Question 1

The "underground economy" is also referred to as

Accepted Answer

A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy. 
A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy.

Question 2

The purchase of a new house is included in

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 3

A car that is produced in 2018 is not sold until 2019. According to the definition of GDP, in which year's GDP should it be counted?

Accepted Answer

A)  2018 
B)  2019 
C)  Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D)  The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP. 
A)  2018 
B)  2019 
C)  Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D)  The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP.

Question 4

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Accepted Answer

A) True 
 B)False

Question 5

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is likely to increase measured GDP?

Accepted Answer

A)  A greater number of women decide to stay at home and provide day care for their children under age 5. 
B)  Marijuana becomes legal to grow and sell. 
C)  Tax rates increase and more people attempt to underreport their income for tax purposes. 
D)  More people decide to do their own lawn maintenance and give up using a professional service. 
A)  A greater number of women decide to stay at home and provide day care for their children under age 5. 
B)  Marijuana becomes legal to grow and sell. 
C)  Tax rates increase and more people attempt to underreport their income for tax purposes. 
D)  More people decide to do their own lawn maintenance and give up using a professional service.

Question 7

The purchase by a household in China of a CD 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 8

When Ford increases the production of cars in Romania, which of the following occurs?

Accepted Answer

A)  GDP in the United States rises. 
B)  GNP in the United States rises. 
C)  GNP in Romania rises. 
D)  Both A and C occur. 
A)  GDP in the United States rises. 
B)  GNP in the United States rises. 
C)  GNP in Romania rises. 
D)  Both A and C occur.

Question 9

What is the largest component of spending in the United States?

Accepted Answer

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

Question 10

Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period?

Accepted Answer

Both nominal GDP and real GDP are measur

Question 11

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, the value of the furniture produced will be counted as a final good in

Accepted Answer

A)  U.S. GDP. 
B)  Canada's GDP. 
C)  Brazil's GDP. 
D)  Brazil's GNP. 
A)  U.S. GDP. 
B)  Canada's GDP. 
C)  Brazil's GDP. 
D)  Brazil's GNP.

Question 12

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

Accepted Answer

A)  GDP would decrease reflecting the costs of cleanup. 
B)  GDP would increase reflecting the costs of cleanup. 
C)  GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D)  GDP would increase well-being. 
A)  GDP would decrease reflecting the costs of cleanup. 
B)  GDP would increase reflecting the costs of cleanup. 
C)  GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D)  GDP would increase well-being.

Question 13

If the value added of a firm is positive, will the firm necessarily have positive profits?

Accepted Answer

No. Value added equals the price of the

Question 14

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A)  the underground economy. 
B)  intermediate goods. 
C)  inflation. 
D)  exports. 
A)  the underground economy. 
B)  intermediate goods. 
C)  inflation. 
D)  exports.

Question 15

Table 19-14
  
-Refer to Table 19-14. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2018 equals

Accepted Answer

A)  92.2. 
B)  102.6. 
C)  108.5. 
D)  109.1. 
A)  92.2. 
B)  102.6. 
C)  108.5. 
D)  109.1.

Question 16

Table 19-31
  
-Refer to Table 19-31. The table above represents hypothetical data from the National Income Accounts for 2017. Use the data to calculate personal income and disposable income.

Accepted Answer

Personal income = National income - Reta

Question 17

If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100.

Accepted Answer

A) True 
 B)False

Question 18

Presently, GDP is ________ to compensate for the costs of environmental damage.

Accepted Answer

A)  fully adjusted 
B)  partially adjusted 
C)  adjusted on a chain-weight basis 
D)  not adjusted 
A)  fully adjusted 
B)  partially adjusted 
C)  adjusted on a chain-weight basis 
D)  not adjusted

Question 19

Table 19-11
   Consider the following data for Tyrovia, a country that produces only two products: guns and butter.
-Refer to Table 19-11. Nominal GDP for Tyrovia in 2018 equals

Accepted Answer

A)  $1,140. 
B)  $880. 
C)  $690. 
D)  $560. 
A)  $1,140. 
B)  $880. 
C)  $690. 
D)  $560.

Question 20

Gross domestic product in the economy is measured by the

Accepted Answer

A)  total number of goods and services produced in the economy. 
B)  dollar value of all final goods and services produced in the economy. 
C)  total number of goods produced in the economy. 
D)  total number of services produced in the economy. 
A)  total number of goods and services produced in the economy. 
B)  dollar value of all final goods and services produced in the economy. 
C)  total number of goods produced in the economy. 
D)  total number of services produced in the economy.

Exam 19: Gdp: Measuring Total Production and Income

The "underground economy" is also referred to as

The purchase of a new house is included in

A car that is produced in 2018 is not sold until 2019. According to the definition of GDP, in which year's GDP should it be counted?

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.

Which of the following is likely to increase measured GDP?

The purchase by a household in China of a CD produced in the United States is included in U.S.

When Ford increases the production of cars in Romania, which of the following occurs?

What is the largest component of spending in the United States?

Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period?

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, the value of the furniture produced will be counted as a final good in

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

If the value added of a firm is positive, will the firm necessarily have positive profits?

Gross domestic product understates the total production of final goods and services because of the omission of

Table 19-14 -Refer to Table 19-14. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2018 equals

Table 19-31 -Refer to Table 19-31. The table above represents hypothetical data from the National Income Accounts for 2017. Use the data to calculate personal income and disposable income.

If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100.

Presently, GDP is ________ to compensate for the costs of environmental damage.

Table 19-11 Consider the following data for Tyrovia, a country that produces only two products: guns and butter. -Refer to Table 19-11. Nominal GDP for Tyrovia in 2018 equals

Gross domestic product in the economy is measured by the

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

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Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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