents the flow of:

Government purchases include transfer payments.

Economic data adjusted for price level changes are said to be expressed in terms of current dollars.

Let C = consumption, I = private investment, G = government purchases, and Xn = net exports. Which of the following best represents the equation for GDP?

An increase in real GDP from 2002 to 2006 necessarily indicates that

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions . Figure 6-2 -Refer to Figure 6-2. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

A Japanese worker, working in the U.S., deposits some money in his bank account, and his son collects the money from a branch of the same bank in Japan. This activity reduces the U.S. GDP.

The components of gross domestic income include:

A country's exports minus its imports measures:

A measure of the degree to which capital wears out or becomes obsolete during a period is:

The purchases of U.S. products by the citizens of Mexico are:

Which of the following items would NOT be a part of private investment in the computation of GDP?

Disposable personal income is calculated as personal income:

The largest expenditure category in U.S. GDP in 2011 was:

Double counting occurs when both intermediate and final goods are included in the GDP.

If a farmer grows crops and keeps that for domestic consumption, then the value of the produced is included in the GDP of the economy.

Table 6.2 shows data on the components of GDP in an economy. Use the table to answer questions . Table 6-2 -Refer to Table 6-2. What is the value of exports?

Table 6-3 shows data relating to the stages of production of toy model airplanes. Table 6-3 -Refer to Table 6-3. The total sales value of all transactions involved in the production of a model airplane is _____.

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters

Let C = consumption, I = private investment, G = government purchases, and X_n= net exports. Which of the following best represents the equation for GDP?