Question 1

If GDP calculations included measurements of pollution and environmental damage, GDP values would most likely be

Accepted Answer

A)  greater than their values without these measurements. 
B)  less than their values without these measurements. 
C)  unchanged from their values without these measurements. 
D)  meaningless, since GDP values without these measurements would no longer be of value. 
A)  greater than their values without these measurements. 
B)  less than their values without these measurements. 
C)  unchanged from their values without these measurements. 
D)  meaningless, since GDP values without these measurements would no longer be of value.

Question 2

Which of the following would increase gross private domestic investment in an economy?

Accepted Answer

A)  an increase in the shares of Apple stock households own 
B)  an increase in the number of workers Apple hires 
C)  an increase in the level of Apple's inventory 
D)  an increase in the number of highway construction projects the government is funding 
A)  an increase in the shares of Apple stock households own 
B)  an increase in the number of workers Apple hires 
C)  an increase in the level of Apple's inventory 
D)  an increase in the number of highway construction projects the government is funding

Question 3

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. Real GDP for Vicuna for 2016 using 2018 as the base year equals

Accepted Answer

A)  $4,620. 
B)  $5,100. 
C)  $5,650. 
D)  $5,850. 
A)  $4,620. 
B)  $5,100. 
C)  $5,650. 
D)  $5,850.

Question 4

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S. Constitution. Which of the four "missions" had the highest level of spending at all levels of government?

Accepted Answer

A)  Establish justice and ensure domestic tranquility. 
B)  Provide for the common defense. 
C)  Promote the general welfare. 
D)  Secure the blessings of liberty to ourselves and our posterity. 
A)  Establish justice and ensure domestic tranquility. 
B)  Provide for the common defense. 
C)  Promote the general welfare. 
D)  Secure the blessings of liberty to ourselves and our posterity.

Question 5

To examine how the total production of an economy has changed over time, it would be better to examine

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  GDP at current prices. 
D)  the GDP deflator. 
A)  real GDP. 
B)  nominal GDP. 
C)  GDP at current prices. 
D)  the GDP deflator.

Question 6

In the circular flow model, the value of total production for an economy ________ the value of total expenditures on final goods and services.

Accepted Answer

A)  equals 
B)  is greater than 
C)  is less than 
D)  may be greater than or less than 
A)  equals 
B)  is greater than 
C)  is less than 
D)  may be greater than or less than

Question 7

Table 19-26
   The components of national income for an economy are represented in Table 19-26 above. All values are in billions of dollars.
-Refer to Table 19-26. What is the level of personal income for this economy?

Accepted Answer

A)  $1,140 billion 
B)  $1,010 billion 
C)  $990 billion 
D)  $860 billion 
A)  $1,140 billion 
B)  $1,010 billion 
C)  $990 billion 
D)  $860 billion

Question 8

Table 19-4
  
-Refer to Table 19-4. 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)  $2,100. 
C)  $1,600. 
D)  $1,400. 
A)  $2,200. 
B)  $2,100. 
C)  $1,600. 
D)  $1,400.

Question 9

Nominal GDP will increase

Accepted Answer

A)  only if the price level rises. 
B)  only if the price level falls. 
C)  only if the quantity of final goods and services produced rises. 
D)  if either the price level or the quantity of goods and services produced rises. 
A)  only if the price level rises. 
B)  only if the price level falls. 
C)  only if the quantity of final goods and services produced rises. 
D)  if either the price level or the quantity of goods and services produced rises.

Question 10

Investment, as defined by economists, would not include which of the following? Ford

Accepted Answer

A)  buys a new robotic machine (from a plant in Ohio) to assemble cars. 
B)  adds 1,000 new cars to inventories. 
C)  builds another assembly plant in the United States. 
D)  buys U.S. government bonds. 
A)  buys a new robotic machine (from a plant in Ohio) to assemble cars. 
B)  adds 1,000 new cars to inventories. 
C)  builds another assembly plant in the United States. 
D)  buys U.S. government bonds.

Question 11

Which of the following would be directly counted in GDP in 2018?

Accepted Answer

A)  kitchen cabinets purchased from Home Depot in 2018 to be installed in a house built in 1997 
B)  kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home 
C)  kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950 
D)  none of the above 
A)  kitchen cabinets purchased from Home Depot in 2018 to be installed in a house built in 1997 
B)  kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home 
C)  kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950 
D)  none of the above

Question 12

Which of the following is not directly counted in GDP?

