Question 1

The total value of production from Ford's manufacturing plant in Cologne, Germany would be included in Germany's gross national product.

Accepted Answer

A) True 
 B)False

Question 2

Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of

Accepted Answer

A)  employment in a specific industry. 
B)  employment in the economy. 
C)  output of a specific firm. 
D)  output of a specific industry. 
A)  employment in a specific industry. 
B)  employment in the economy. 
C)  output of a specific firm. 
D)  output of a specific industry.

Question 3

Which of the following could cause nominal GDP to decrease next year, but real GDP to increase?

Accepted Answer

A)  The price level rises and the quantity of final goods and services produced rises. 
B)  The price level falls and the quantity of final goods and services produced rises. 
C)  The price level rises and the quantity of final goods and services produced falls. 
D)  The price level falls and the quantity of final goods and services produced falls. 
A)  The price level rises and the quantity of final goods and services produced rises. 
B)  The price level falls and the quantity of final goods and services produced rises. 
C)  The price level rises and the quantity of final goods and services produced falls. 
D)  The price level falls and the quantity of final goods and services produced falls.

Question 4

Gross domestic product is generally ________ national income.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  unrelated to 
A)  greater than 
B)  less than 
C)  equal to 
D)  unrelated to

Question 5

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 disposable personal income for this economy?

Accepted Answer

A)  $1,080 billion 
B)  $1,010 billion 
C)  $980 billion 
D)  $860 billion 
A)  $1,080 billion 
B)  $1,010 billion 
C)  $980 billion 
D)  $860 billion

Question 6

Increases in real GDP would overstate the increase in the well-being of a country over time if, over that time period, the

Accepted Answer

A)  average hours worked per week increased. 
B)  amount of pollution decreased. 
C)  price level increased. 
D)  crime rate decreased. 
A)  average hours worked per week increased. 
B)  amount of pollution decreased. 
C)  price level increased. 
D)  crime rate decreased.

Question 7

The nominal GDP of the U.S. in 2016 was approximately $18.6 trillion. This means that

Accepted Answer

A)  the value of output in 2016 was around $18.6 trillion. 
B)  total income in 2016 was around $18.6 trillion. 
C)  total spending in 2016 was around $18.6 trillion. 
D)  all of the above are true. 
A)  the value of output in 2016 was around $18.6 trillion. 
B)  total income in 2016 was around $18.6 trillion. 
C)  total spending in 2016 was around $18.6 trillion. 
D)  all of the above are true.

Question 8

The GDP deflator is equal to

Accepted Answer

A)  real GDP divided by nominal GDP. 
B)  nominal GDP divided by real GDP, multiplied by 100. 
C)  nominal GDP divided by real GDP. 
D)  real GDP divided by nominal GDP, multiplied by 100. 
A)  real GDP divided by nominal GDP. 
B)  nominal GDP divided by real GDP, multiplied by 100. 
C)  nominal GDP divided by real GDP. 
D)  real GDP divided by nominal GDP, multiplied by 100.

Question 9

In the circular flow diagram, ________ supply the factors of production, and ________ goods and services.

Accepted Answer

A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy 
A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy

Question 10

If an American firm opens a production facility in India, the total value of the production will be included in the

Accepted Answer

A)  gross domestic product of the United States. 
B)  national income of the United States. 
C)  gross domestic product of India. 
D)  consumption of fixed capital for India. 
A)  gross domestic product of the United States. 
B)  national income of the United States. 
C)  gross domestic product of India. 
D)  consumption of fixed capital for India.

Question 11

If the GDP deflator is less than 100, then for that year, nominal GDP ________ real GDP.

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 12

An inflation rate of 5% between 2017 and 2018 would be implied by a change in the GDP deflator from ________ in 2017 to ________ in 2018.

Accepted Answer

A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390 
A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390

Question 13

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 real GDP in 2018, using 2013 as the base year?

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 14

China's current rate of GDP growth is quite rapid. Its current growth rate is probably three times that of the United States. However, the levels of pollution are much higher in China. Would you consider China to be better off than the United States given this information? Why or why not?

