Question 1

Which of the following is not a component of gross domestic product?

Accepted Answer

A)  net exports 
B)  government purchases 
C)  purchases by consumers of used goods 
D)  purchases by consumers of finished goods 
A)  net exports 
B)  government purchases 
C)  purchases by consumers of used goods 
D)  purchases by consumers of finished goods

Question 2

Refer to the information provided in Table 21.8 below to answer the question(s) that follow.
Table 21.8  
-Refer to Table 21.8. The value for personal income in billions of dollars is

Accepted Answer

A)  970. 
B)  1,000. 
C)  1,050. 
D)  1,110. 
A)  970. 
B)  1,000. 
C)  1,050. 
D)  1,110.

Question 3

Income Mexican citizens earn in the U.S. counts in

Accepted Answer

A)  U.S. GNP. 
B)  Mexican GNP. 
C)  Mexican GDP. 
D)  both U.S. and Mexican GDP. 
A)  U.S. GNP. 
B)  Mexican GNP. 
C)  Mexican GDP. 
D)  both U.S. and Mexican GDP.

Question 4

If gross investment in 2016 is $525 billion and depreciation in 2016 is $650 billion, net investment in 2016 is

Accepted Answer

A)  -$650 billion. 
B)  -$125 billion. 
C)  $125 billion. 
D)  $1,175 billion. 
A)  -$650 billion. 
B)  -$125 billion. 
C)  $125 billion. 
D)  $1,175 billion.

Question 5

The total income of households is

Accepted Answer

A)  net national product. 
B)  personal income. 
C)  national income. 
D)  production income. 
A)  net national product. 
B)  personal income. 
C)  national income. 
D)  production income.

Question 6

If the change in business inventories is zero, then final sales are

Accepted Answer

A)  zero. 
B)  less than GDP. 
C)  greater than GDP. 
D)  equal to GDP. 
A)  zero. 
B)  less than GDP. 
C)  greater than GDP. 
D)  equal to GDP.

Question 7

In 2016, GDP was exactly equal to final sales. This implies that

Accepted Answer

A)  there was accumulation of inventories that year. 
B)  there was a decline in inventories that year. 
C)  there was no change in inventories that year. 
D)  GDP did not grow that year compared to the year before. 
A)  there was accumulation of inventories that year. 
B)  there was a decline in inventories that year. 
C)  there was no change in inventories that year. 
D)  GDP did not grow that year compared to the year before.

Question 8

If net investment is positive, then

Accepted Answer

A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is negative. 
A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is negative.

Question 9

If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals

Accepted Answer

A)  $480 billion. 
B)  $320 billion. 
C)  $280 billion. 
D)  $80 billion. 
A)  $480 billion. 
B)  $320 billion. 
C)  $280 billion. 
D)  $80 billion.

Question 10

Fixed weight indexes

Accepted Answer

A)  account for responses to supply shifts. 
B)  account for response to demand shifts. 
C)  generally become less accurate the farther in time they are from the base year. 
D)  generally become less accurate the closer in time they are to the base year. 
A)  account for responses to supply shifts. 
B)  account for response to demand shifts. 
C)  generally become less accurate the farther in time they are from the base year. 
D)  generally become less accurate the closer in time they are to the base year.

Question 11

If GNP is $625 billion, receipts of factor income from the rest of the world are $25 billion, and payments of factor income to the rest of the world are $50 billion, then GDP is

Accepted Answer

A)  $550 billion. 
B)  $600 billion. 
C)  $650 billion. 
D)  $700 billion. 
A)  $550 billion. 
B)  $600 billion. 
C)  $650 billion. 
D)  $700 billion.

Question 12

Suppose that net investment in 2016 was $90 billion and depreciation was $27 billion. Gross investment in 2016 was

Accepted Answer

A)  -$27 billion. 
B)  $63 billion. 
C)  $90 billion. 
D)  $117 billion. 
A)  -$27 billion. 
B)  $63 billion. 
C)  $90 billion. 
D)  $117 billion.

