Question 1

Legalizing all forms of illegal activities would

Accepted Answer

A)  reduce measured GDP. 
B)  reduce the size of the underground economy and increase measured GDP. 
C)  reduce both the underground economy and measured GDP. 
D)  increase the size of the underground economy and reduce measured GDP. 
A)  reduce measured GDP. 
B)  reduce the size of the underground economy and increase measured GDP. 
C)  reduce both the underground economy and measured GDP. 
D)  increase the size of the underground economy and reduce measured GDP.

Question 2

All used goods are considered nondurable goods.

Accepted Answer

A) True 
 B)False

Question 3

Refer to the information provided in Table 21.2 below to answer the question(s) that follow.
Table 21.2  
-Refer to Table 21.2. The value for gross domestic product in billions of dollars is

Accepted Answer

A)  2,900. 
B)  3,140. 
C)  3,440. 
D)  3,650. 
A)  2,900. 
B)  3,140. 
C)  3,440. 
D)  3,650.

Question 4

The change in business inventories is measured as

Accepted Answer

A)  final sales minus GDP. 
B)  final sales plus GDP. 
C)  GDP minus final sales. 
D)  the ratio of final sales to GDP. 
A)  final sales minus GDP. 
B)  final sales plus GDP. 
C)  GDP minus final sales. 
D)  the ratio of final sales to GDP.

Question 5

Refer to the information provided in Table 21.6 below to answer the question(s) that follow.
Table 21.6  
-Refer to Table 21.6. Personal consumption expenditures in billions of dollars are

Accepted Answer

A)  1,000. 
B)  1,100. 
C)  1,300. 
D)  1,700. 
A)  1,000. 
B)  1,100. 
C)  1,300. 
D)  1,700.

Question 6

GDP measured in base year prices is real GDP.

Accepted Answer

A) True 
 B)False

Question 7

Interest paid by businesses is

Accepted Answer

A)  counted in national income, but not in GDP. 
B)  not counted in GDP because it is not assumed to flow from the production of goods and services. 
C)  not counted in GDP but is counted in GNP because it is paid by U.S. businesses. 
D)  included in both GDP and national income. 
A)  counted in national income, but not in GDP. 
B)  not counted in GDP because it is not assumed to flow from the production of goods and services. 
C)  not counted in GDP but is counted in GNP because it is paid by U.S. businesses. 
D)  included in both GDP and national income.

Question 8

Saving rates tend to ________ during boom times and ________ during recession periods.

Accepted Answer

A)  rise; rise 
B)  rise; fall 
C)  fall; rise 
D)  fall; fall 
A)  rise; rise 
B)  rise; fall 
C)  fall; rise 
D)  fall; fall

Question 9

Fixed weight indexes can not account for new goods.

Accepted Answer

A) True 
 B)False

Question 10

If real GDP increased during a year, then output must have increased.

Accepted Answer

A) True 
 B)False

Question 11

Taco Bell opens a branch in Iceland. The sales of the restaurant enter the U.S. GNP and the Icelandic GDP.

Accepted Answer

A) True 
 B)False

Question 12

Personal income

Accepted Answer

A)  is always less than national income. 
B)  is always greater than national income. 
C)  may be greater than or less than national income. 
D)  will always equal national income. 
A)  is always less than national income. 
B)  is always greater than national income. 
C)  may be greater than or less than national income. 
D)  will always equal national income.

Question 13

Total income in the economy can sometimes be greater than total spending.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the information provided in Table 21.4 below to answer the question(s) that follow.
Table 21.4  
-Refer to Table 21.4. The value for disposable personal income in billions of dollars is

Accepted Answer

A)  750. 
B)  770. 
C)  820. 
D)  990. 
A)  750. 
B)  770. 
C)  820. 
D)  990.

Question 15

Refer to the information provided in Table 21.6 below to answer the question(s) that follow.
Table 21.6  
-Refer to Table 21.6. The value for net exports in billions of dollars is

Accepted Answer

A)  800. 
B)  200. 
C)  -200. 
D)  -500. 
A)  800. 
B)  200. 
C)  -200. 
D)  -500.

Question 16

If GNP is $650 billion and depreciation is $70 billion, then net national product is

Accepted Answer

A)  $560 billion. 
B)  $580 billion. 
C)  $610 billion. 
D)  $720 billion. 
A)  $560 billion. 
B)  $580 billion. 
C)  $610 billion. 
D)  $720 billion.

Question 17

Saving rates tend to rise during ________ and fall during ________.

Accepted Answer

A)  boom times; expansions 
B)  recessions; expansions 
C)  boom times; recessions 
D)  recessions; contractions 
A)  boom times; expansions 
B)  recessions; expansions 
C)  boom times; recessions 
D)  recessions; contractions

Question 18

If personal saving is -$40 billion and disposable personal income is $430 billion, then personal consumption spending is

Accepted Answer

A)  $40 billion. 
B)  $390 billion. 
C)  $410 billion. 
D)  $470 billion. 
A)  $40 billion. 
B)  $390 billion. 
C)  $410 billion. 
D)  $470 billion.

Question 19

If the personal saving rate is 5% and personal saving is $10 billion, the value of personal disposable income

Accepted Answer

A)  is $100 billion. 
B)  is $200 billion. 
C)  is $500 billion. 
D)  cannot be determined from this information. 
A)  is $100 billion. 
B)  is $200 billion. 
C)  is $500 billion. 
D)  cannot be determined from this information.

Question 20

Refer to the information provided in Table 21.5 below to answer the question(s) that follow.
Table 21.5  
-Refer to Table 21.5. The value of government spending in billions of dollars is

Accepted Answer

A)  100. 
B)  250. 
C)  350. 
D)  450. 
A)  100. 
B)  250. 
C)  350. 
D)  450.

Exam 21: Measuring National Output and National Income

Legalizing all forms of illegal activities would

All used goods are considered nondurable goods.

Refer to the information provided in Table 21.2 below to answer the question(s) that follow. Table 21.2 -Refer to Table 21.2. The value for gross domestic product in billions of dollars is

The change in business inventories is measured as

Refer to the information provided in Table 21.6 below to answer the question(s) that follow. Table 21.6 -Refer to Table 21.6. Personal consumption expenditures in billions of dollars are

GDP measured in base year prices is real GDP.

Interest paid by businesses is

Saving rates tend to ________ during boom times and ________ during recession periods.

Fixed weight indexes can not account for new goods.

If real GDP increased during a year, then output must have increased.

Taco Bell opens a branch in Iceland. The sales of the restaurant enter the U.S. GNP and the Icelandic GDP.

Personal income

Total income in the economy can sometimes be greater than total spending.

Refer to the information provided in Table 21.4 below to answer the question(s) that follow. Table 21.4 -Refer to Table 21.4. The value for disposable personal income in billions of dollars is

Refer to the information provided in Table 21.6 below to answer the question(s) that follow. Table 21.6 -Refer to Table 21.6. The value for net exports in billions of dollars is

If GNP is $650 billion and depreciation is $70 billion, then net national product is

Saving rates tend to rise during ________ and fall during ________.

If personal saving is -$40 billion and disposable personal income is $430 billion, then personal consumption spending is

If the personal saving rate is 5% and personal saving is $10 billion, the value of personal disposable income

Refer to the information provided in Table 21.5 below to answer the question(s) that follow. Table 21.5 -Refer to Table 21.5. The value of government spending in billions of dollars is

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: The Labor and Land Markets

Input Demand: The Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

Introduction to Macroeconomics

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Saving rates tend to during boom times and during recession periods.

Saving rates tend to rise during and fall during .