Accepted Answer

China is not better off because of highe

Question 15

If nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be

Accepted Answer

A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0. 
A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0.

Question 16

If prices are rising on average, then

Accepted Answer

A)  real GDP will always be equal to nominal GDP. 
B)  real GDP will be greater than nominal GDP in the years after the base year. 
C)  real GDP will be less than nominal GDP in the years before the base year. 
D)  real GDP will be greater than nominal GDP in the years before the base year. 
A)  real GDP will always be equal to nominal GDP. 
B)  real GDP will be greater than nominal GDP in the years after the base year. 
C)  real GDP will be less than nominal GDP in the years before the base year. 
D)  real GDP will be greater than nominal GDP in the years before the base year.

Question 17

Value added equals the market price of the firm's product minus

Accepted Answer

A)  wages and salaries. 
B)  the price of intermediate goods. 
C)  the price of all factors of production. 
D)  depreciation on plant and equipment. 
A)  wages and salaries. 
B)  the price of intermediate goods. 
C)  the price of all factors of production. 
D)  depreciation on plant and equipment.

Question 18

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

Accepted Answer

A)  decreased government regulations on businesses. 
B)  increased income tax rates. 
C)  legalized prostitution. 
D)  legalized marijuana. 
A)  decreased government regulations on businesses. 
B)  increased income tax rates. 
C)  legalized prostitution. 
D)  legalized marijuana.

Question 19

Between 2017 and 2018, if an economy's exports rise by $8 billion and its imports fall by $8 billion, by how much will GDP change between the two years, all else equal?

Accepted Answer

A)  Net exports will increase GDP by $8 billion. 
B)  The increase in exports is offset by the decrease in imports, so there is no change in net exports and no effect on GDP. 
C)  Net exports will increase GDP by $16 billion. 
D)  Net exports will decrease GDP by $8 billion. 
A)  Net exports will increase GDP by $8 billion. 
B)  The increase in exports is offset by the decrease in imports, so there is no change in net exports and no effect on GDP. 
C)  Net exports will increase GDP by $16 billion. 
D)  Net exports will decrease GDP by $8 billion.

Question 20

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

Accepted Answer

A)  exports. 
B)  inflation. 
C)  intermediate goods. 
D)  household production. 
A)  exports. 
B)  inflation. 
C)  intermediate goods. 
D)  household production.

Exam 19: Gdp: Measuring Total Production and Income

The total value of production from Ford's manufacturing plant in Cologne, Germany would be included in Germany's gross national product.

Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of

Which of the following could cause nominal GDP to decrease next year, but real GDP to increase?

Gross domestic product is generally ________ national income.

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 disposable personal income for this economy?

Increases in real GDP would overstate the increase in the well-being of a country over time if, over that time period, the

The nominal GDP of the U.S. in 2016 was approximately $18.6 trillion. This means that

The GDP deflator is equal to

In the circular flow diagram, ________ supply the factors of production, and ________ goods and services.

If an American firm opens a production facility in India, the total value of the production will be included in the

If the GDP deflator is less than 100, then for that year, nominal GDP ________ real GDP.

An inflation rate of 5% between 2017 and 2018 would be implied by a change in the GDP deflator from ________ in 2017 to ________ in 2018.

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 real GDP in 2018, using 2013 as the base year?

China's current rate of GDP growth is quite rapid. Its current growth rate is probably three times that of the United States. However, the levels of pollution are much higher in China. Would you consider China to be better off than the United States given this information? Why or why not?

If nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be

If prices are rising on average, then

Value added equals the market price of the firm's product minus

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

Between 2017 and 2018, if an economy's exports rise by $8 billion and its imports fall by $8 billion, by how much will GDP change between the two years, all else equal?

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

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

In the circular flow diagram, supply the factors of production, and goods and services.

An inflation rate of 5% between 2017 and 2018 would be implied by a change in the GDP deflator from in 2017 to in 2018.