Question 1

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Accepted Answer

A) True 
 B)False

Question 2

Under what circumstances would the GDP deflator be less than 100 after the base year?

Accepted Answer

A)  The GDP deflator will be less than 100 if there has been inflation relative to the base year. 
B)  The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year. 
C)  The GDP deflator will be less than 100 if there has been deflation relative to the base year. 
D)  There are no circumstances under which the GDP deflator could be less than 100. 
A)  The GDP deflator will be less than 100 if there has been inflation relative to the base year. 
B)  The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year. 
C)  The GDP deflator will be less than 100 if there has been deflation relative to the base year. 
D)  There are no circumstances under which the GDP deflator could be less than 100.

Question 3

The measure of production that values output using base-year prices is called

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  value-added GDP. 
D)  underground GDP. 
A)  real GDP. 
B)  nominal GDP. 
C)  value-added GDP. 
D)  underground GDP.

Question 4

If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.

Accepted Answer

A) True 
 B)False

Question 5

Table 19-13
   Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts.
-Refer to Table 19-13. Nominal GDP for Vicuna for 2016 equals

Accepted Answer

A)  $4,920. 
B)  $5,100. 
C)  $5,300. 
D)  $5,850. 
A)  $4,920. 
B)  $5,100. 
C)  $5,300. 
D)  $5,850.

Question 6

The best measure of the income households actually have available to spend is

Accepted Answer

A)  personal income. 
B)  disposable personal income. 
C)  national income. 
D)  net national income. 
A)  personal income. 
B)  disposable personal income. 
C)  national income. 
D)  net national income.

Question 7

The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is

Accepted Answer

A)  5% higher in year 2 than in year 1. 
B)  105% higher in year 2 than in year 1. 
C)  5% higher in year 1 than in year 2. 
D)  105% higher in year 1 than in year 2. 
A)  5% higher in year 2 than in year 1. 
B)  105% higher in year 2 than in year 1. 
C)  5% higher in year 1 than in year 2. 
D)  105% higher in year 1 than in year 2.

Question 8

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

Accepted Answer

A)  GNP is much larger than GDP. 
B)  GDP is much larger than GNP. 
C)  GDP is equal to GNP. 
D)  GDP is not comparable to GDP. 
A)  GNP is much larger than GDP. 
B)  GDP is much larger than GNP. 
C)  GDP is equal to GNP. 
D)  GDP is not comparable to GDP.

Question 9

Which of the following is counted in GDP?

Accepted Answer

A)  the value of goods and services produced in the underground economy 
B)  the cost of a speed boat purchased by drug smugglers 
C)  the value of do-it-yourself work 
D)  the value of leisure 
A)  the value of goods and services produced in the underground economy 
B)  the cost of a speed boat purchased by drug smugglers 
C)  the value of do-it-yourself work 
D)  the value of leisure

Question 10

Macroeconomics seeks to understand

Accepted Answer

A)  economic growth, business cycles, and inflation. 
B)  industry sales, marketing strategies, and corporate growth. 
C)  product demand, product cost, and profit maximization. 
D)  public choices, private choices, and consumer maximization. 
A)  economic growth, business cycles, and inflation. 
B)  industry sales, marketing strategies, and corporate growth. 
C)  product demand, product cost, and profit maximization. 
D)  public choices, private choices, and consumer maximization.

Question 11

Suppose that nominal GDP in 2018 was less than real GDP in 2018. Given this information, we know for certain that

Accepted Answer

A)  the price level in 2016 was greater than the price level in the base year. 
B)  the price level in 2016 was less than the price level in the base year. 
C)  real GDP in 2016 was less than real GDP in the base year. 
D)  real GDP in 2016 was greater than real GDP in the base year. 
A)  the price level in 2016 was greater than the price level in the base year. 
B)  the price level in 2016 was less than the price level in the base year. 
C)  real GDP in 2016 was less than real GDP in the base year. 
D)  real GDP in 2016 was greater than real GDP in the base year.

Question 12

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. ________ and the South Korean ________.

Accepted Answer

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

Question 13

Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

Accepted Answer

A) True 
 B)False

Question 14

The U.S. work week has declined from 60 hours in 1890 to fewer than 40 hours today. The impact of the decline in working hours

Accepted Answer

A)  increases U.S. GDP and increases the well-being of a typical working person in the U.S. 
B)  increases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
C)  decreases U.S. GDP and increases the well-being of a typical working person in the U.S. 
D)  decreases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
A)  increases U.S. GDP and increases the well-being of a typical working person in the U.S. 
B)  increases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
C)  decreases U.S. GDP and increases the well-being of a typical working person in the U.S. 
D)  decreases U.S. GDP and decreases the well-being of a typical working person in the U.S.

Question 15

Table 19-7
  
-Refer to Table 19-7. Suppose that a simple economy produces only four goods and services: iPods, t-shirts, bottled water, and oranges. Calculate nominal GDP for this simple economy.

Accepted Answer

Nominal GDP equals (

Question 16

Table 19-17
   A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 19-17. What is nominal GDP in 2018?

Accepted Answer

A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035 
A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035

Question 17

Which of the following is included in both the U.S. GDP and U.S. GNP?

Accepted Answer

A)  the value of all cars produced by General Motors in the United States 
B)  the value of all cars produced by Ford in Mexico 
C)  the value of all cars produced by Toyota in the United States 
D)  the value of all cars produced by Nissan in Japan and the United States 
A)  the value of all cars produced by General Motors in the United States 
B)  the value of all cars produced by Ford in Mexico 
C)  the value of all cars produced by Toyota in the United States 
D)  the value of all cars produced by Nissan in Japan and the United States

Question 18

Table 19-22
2013 2018
  
-Refer to Table 19-22. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. Use the information to compute real GDP in the year 2013 and 2018. Assume that 2013 is the base year. Is output higher in 2018 or 2013? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 19

Table 19-1
  
-Refer to Table 19-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals

Accepted Answer

A)  3,090 units. 
B)  $7,250. 
C)  $8,750. 
D)  $9,750. 
A)  3,090 units. 
B)  $7,250. 
C)  $8,750. 
D)  $9,750.

Question 20

If prices in the economy rise, then

Accepted Answer

A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined. 
A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined.

Exam 19: Gdp: Measuring Total Production and Income

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Under what circumstances would the GDP deflator be less than 100 after the base year?

The measure of production that values output using base-year prices is called

If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.

Table 19-13 Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts. -Refer to Table 19-13. Nominal GDP for Vicuna for 2016 equals

The best measure of the income households actually have available to spend is

The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

Which of the following is counted in GDP?

Macroeconomics seeks to understand

Suppose that nominal GDP in 2018 was less than real GDP in 2018. Given this information, we know for certain that

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. ________ and the South Korean ________.

Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

The U.S. work week has declined from 60 hours in 1890 to fewer than 40 hours today. The impact of the decline in working hours

Table 19-7 -Refer to Table 19-7. Suppose that a simple economy produces only four goods and services: iPods, t-shirts, bottled water, and oranges. Calculate nominal GDP for this simple economy.

Table 19-17 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 19-17. What is nominal GDP in 2018?

Which of the following is included in both the U.S. GDP and U.S. GNP?

If prices in the economy rise, then

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

Filters

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. and the South Korean .