Question 13

Imports equal

Accepted Answer

A)  exports - net exports. 
B)  net exports/exports. 
C)  1 - exports. 
D)  exports + (exports - imports). 
A)  exports - net exports. 
B)  net exports/exports. 
C)  1 - exports. 
D)  exports + (exports - imports).

Question 14

If net investment in 2017 is $225 billion and gross investment in 2017 is $350 billion, depreciation in 2017 is

Accepted Answer

A)  $125 billion. 
B)  $175 billion. 
C)  $225 billion. 
D)  $575 billion. 
A)  $125 billion. 
B)  $175 billion. 
C)  $225 billion. 
D)  $575 billion.

Question 15

Refer to the information provided in Table 21.10 below to answer the question(s) that follow.
Table 21.10  
-Refer to Table 21.10. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 1 is

Accepted Answer

A)  98. 
B)  100. 
C)  112. 
D)  120. 
A)  98. 
B)  100. 
C)  112. 
D)  120.

Question 16

If net investment is zero, then

Accepted Answer

A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is zero. 
A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is zero.

Question 17

Refer to the information provided in Table 21.9 below to answer the question(s) that follow.
Table 21.9  
-Refer to Table 21.9. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 1 is

Accepted Answer

A)  1. 
B)  100. 
C)  110. 
D)  111. 
A)  1. 
B)  100. 
C)  110. 
D)  111.

Question 18

If the value of net exports is positive, then

Accepted Answer

A)  exports exceed imports. 
B)  imports exceed exports. 
C)  exports equal imports. 
D)  imports are zero. 
A)  exports exceed imports. 
B)  imports exceed exports. 
C)  exports equal imports. 
D)  imports are zero.

Question 19

Which of the following is a good or service counted in GDP?

Accepted Answer

A)  tires Ford buys to put on a car 
B)  a used tire you buy for your personal car 
C)  a new tire you buy for your personal car 
D)  used tires bought by a used car dealer to put on a car on his lot 
A)  tires Ford buys to put on a car 
B)  a used tire you buy for your personal car 
C)  a new tire you buy for your personal car 
D)  used tires bought by a used car dealer to put on a car on his lot

Question 20

The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.

Accepted Answer

A)  GDP; GDP 
B)  GNP; GNP 
C)  GNP; GDP 
D)  GDP; GNP 
A)  GDP; GDP 
B)  GNP; GNP 
C)  GNP; GDP 
D)  GDP; GNP

Exam 21: Measuring National Output and National Income

Which of the following is not a component of gross domestic product?

Refer to the information provided in Table 21.8 below to answer the question(s) that follow. Table 21.8 -Refer to Table 21.8. The value for personal income in billions of dollars is

Income Mexican citizens earn in the U.S. counts in

If gross investment in 2016 is $525 billion and depreciation in 2016 is $650 billion, net investment in 2016 is

The total income of households is

If the change in business inventories is zero, then final sales are

In 2016, GDP was exactly equal to final sales. This implies that

If net investment is positive, then

If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals

Fixed weight indexes

If GNP is $625 billion, receipts of factor income from the rest of the world are $25 billion, and payments of factor income to the rest of the world are $50 billion, then GDP is

Suppose that net investment in 2016 was $90 billion and depreciation was $27 billion. Gross investment in 2016 was

Imports equal

If net investment in 2017 is $225 billion and gross investment in 2017 is $350 billion, depreciation in 2017 is

Refer to the information provided in Table 21.10 below to answer the question(s) that follow. Table 21.10 -Refer to Table 21.10. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 1 is

If net investment is zero, then

Refer to the information provided in Table 21.9 below to answer the question(s) that follow. Table 21.9 -Refer to Table 21.9. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 1 is

If the value of net exports is positive, then

Which of the following is a good or service counted in GDP?

The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.

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

The value of what KFC produces in Japan is included in the U.S. and in the Japanese .