Question 1

A Mexican company operates a restaurant in the U.S.The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A)  U.S.GNP and Mexican GNP. 
B)  U.S.GNP and Mexican GDP. 
C)  U.S.GDP and Mexican GNP. 
D)  U.S.GDP and Mexican GDP. 
A)  U.S.GNP and Mexican GNP. 
B)  U.S.GNP and Mexican GDP. 
C)  U.S.GDP and Mexican GNP. 
D)  U.S.GDP and Mexican GDP.

Question 2

In the economy of Ukzten in 2010,consumption was one-half of GDP,government purchases were $2000 more than investment,investment was one-sixth of GDP,and the value of imports exceeded the value of exports by $500.What was Ukzten's GDP in 2010?

Accepted Answer

A)  $3000 
B)  $4500 
C)  $9000 
D)  $15,000 
A)  $3000 
B)  $4500 
C)  $9000 
D)  $15,000

Question 3

Expenditures by households on education are included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  the value of production by a Singaporean working in the U.S. 
B)  the value of production by an American working in Singapore 
C)  Both (a)and (b)are correct. 
D)  Neither (a)nor (b)is correct. 
A)  the value of production by a Singaporean working in the U.S. 
B)  the value of production by an American working in Singapore 
C)  Both (a)and (b)are correct. 
D)  Neither (a)nor (b)is correct.

Question 5

Which of the following is an example of a durable good?

Accepted Answer

A)  a refrigerator 
B)  a quart of motor oil 
C)  a business suit 
D)  a can of soup 
A)  a refrigerator 
B)  a quart of motor oil 
C)  a business suit 
D)  a can of soup

Question 6

In the economy of Ukzten in 2010,consumption was $3000,GDP was $5500,government purchases were $1000,imports were $2000,and investment was $1000.What were Ukzten's exports in 2010?

Accepted Answer

A)  -$1500 
B)  $500 
C)  $1500 
D)  $2500 
A)  -$1500 
B)  $500 
C)  $1500 
D)  $2500

Question 7

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)  U.S.consumption does not change,U.S.net exports decrease by $100,and U.S.GDP decreases by $100. 
B)  U.S.consumption does not change,U.S.net exports increase by $100,and U.S.GDP increases by $100. 
C)  U.S.consumption increases by $100,U.S.net exports decrease by $100,and U.S.GDP does not change. 
D)  U.S.consumption increases by $100,U.S.net exports do not change,and U.S.GDP increases by $100. 
A)  U.S.consumption does not change,U.S.net exports decrease by $100,and U.S.GDP decreases by $100. 
B)  U.S.consumption does not change,U.S.net exports increase by $100,and U.S.GDP increases by $100. 
C)  U.S.consumption increases by $100,U.S.net exports decrease by $100,and U.S.GDP does not change. 
D)  U.S.consumption increases by $100,U.S.net exports do not change,and U.S.GDP increases by $100.

Question 8

Suppose the government eliminates all environmental regulations and,as a result,the production of goods and services increases,but there is considerably more pollution.Based on this scenario,which of the following statements is correct?

Accepted Answer

A)  GDP would definitely increase,despite the fact that GDP includes environmental quality. 
B)  GDP would definitely decrease because GDP includes environmental quality. 
C)  GDP would definitely increase because GDP excludes environmental quality. 
D)  GDP could either increase or decrease because GDP excludes environmental quality. 
A)  GDP would definitely increase,despite the fact that GDP includes environmental quality. 
B)  GDP would definitely decrease because GDP includes environmental quality. 
C)  GDP would definitely increase because GDP excludes environmental quality. 
D)  GDP could either increase or decrease because GDP excludes environmental quality.

Question 9

Which of the following is not included in GDP?

Accepted Answer

A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP. 
A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP.

Question 10

Macroeconomists study

Accepted Answer

A)  the decisions of individual households and firms. 
B)  the interaction between households and firms. 
C)  economy-wide phenomena. 
D)  regulations imposed on firms and unions. 
A)  the decisions of individual households and firms. 
B)  the interaction between households and firms. 
C)  economy-wide phenomena. 
D)  regulations imposed on firms and unions.

Question 11

Table 10-2
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 10-2.What was Crete's GDP in 2010?

Accepted Answer

A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839 
A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839

Question 12

Table 10-1
The table below contains data for Bahkan for the year 2010.
  
-Refer to Table 10-1.Personal income for Bahkan in 2010 is

Accepted Answer

A)  $87. 
B)  $89. 
C)  $103. 
D)  $105. 
A)  $87. 
B)  $89. 
C)  $103. 
D)  $105.

Question 13

GDP is defined as the

Accepted Answer

A)  value of all goods and services produced within a country in a given period of time. 
B)  value of all goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time. 
C)  value of all final goods and services produced within a country in a given period of time. 
D)  value of all final goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time. 
A)  value of all goods and services produced within a country in a given period of time. 
B)  value of all goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time. 
C)  value of all final goods and services produced within a country in a given period of time. 
D)  value of all final goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time.

