Question 1

To estimate the value of U.S. GDP from U.S. GNP, we must:

Accepted Answer

A)  add the value of output produced by U.S. residents and sold abroad. 
B)  add the income earned by U.S. residents from the rest of the world and subtract payments made by U.S. residents to the rest of the world. 
C)  subtracting the value of output produced by U.S. residents and sold abroad. 
D)  subtract the income earned by U.S. residents from the rest of the world and add payments made by U.S. residents to the rest of the world. 
A)  add the value of output produced by U.S. residents and sold abroad. 
B)  add the income earned by U.S. residents from the rest of the world and subtract payments made by U.S. residents to the rest of the world. 
C)  subtracting the value of output produced by U.S. residents and sold abroad. 
D)  subtract the income earned by U.S. residents from the rest of the world and add payments made by U.S. residents to the rest of the world.

Question 2

The construction of a new state highway would be included in the _____ category of GDP.

Accepted Answer

A)  personal consumption 
B)  government purchases 
C)  government output 
D)  government investment 
A)  personal consumption 
B)  government purchases 
C)  government output 
D)  government investment

Question 3

Social Security payments to U.S. citizens are considered:

Accepted Answer

A)  transfer payments and are included in GDP. 
B)  transfer payments and are not included in GDP. 
C)  income and are included in GDP. 
D)  income and are not included in GDP. 
A)  transfer payments and are included in GDP. 
B)  transfer payments and are not included in GDP. 
C)  income and are included in GDP. 
D)  income and are not included in GDP.

Question 4

Transfer payments are:

Accepted Answer

A)  payments made to firms for investment. 
B)  payments that do not require a good or service in exchange. 
C)  considered a part of government purchases. 
D)  an important component of GDP because they increase consumption spending. 
A)  payments made to firms for investment. 
B)  payments that do not require a good or service in exchange. 
C)  considered a part of government purchases. 
D)  an important component of GDP because they increase consumption spending.

Question 5

Use the following to answer questions .
Exhibit: Output and Income Data for the Economy of Argonia
  
-(Exhibit: Output and Income Data for the Economy of Argonia) What is the value of the net income Argonia has received from other countries?

Accepted Answer

A)  -$100 billion 
B)  $1,100 billion 
C)  $100 billion 
D)  $200 billion 
A)  -$100 billion 
B)  $1,100 billion 
C)  $100 billion 
D)  $200 billion

Question 6

Use the following to answer questions .
Exhibit: The Circular Flow for the United States  
-(Exhibit: The Circular Flow for the United States) The purchase of a new tractor by Farmer Brown is:

Accepted Answer

A)  classified as gross private investment and the flow is represented by 5. 
B)  classified as gross private investment and the flow is represented by 2. 
C)  classified as consumption and the flow is represented by 5. 
D)  classified as consumption and the flow is represented by 1. 
A)  classified as gross private investment and the flow is represented by 5. 
B)  classified as gross private investment and the flow is represented by 2. 
C)  classified as consumption and the flow is represented by 5. 
D)  classified as consumption and the flow is represented by 1.

Question 7

Government purchases include:

Accepted Answer

A)  purchases made by people working in government organizations. 
B)  the total value of output produced by government agencies. 
C)  investments made by foreign public agencies. 
D)  transfer payments. 
A)  purchases made by people working in government organizations. 
B)  the total value of output produced by government agencies. 
C)  investments made by foreign public agencies. 
D)  transfer payments.

Question 8

Changes in nominal GDP

Accepted Answer

A)  are due to changes in price only while changes in real GDP are attributed to movements in output and price. 
B)  are due to changes in output and price while changes in real GDP are attributed to movements in output only. 
C)  are due to changes in exchange rate while changes in real GDP are attributed to movements in price only. 
D)  and changes in real GDP are due to changes in output and price. 
A)  are due to changes in price only while changes in real GDP are attributed to movements in output and price. 
B)  are due to changes in output and price while changes in real GDP are attributed to movements in output only. 
C)  are due to changes in exchange rate while changes in real GDP are attributed to movements in price only. 
D)  and changes in real GDP are due to changes in output and price.

