Question 1

Some economists argue that GDP overstates overall economic welfare because it does not include the impact of bads such as pollution.

Accepted Answer

A) True 
 B)False

Question 2

If in the process of calculating GDP,the market value of all intermediate goods is added to the market value of all final goods,this would

Accepted Answer

A)  overstate the actual value of GDP. 
B)  produce the correct value of GDP. 
C)  understate the actual value of GDP. 
D)  avoid the possible error of double counting. 
A)  overstate the actual value of GDP. 
B)  produce the correct value of GDP. 
C)  understate the actual value of GDP. 
D)  avoid the possible error of double counting.

Question 3

Which of the following is the correct equation for computing personal income?

Accepted Answer

A)  Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B)  Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C)  Personal income = National income - taxes 
D)  Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E)  none of the above 
A)  Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B)  Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C)  Personal income = National income - taxes 
D)  Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E)  none of the above

Question 4

Which of the following is a macroeconomic measurement used to gauge macroeconomic activity?

Accepted Answer

A)  Net domestic product 
B)  National income 
C)  Personal income 
D)  Disposable income 
E)  all of the above 
A)  Net domestic product 
B)  National income 
C)  Personal income 
D)  Disposable income 
E)  all of the above

Question 5

In 2011,the U.S.GDP was approximately

Accepted Answer

A)  $15.27 trillion. 
B)  $5.15 trillion. 
C)  $10.67 trillion 
D)  $20.83 trillion 
A)  $15.27 trillion. 
B)  $5.15 trillion. 
C)  $10.67 trillion 
D)  $20.83 trillion

Question 6

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Accepted Answer

A)  federal government only. 
B)  state governments only. 
C)  local governments only. 
D)  state and local governments. 
E)  federal, state, and local governments. 
A)  federal government only. 
B)  state governments only. 
C)  local governments only. 
D)  state and local governments. 
E)  federal, state, and local governments.

Question 7

Exhibit 7-1
  
-Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

Accepted Answer

A)  GDP - $222 
B)  GDP - $331 
C)  GDP - $412 
D)  GDP - $295 
E)  GDP + $134 
A)  GDP - $222 
B)  GDP - $331 
C)  GDP - $412 
D)  GDP - $295 
E)  GDP + $134

Question 8

What does annual economic growth refer to?

Accepted Answer

A)  annual increases in GDP 
B)  annual increases in consumption spending 
C)  annual increases in investment spending 
D)  annual increases in Real GDP 
E)  none of the above 
A)  annual increases in GDP 
B)  annual increases in consumption spending 
C)  annual increases in investment spending 
D)  annual increases in Real GDP 
E)  none of the above

Question 9

Look at the following data: GDP = $11,920 billion; investment = $2,100 billion; exports = $500 billion; government purchases = $1,450 billion; consumption = $8,500 billion.What does import spending equal?

Accepted Answer

A)  $630 billion 
B)  $370 billion 
C)  $1,320 billion 
D)  $430 billion 
E)  $474 billion 
A)  $630 billion 
B)  $370 billion 
C)  $1,320 billion 
D)  $430 billion 
E)  $474 billion

Question 10

A transfer payment is a payment to a person that is made in return for goods and services supplied.

Accepted Answer

A) True 
 B)False

Question 11

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract

Accepted Answer

A)  depreciation or capital consumption allowance from GDP. 
B)  gross private domestic investment from GDP. 
C)  imports from GDP. 
D)  inventory investment from GDP. 
E)  the statistical discrepancy from GDP. 
A)  depreciation or capital consumption allowance from GDP. 
B)  gross private domestic investment from GDP. 
C)  imports from GDP. 
D)  inventory investment from GDP. 
E)  the statistical discrepancy from GDP.

Question 12

Increases in import spending

Accepted Answer

A)  raise GDP. 
B)  lower GDP. 
C)  are always balanced off in GDP by changes in exports. 
D)  may raise or lower GDP. 
A)  raise GDP. 
B)  lower GDP. 
C)  are always balanced off in GDP by changes in exports. 
D)  may raise or lower GDP.

Question 13

Leisure is

Accepted Answer

A)  a good that is not counted in GDP. 
B)  a good that is counted in GDP. 
C)  neither a good nor a bad, and it is not counted in GDP. 
D)  a bad as far as economists are concerned, because it is not tangible. 
A)  a good that is not counted in GDP. 
B)  a good that is counted in GDP. 
C)  neither a good nor a bad, and it is not counted in GDP. 
D)  a bad as far as economists are concerned, because it is not tangible.

Question 14

To macroeconomists,investment is mainly the purchases of goods and services

Accepted Answer

A)  by businesses. 
B)  to hold as wealth, such as gold coins or art. 
C)  to hold as wealth, such as stocks and bonds. 
D)  in the period previous to the period being studied. 
A)  by businesses. 
B)  to hold as wealth, such as gold coins or art. 
C)  to hold as wealth, such as stocks and bonds. 
D)  in the period previous to the period being studied.

Question 15

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co. from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above, i.e., all would be included 
A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co. from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above, i.e., all would be included

Question 16

In 1900,the country with the highest per capita GDP was

Accepted Answer

A)  Australia. 
B)  New Zealand. 
C)  the United States. 
D)  Belgium. 
E)  the Netherlands. 
A)  Australia. 
B)  New Zealand. 
C)  the United States. 
D)  Belgium. 
E)  the Netherlands.

Question 17

In the definition of GDP,the words "total market value" refer to total

Accepted Answer

A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d 
A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d

Question 18

An example of income received but not earned is

Accepted Answer

A)  government transfer payments. 
B)  undistributed profits. 
C)  compensation of employees. 
D)  rental income. 
E)  a and c 
A)  government transfer payments. 
B)  undistributed profits. 
C)  compensation of employees. 
D)  rental income. 
E)  a and c

Question 19

The largest component of national income in the United States is

Accepted Answer

A)  rental income. 
B)  proprietors' income. 
C)  compensation of employees. 
D)  corporate profits. 
E)  net interest. 
A)  rental income. 
B)  proprietors' income. 
C)  compensation of employees. 
D)  corporate profits. 
E)  net interest.

Question 20

Given that GDP is a measure of what is produced in a country,explain how the expenditure approach can measure GDP. How are items produced,but not yet sold,accounted for in the expenditure approach?

Accepted Answer

The expenditure approach measures GDP by

Exam 7: Macroeconomic Measurements: GDP and Real GDP

Some economists argue that GDP overstates overall economic welfare because it does not include the impact of bads such as pollution.

If in the process of calculating GDP,the market value of all intermediate goods is added to the market value of all final goods,this would

Which of the following is the correct equation for computing personal income?

Which of the following is a macroeconomic measurement used to gauge macroeconomic activity?

In 2011,the U.S.GDP was approximately

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Exhibit 7-1 -Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

What does annual economic growth refer to?

Look at the following data: GDP = $11,920 billion; investment = $2,100 billion; exports = $500 billion; government purchases = $1,450 billion; consumption = $8,500 billion.What does import spending equal?

A transfer payment is a payment to a person that is made in return for goods and services supplied.

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract

Increases in import spending

Leisure is

To macroeconomists,investment is mainly the purchases of goods and services

Which of the following would not be included in the calculation of this year's GDP?

In 1900,the country with the highest per capita GDP was

In the definition of GDP,the words "total market value" refer to total

An example of income received but not earned is

The largest component of national income in the United States is

Given that GDP is a measure of what is produced in a country,explain how the expenditure approach can measure GDP. How are items produced,but not yet sold,accounted for in the expenditure approach?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

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