Accepted Answer

A)  investment expenditures 
B)  government purchases 
C)  intermediate goods 
D)  consumer goods 
A)  investment expenditures 
B)  government purchases 
C)  intermediate goods 
D)  consumer goods

Question 13

The size of the underground economy would tend to decrease if the government of a country

Accepted Answer

A)  decreased government regulations on businesses. 
B)  made over-the-counter drugs illegal. 
C)  increased income tax rates. 
D)  increased business taxes. 
A)  decreased government regulations on businesses. 
B)  made over-the-counter drugs illegal. 
C)  increased income tax rates. 
D)  increased business taxes.

Question 14

Table 19-30
  
-Refer to Table 19-30. The table above represents hypothetical data from the National Income Accounts for 2017. Use the data to calculate personal income and disposable personal income.

Accepted Answer

Personal income = National income - Reta

Question 15

If real GDP in 2018 (using 2009 prices) is lower than nominal GDP of 2017, then

Accepted Answer

A)  prices in 2018 are lower than prices in 2017. 
B)  nominal GDP in 2018 equals nominal GDP in 2017. 
C)  prices in 2018 are higher than prices in 2017. 
D)  real GDP in 2018 is larger than real GDP in 2017. 
A)  prices in 2018 are lower than prices in 2017. 
B)  nominal GDP in 2018 equals nominal GDP in 2017. 
C)  prices in 2018 are higher than prices in 2017. 
D)  real GDP in 2018 is larger than real GDP in 2017.

Question 16

GDP is not a perfect measure of well-being because

Accepted Answer

A)  the value of leisure is included in GDP. 
B)  GDP is not adjusted for pollution. 
C)  GDP is adjusted for changes in crime rates. 
D)  GDP is adjusted for increases in drug addiction. 
A)  the value of leisure is included in GDP. 
B)  GDP is not adjusted for pollution. 
C)  GDP is adjusted for changes in crime rates. 
D)  GDP is adjusted for increases in drug addiction.

Question 17

"Household production" refers to

Accepted Answer

A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves. 
A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves.

Question 18

Which of the following is considered a durable good?

Accepted Answer

A)  medical care 
B)  clothing 
C)  food 
D)  a washing machine 
A)  medical care 
B)  clothing 
C)  food 
D)  a washing machine

Question 19

National income equals gross national product minus

Accepted Answer

A)  imports. 
B)  depreciation. 
C)  inventories. 
D)  changes in inventories. 
A)  imports. 
B)  depreciation. 
C)  inventories. 
D)  changes in inventories.

Question 20

Give two reasons why GDP does not reflect total production in an economy.

Accepted Answer

The measure of GDP leaves out production

Exam 19: Gdp: Measuring Total Production and Income

If GDP calculations included measurements of pollution and environmental damage, GDP values would most likely be

Which of the following would increase gross private domestic investment in an economy?

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. Real GDP for Vicuna for 2016 using 2018 as the base year equals

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S. Constitution. Which of the four "missions" had the highest level of spending at all levels of government?

To examine how the total production of an economy has changed over time, it would be better to examine

In the circular flow model, the value of total production for an economy ________ the value of total expenditures on final goods and services.

Table 19-26 The components of national income for an economy are represented in Table 19-26 above. All values are in billions of dollars. -Refer to Table 19-26. What is the level of personal income for this economy?

Table 19-4 -Refer to Table 19-4. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

Nominal GDP will increase

Investment, as defined by economists, would not include which of the following? Ford

Which of the following would be directly counted in GDP in 2018?

Which of the following is not directly counted in GDP?

The size of the underground economy would tend to decrease if the government of a country

Table 19-30 -Refer to Table 19-30. The table above represents hypothetical data from the National Income Accounts for 2017. Use the data to calculate personal income and disposable personal income.

If real GDP in 2018 (using 2009 prices) is lower than nominal GDP of 2017, then

GDP is not a perfect measure of well-being because

"Household production" refers to

Which of the following is considered a durable good?

National income equals gross national product minus

Give two reasons why GDP does not reflect total production in an 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

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