Question 1

An example of an intermediate good would be

Accepted Answer

A)  the bread that goes into a sub sandwich that is sold by Quiznos. 
B)  the soda pop sold by Quiznos. 
C)  a sub sandwich sold by Quiznos. 
D)  the potato chips sold by Quiznos. 
A)  the bread that goes into a sub sandwich that is sold by Quiznos. 
B)  the soda pop sold by Quiznos. 
C)  a sub sandwich sold by Quiznos. 
D)  the potato chips sold by Quiznos. A

Question 2

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being. Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you might consider include the value of leisure, levels of pollution, crime levels, and other social problems. All of these factors are not included in GDP measurements, yet may be very important in making a decision concerning your well-being.

Question 3

National income equals gross domestic product

Accepted Answer

A)  plus sales taxes. 
B)  plus government transfer payments. 
C)  minus the consumption of fixed capital. 
D)  minus government transfer payments. 
A)  plus sales taxes. 
B)  plus government transfer payments. 
C)  minus the consumption of fixed capital. 
D)  minus government transfer payments. C

Question 4

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

Accepted Answer

A)  consumption expenditures. 
B)  investment expenditures. 
C)  government purchases. 
D)  net exports. 
A)  consumption expenditures. 
B)  investment expenditures. 
C)  government purchases. 
D)  net exports.

Question 5

In an "underground economy," the production of goods and services

Accepted Answer

A)  is not measured or included in GDP. 
B)  is not measured but is included in GDP. 
C)  is measured and included in GDP. 
D)  is usually too insignificant to be included in GDP. 
A)  is not measured or included in GDP. 
B)  is not measured but is included in GDP. 
C)  is measured and included in GDP. 
D)  is usually too insignificant to be included in GDP.

Question 6

Disposable personal income is defined as

Accepted Answer

A)  personal income less personal taxes plus indirect sales taxes. 
B)  personal income less transfer payments plus personal taxes. 
C)  personal income less personal taxes. 
D)  personal income less depreciation. 
A)  personal income less personal taxes plus indirect sales taxes. 
B)  personal income less transfer payments plus personal taxes. 
C)  personal income less personal taxes. 
D)  personal income less depreciation.

Question 7

Table 19-18
   A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 19-18. What is the GDP deflator in 2018 if 2018 is the base year?

Accepted Answer

A)  120 
B)  118 
C)  100 
D)  87 
A)  120 
B)  118 
C)  100 
D)  87

Question 8

________ is/are the payment for the factor of production ________.

Accepted Answer

A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital 
A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital

Question 9

Which component of consumption spending is the greatest in a typical industrialized economy?

Accepted Answer

A)  services 
B)  durable goods 
C)  nondurable goods 
D)  new housing 
A)  services 
B)  durable goods 
C)  nondurable goods 
D)  new housing

Question 10

Over the last 50 years, has the ratio of household production to gross domestic product in the United States increased or decreased? Consider the effect of the increased number of women working outside the home, and the effect of advances in technology in household production such as microwaves, coffee makers, power tools, etc.

Accepted Answer

"Household production" refers to goods a

Question 11

National income is defined as

Accepted Answer

A)  gross national product plus transfer payments. 
B)  gross national product less retained earnings plus transfer payments. 
C)  gross domestic product less retained earnings plus transfer payments. 
D)  gross domestic product less the consumption of fixed capital. 
A)  gross national product plus transfer payments. 
B)  gross national product less retained earnings plus transfer payments. 
C)  gross domestic product less retained earnings plus transfer payments. 
D)  gross domestic product less the consumption of fixed capital.

Question 12

Nominal GDP is GDP in a given year

Accepted Answer

A)  adjusted for inflation. 
B)  adjusted for anticipated inflation. 
C)  valued in the prices of that year. 
D)  valued in the prices of the base year. 
A)  adjusted for inflation. 
B)  adjusted for anticipated inflation. 
C)  valued in the prices of that year. 
D)  valued in the prices of the base year.

Question 13

Table 19-3
  
-Refer to Table 19-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

Accepted Answer

A)  $2,200. 
B)  $1,600. 
C)  $1,400. 
D)  $1,200. 
A)  $2,200. 
B)  $1,600. 
C)  $1,400. 
D)  $1,200.

Question 14

The circular flow diagram shows that

Accepted Answer

A)  the value of total income is equal to the total value of expenditures on final goods and services. 
B)  firms pay households wages, and households receive transfer payments from firms. 
C)  households spend all their income on goods and services. 
D)  GDP will be less than the total value of expenditures on final goods and services in the economy. 
A)  the value of total income is equal to the total value of expenditures on final goods and services. 
B)  firms pay households wages, and households receive transfer payments from firms. 
C)  households spend all their income on goods and services. 
D)  GDP will be less than the total value of expenditures on final goods and services in the economy.

Question 15

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?

Accepted Answer

Nominal GDP can change because

Question 16

In a small economy, consumption spending is $6,000, government purchases are $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?

Accepted Answer

A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700 
A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700

Question 17

Table 19-23
  
-Refer to Table 19-23. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose that the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. Use the information to compute the real GDP in the year 2013 and 2018. Calculate the real GDP in 2018 assuming the base year is 2013. Do the same calculation assuming the base year is 2018. Are the calculations different? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 18

An example of a final good would be

Accepted Answer

A)  the soy milk sold to Starbucks. 
B)  the whipped cream sold to Starbucks. 
C)  a soy latte sold by Starbucks to a student. 
D)  the coffee beans sold to Starbucks. 
A)  the soy milk sold to Starbucks. 
B)  the whipped cream sold to Starbucks. 
C)  a soy latte sold by Starbucks to a student. 
D)  the coffee beans sold to Starbucks.

Question 19

In a small economy, gross investment is $1,500, consumption spending is $6,000, net investment is $200, government purchases are $1,500, exports are $2,000 and imports are $1,000. What is GDP for this economy?

Accepted Answer

A)  $10,700 
B)  $10,300 
C)  $10,200 
D)  $10,000 
A)  $10,700 
B)  $10,300 
C)  $10,200 
D)  $10,000

Question 20

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it, and this average changes from year to year, this is called calculating GDP using

Accepted Answer

A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices. 
A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices.

Exam 19: Gdp: Measuring Total Production and Income

An example of an intermediate good would be

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being. Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

National income equals gross domestic product

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

In an "underground economy," the production of goods and services

Disposable personal income is defined as

Table 19-18 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 19-18. What is the GDP deflator in 2018 if 2018 is the base year?

________ is/are the payment for the factor of production ________.

Which component of consumption spending is the greatest in a typical industrialized economy?

National income is defined as

Nominal GDP is GDP in a given year

Table 19-3 -Refer to Table 19-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

The circular flow diagram shows that

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?

In a small economy, consumption spending is $6,000, government purchases are $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?

An example of a final good would be

In a small economy, gross investment is $1,500, consumption spending is $6,000, net investment is $200, government purchases are $1,500, exports are $2,000 and imports are $1,000. What is GDP for this economy?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it, and this average changes from year to year, this is called calculating GDP using

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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