Question 1

Disposable personal income is equal to personal income minus personal tax payments.

Accepted Answer

A) True 
 B)False

Question 2

Relative to Canada, China has a ________ growth rate in GDP and a ________ level of real GDP.

Accepted Answer

A)  higher; lower 
B)  higher; higher 
C)  lower; lower 
D)  lower; higher 
A)  higher; lower 
B)  higher; higher 
C)  lower; lower 
D)  lower; higher

Question 3

Table 19-19
  
-Refer to Table 19-19. Given the information above, calculate the GDP deflator in 2017.

Accepted Answer

A)  87 
B)  95 
C)  105 
D)  114 
A)  87 
B)  95 
C)  105 
D)  114

Question 4

A final good is one that

Accepted Answer

A)  is used in the production of another good. 
B)  is a natural resource used to produce a good. 
C)  is purchased as an input in the production process. 
D)  is purchased by its final user. 
A)  is used in the production of another good. 
B)  is a natural resource used to produce a good. 
C)  is purchased as an input in the production process. 
D)  is purchased by its final user.

Question 5

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power. If inflation and income grow at the same rate, is this complaint valid? Explain carefully.

Accepted Answer

If inflation and income grow at the same

Question 6

Disposable personal income equals personal income

Accepted Answer

A)  minus personal tax payments. 
B)  plus government transfer payments. 
C)  minus personal tax payments plus government transfer payments. 
D)  minus government transfer payments plus personal tax payments. 
A)  minus personal tax payments. 
B)  plus government transfer payments. 
C)  minus personal tax payments plus government transfer payments. 
D)  minus government transfer payments plus personal tax payments.

Question 7

During a business cycle expansion, total production ________ and total employment ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 8

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

Accepted Answer

A)  produce goods and services no one wants. 
B)  sell their goods and services to citizens in other countries. 
C)  do not pay taxes to the government. 
D)  employ illegal immigrants from other countries. 
A)  produce goods and services no one wants. 
B)  sell their goods and services to citizens in other countries. 
C)  do not pay taxes to the government. 
D)  employ illegal immigrants from other countries.

Question 9

Suppose in 2018, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2018?

Accepted Answer

A)  the value of the house in 2018 
B)  the value of the house in 2003 
C)  the value of the house in 2018 minus depreciation 
D)  the value of the services of the real estate agent 
A)  the value of the house in 2018 
B)  the value of the house in 2003 
C)  the value of the house in 2018 minus depreciation 
D)  the value of the services of the real estate agent

Question 10

Article Summary
In the second quarter of 2017, the Chinese government announced that GDP grew by 6.9 percent, a bit better than its target of "around 6.5% or higher if possible", and up from the 6.7% growth rate in 2016. This data comes following an announcement by the government that China would change the way it calculates growth by including healthcare, tourism, and the "new economy" in its data. Some economists are skeptical about the accuracy of the figures, which point to implausibly stable growth.

-Refer to the Article Summary. Including spending on healthcare, tourism, and the "new economy" for the first time in its GDP calculations will likely result in Chinese GDP growth rates that are ________ the growth rates that would have been measured without the inclusion of this spending.

Accepted Answer

A)  higher than 
B)  lower than 
C)  equal to 
D)  negative compared to 
A)  higher than 
B)  lower than 
C)  equal to 
D)  negative compared to

Question 11

Table 19-19
  
-Refer to Table 19-19. Given the information above, calculate the GDP deflator in 2018.

Accepted Answer

A)  114 
B)  105 
C)  95 
D)  87 
A)  114 
B)  105 
C)  95 
D)  87

Question 12

An example of business fixed investment spending is

Accepted Answer

A)  a purchase of a home by a household. 
B)  a purchase of a computer by an accounting firm. 
C)  a purchase of a bond by General Electric Corporation. 
D)  $200 million of unsold cars at a car dealership. 
A)  a purchase of a home by a household. 
B)  a purchase of a computer by an accounting firm. 
C)  a purchase of a bond by General Electric Corporation. 
D)  $200 million of unsold cars at a car dealership.

Question 13

Gross national product (GNP) of the United States is the market value of all final goods and services

Accepted Answer

A)  produced within the United States. 
B)  consumed within the United States. 
C)  produced by citizens of the United States anywhere in the world. 
D)  consumed by citizens of the United States anywhere in the world. 
A)  produced within the United States. 
B)  consumed within the United States. 
C)  produced by citizens of the United States anywhere in the world. 
D)  consumed by citizens of the United States anywhere in the world.

Question 14

If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?

Accepted Answer

A)  270% 
B)  50% 
C)  5% 
D)  2.7% 
A)  270% 
B)  50% 
C)  5% 
D)  2.7%

Question 15

In 2016, which component of GDP had a negative value?

Accepted Answer

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

Question 16

National income is derived from gross domestic product by

Accepted Answer

A)  subtracting retained earnings from gross domestic product. 
B)  adding personal taxes and depreciation to gross domestic product. 
C)  subtracting depreciation from gross domestic product. 
D)  adding personal income and transfer payments to gross domestic product. 
A)  subtracting retained earnings from gross domestic product. 
B)  adding personal taxes and depreciation to gross domestic product. 
C)  subtracting depreciation from gross domestic product. 
D)  adding personal income and transfer payments to gross domestic product.

Question 17

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 2013 if 2018 is the base year?

Accepted Answer

A)  187 
B)  87 
C)  8.7 
D)  0.87 
A)  187 
B)  87 
C)  8.7 
D)  0.87

Question 18

Which of the following are not considered part of government purchases?

Accepted Answer

A)  welfare benefits 
B)  teachers' salaries paid by a local government 
C)  a tank purchased by the federal government 
D)  a bridge purchased by the state government 
A)  welfare benefits 
B)  teachers' salaries paid by a local government 
C)  a tank purchased by the federal government 
D)  a bridge purchased by the state government

Question 19

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Accepted Answer

The underground economy is that part of

Question 20

Table 19-27
  
-Refer to Table 19-27. Based on the table above, what is national income for this economy?

Accepted Answer

A)  $1,950 billion 
B)  $2,250 billion 
C)  $2,950 billion 
D)  $3,550 billion 
A)  $1,950 billion 
B)  $2,250 billion 
C)  $2,950 billion 
D)  $3,550 billion

Exam 19: Gdp: Measuring Total Production and Income

Disposable personal income is equal to personal income minus personal tax payments.

Relative to Canada, China has a ________ growth rate in GDP and a ________ level of real GDP.

Table 19-19 -Refer to Table 19-19. Given the information above, calculate the GDP deflator in 2017.

A final good is one that

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power. If inflation and income grow at the same rate, is this complaint valid? Explain carefully.

Disposable personal income equals personal income

During a business cycle expansion, total production ________ and total employment ________.

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

Suppose in 2018, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2018?

Table 19-19 -Refer to Table 19-19. Given the information above, calculate the GDP deflator in 2018.

An example of business fixed investment spending is

Gross national product (GNP) of the United States is the market value of all final goods and services

If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?

In 2016, which component of GDP had a negative value?

National income is derived from gross domestic product by

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 2013 if 2018 is the base year?

Which of the following are not considered part of government purchases?

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Table 19-27 -Refer to Table 19-27. Based on the table above, what is national income for this economy?

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

Relative to Canada, China has a growth rate in GDP and a level of real GDP.

During a business cycle expansion, total production and total employment .