Question 14

Which of the following statements about GDP is correct?

Accepted Answer

A)  Nominal GDP values production at current prices,whereas real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices,whereas real GDP values production at current prices. 
C)  Nominal GDP values production at market prices,whereas real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP values production at the cost of the resources used in the production process,whereas real GDP values production at market prices.. 
A)  Nominal GDP values production at current prices,whereas real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices,whereas real GDP values production at current prices. 
C)  Nominal GDP values production at market prices,whereas real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP values production at the cost of the resources used in the production process,whereas real GDP values production at market prices..

Question 15

Between 1929 and 1933,NNP measured in current prices fell from $96 billion to $48 billion.Over the same period,the relevant price index fell from 100 to 75.
a.What was the percentage decline in nominal NNP from 1929 to1933?
b.What was the percentage decline in real NNP from 1929 to 1933? Show your work.

Accepted Answer

a.NNP measured in current prices is nomi

Question 16

Last year country A had a nominal GDP of $600 billion,a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of $720 billion,a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

Accepted Answer

A)  Country A because it had the higher nominal GDP per person. 
B)  Country B because it had the higher nominal GDP per person. 
C)  Country A because it had the higher real GDP per person. 
D)  Country B because it had the higher real GDP per person. 
A)  Country A because it had the higher nominal GDP per person. 
B)  Country B because it had the higher nominal GDP per person. 
C)  Country A because it had the higher real GDP per person. 
D)  Country B because it had the higher real GDP per person.

Question 17

After the terrorist attacks on September 11,2001,governments within the United States raised expenditures to increase security at airports.These purchases of goods and services are

Accepted Answer

A)  not included in GDP since they do not represent production. 
B)  not included in GDP since the government collects taxes to pay for them. 
C)  included in GDP since government expenditures on goods and services are included in GDP. 
D)  included in GDP only to the extent that the federal government,rather than state or local governments,paid for them. 
A)  not included in GDP since they do not represent production. 
B)  not included in GDP since the government collects taxes to pay for them. 
C)  included in GDP since government expenditures on goods and services are included in GDP. 
D)  included in GDP only to the extent that the federal government,rather than state or local governments,paid for them.

Question 18

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices. 
A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices.

Question 19

Transfer payments are

Accepted Answer

A)  included in GDP because they represent income to individuals. 
B)  included in GDP because they eventually will be spent on consumption. 
C)  not included in GDP because they are not payments for currently produced goods or services. 
D)  not included in GDP because taxes will have to be raised to pay for them. 
A)  included in GDP because they represent income to individuals. 
B)  included in GDP because they eventually will be spent on consumption. 
C)  not included in GDP because they are not payments for currently produced goods or services. 
D)  not included in GDP because taxes will have to be raised to pay for them.

Question 20

Table 10-5
A hypothetical country of Lahland produces only movies and popcorn.Quantities and prices of these goods for the last several years are shown below.The base year is 2009.
Prices and Quantities
  
-Refer to Table 10-5 In which year was this country's real GDP highest?

Accepted Answer

A)  2008 
B)  2009 
C)  2010 
D)  2011 
A)  2008 
B)  2009 
C)  2010 
D)  2011

Exam 23: Measuring a Nations Income

A Mexican company operates a restaurant in the U.S.The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

In the economy of Ukzten in 2010,consumption was one-half of GDP,government purchases were $2000 more than investment,investment was one-sixth of GDP,and the value of imports exceeded the value of exports by $500.What was Ukzten's GDP in 2010?

Expenditures by households on education are included in the consumption component of GDP.

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

Which of the following is an example of a durable good?

In the economy of Ukzten in 2010,consumption was $3000,GDP was $5500,government purchases were $1000,imports were $2000,and investment was $1000.What were Ukzten's exports in 2010?

When an American household purchases a bottle of Italian wine for $100,

Suppose the government eliminates all environmental regulations and,as a result,the production of goods and services increases,but there is considerably more pollution.Based on this scenario,which of the following statements is correct?

Which of the following is not included in GDP?

Macroeconomists study

Table 10-2 The table below contains data for the country of Crete for the year 2010. -Refer to Table 10-2.What was Crete's GDP in 2010?

Table 10-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 10-1.Personal income for Bahkan in 2010 is

GDP is defined as the

Which of the following statements about GDP is correct?

Last year country A had a nominal GDP of $600 billion,a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of $720 billion,a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

After the terrorist attacks on September 11,2001,governments within the United States raised expenditures to increase security at airports.These purchases of goods and services are

The GDP deflator for years subsequent to the base year measures the change in

Transfer payments are

Table 10-5 A hypothetical country of Lahland produces only movies and popcorn.Quantities and prices of these goods for the last several years are shown below.The base year is 2009. Prices and Quantities -Refer to Table 10-5 In which year was this country's real GDP highest?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply,demand,and Government Policies

Consumers,producers,and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Market for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring the Cost of Living

Production and Growth

Saving,investment,and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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