Question 9

Suppose that in the country of Welworth, most residents supply factors of production to foreign firms, while producers in Welworth never employ factors owned by residents of other countries. Which of the following statements is true of the economy of Welworth?

Accepted Answer

A)  Welworth's GDP is greater than its GNP. 
B)  Welworth's GDP is less than its GNP. 
C)  Both GDP and GNP are about the same in Welworth. 
D)  Welworth's GDP exceeds GNP by an amount equal to depreciation plus indirect business taxes. 
A)  Welworth's GDP is greater than its GNP. 
B)  Welworth's GDP is less than its GNP. 
C)  Both GDP and GNP are about the same in Welworth. 
D)  Welworth's GDP exceeds GNP by an amount equal to depreciation plus indirect business taxes.

Question 10

Which of the following is an example of a stock variable?

Accepted Answer

A)  Your monthly utilities bill 
B)  The value of your stock portfolio 
C)  Your annual salary 
D)  The interest amount you pay on a mortgage 
A)  Your monthly utilities bill 
B)  The value of your stock portfolio 
C)  Your annual salary 
D)  The interest amount you pay on a mortgage

Question 11

"Avatar," a movie released in 1998, was, as of 1999, the top-grossing movie of all time. However, in real terms, it ranked eighth in box office receipts, below an older hit movie, "Gone With the Wind." From this information, we can conclude that

Accepted Answer

A)  more people went to see "Gone with the Wind" than "Avatar". 
B)  fewer people went to see "Gone with the Wind" than "Avatar". 
C)  over times, individuals movie watching habits have changed . 
D)  production cost of "Gone with the Wind" was much lesser than that of "Avatar".. 
A)  more people went to see "Gone with the Wind" than "Avatar". 
B)  fewer people went to see "Gone with the Wind" than "Avatar". 
C)  over times, individuals movie watching habits have changed . 
D)  production cost of "Gone with the Wind" was much lesser than that of "Avatar"..

Question 12

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 13

GDP can be calculated by totaling either the:

Accepted Answer

A)  market values of all final goods and services or the total volume of all intermediate goods at all stages of production. 
B)  market values of all final goods and services or the value added at all stages of production. 
C)  total sales values of all intermediate goods at all stages of production or the value added at all stages of production. 
D)  market values of all final goods and services or the values added by labor at all stages of production. 
A)  market values of all final goods and services or the total volume of all intermediate goods at all stages of production. 
B)  market values of all final goods and services or the value added at all stages of production. 
C)  total sales values of all intermediate goods at all stages of production or the value added at all stages of production. 
D)  market values of all final goods and services or the values added by labor at all stages of production.

Question 14

In the U.S., since the 1950s, the share of employee benefits as a percentage of total employee compensation:

Accepted Answer

A)  has been increasing. 
B)  has been decreasing. 
C)  has been relatively stable. 
D)  has remained the same but has fallen in dollar terms. 
A)  has been increasing. 
B)  has been decreasing. 
C)  has been relatively stable. 
D)  has remained the same but has fallen in dollar terms.

Question 15

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 16

What is the difference between a flow variable and a stock variable?

Accepted Answer

A)  A stock variable is a variable that is measured over a specific period of time while a flow variable is a variable that is independent of time. 
B)  A flow variable is a variable that is measured in units of current prices while a stock variable is measured using prices from a base period. 
C)  A flow variable is a variable that is measured over a specific period of time while a stock variable is a variable that is independent of time. 
D)  A stock variable is a variable that is measured in units of current prices while a flow variable is measured using prices from a base period. 
A)  A stock variable is a variable that is measured over a specific period of time while a flow variable is a variable that is independent of time. 
B)  A flow variable is a variable that is measured in units of current prices while a stock variable is measured using prices from a base period. 
C)  A flow variable is a variable that is measured over a specific period of time while a stock variable is a variable that is independent of time. 
D)  A stock variable is a variable that is measured in units of current prices while a flow variable is measured using prices from a base period.

Question 17

Use the following to answer questions .
Exhibit: Stages in the Production of an Office Building
  
-(Exhibit: Stages in the Production of an Office Building) A mining firm extracts iron from the earth. A steel mill converts the iron to steel beams for use in construction. A construction company uses the steel beams to make a building. Assume that the total product of these firms represents the only components of the building and that they will have no other uses. What is the value added by Fuller Mill?

Accepted Answer

A)  $325,000 
B)  $225,000 
C)  $125,000 
D)  $100,000 
A)  $325,000 
B)  $225,000 
C)  $125,000 
D)  $100,000

Question 18

The income earned by those who supply entrepreneurial talent is/are called:

Accepted Answer

A)  wages and salaries. 
B)  profits. 
C)  stock options. 
D)  net interest. 
A)  wages and salaries. 
B)  profits. 
C)  stock options. 
D)  net interest.

Question 19

Use the following to answer questions .
Exhibit: The Circular Flow for the United States  
-(Exhibit: The Circular Flow for the United States) 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 20

Use the following to answer questions .
Exhibit: Stages of Production of Toy Model Airplanes
  
-(Exhibit: Stages of Production of Toy Model Airplanes) 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

To estimate the value of U.S. GDP from U.S. GNP, we must:

The construction of a new state highway would be included in the _____ category of GDP.

Social Security payments to U.S. citizens are considered:

Transfer payments are:

Use the following to answer questions . Exhibit: Output and Income Data for the Economy of Argonia -(Exhibit: Output and Income Data for the Economy of Argonia) What is the value of the net income Argonia has received from other countries?

Use the following to answer questions . Exhibit: The Circular Flow for the United States -(Exhibit: The Circular Flow for the United States) The purchase of a new tractor by Farmer Brown is:

Government purchases include:

Changes in nominal GDP

Suppose that in the country of Welworth, most residents supply factors of production to foreign firms, while producers in Welworth never employ factors owned by residents of other countries. Which of the following statements is true of the economy of Welworth?

Which of the following is an example of a stock variable?

"Avatar," a movie released in 1998, was, as of 1999, the top-grossing movie of all time. However, in real terms, it ranked eighth in box office receipts, below an older hit movie, "Gone With the Wind." From this information, we can conclude that

A country's exports minus its imports measures:

GDP can be calculated by totaling either the:

In the U.S., since the 1950s, the share of employee benefits as a percentage of total employee compensation:

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

What is the difference between a flow variable and a stock variable?

The income earned by those who supply entrepreneurial talent is/are called:

Use the following to answer questions . Exhibit: The Circular Flow for the United States -(Exhibit: The Circular Flow for the United States) John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

Use the following to answer questions . Exhibit: Stages of Production of Toy Model Airplanes -(Exhibit: Stages of Production of Toy Model Airplanes) 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 Supply and Demand

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

Filters

Exam 6: Measuring Total Output and Income

To estimate the value of U.S. GDP from U.S. GNP, we must:

The construction of a new state highway would be included in the _____ category of GDP.

Social Security payments to U.S. citizens are considered:

Transfer payments are:

Use the following to answer questions . Exhibit: Output and Income Data for the Economy of Argonia -(Exhibit: Output and Income Data for the Economy of Argonia) What is the value of the net income Argonia has received from other countries?

Use the following to answer questions . Exhibit: The Circular Flow for the United States -(Exhibit: The Circular Flow for the United States) The purchase of a new tractor by Farmer Brown is:

Government purchases include:

Changes in nominal GDP

Suppose that in the country of Welworth, most residents supply factors of production to foreign firms, while producers in Welworth never employ factors owned by residents of other countries. Which of the following statements is true of the economy of Welworth?

Which of the following is an example of a stock variable?

"Avatar," a movie released in 1998, was, as of 1999, the top-grossing movie of all time. However, in real terms, it ranked eighth in box office receipts, below an older hit movie, "Gone With the Wind." From this information, we can conclude that

A country's exports minus its imports measures:

GDP can be calculated by totaling either the:

In the U.S., since the 1950s, the share of employee benefits as a percentage of total employee compensation:

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

What is the difference between a flow variable and a stock variable?

The income earned by those who supply entrepreneurial talent is/are called:

Use the following to answer questions . Exhibit: The Circular Flow for the United States -(Exhibit: The Circular Flow for the United States) John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

Use the following to answer questions . Exhibit: Stages of Production of Toy Model Airplanes -(Exhibit: Stages of Production of Toy Model Airplanes) 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 Supply and Demand

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

Filters