Question 1

Changes in nominal GDP reflect

Accepted Answer

A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced. 
A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced.

Question 2

For the economy as a whole,how does income compare to expenditures? Explain.

Accepted Answer

For the economy as a whole inc

Question 3

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Accepted Answer

A) True 
 B)False

Question 4

If in some year real GDP was $5 trillion and the GDP deflator was 200,what was nominal GDP?

Accepted Answer

A)  $2.5 trillion 
B)  $10 trillion 
C)  $40 trillion 
D)  $100 trillion 
A)  $2.5 trillion 
B)  $10 trillion 
C)  $40 trillion 
D)  $100 trillion

Question 5

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Accepted Answer

A) True 
 B)False

Question 6

If real GDP doubles and the GDP deflator doubles,then nominal GDP

Accepted Answer

A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples. 
A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples.

Question 7

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Accepted Answer

GDP excludes some products because they

Question 8

Which of the following transactions adds to U.S.GDP for 2010?

Accepted Answer

A)  In 2010,Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2010. 
B)  An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time. 
C)  When Tim and Tina were both single,they lived in separate apartments and each paid $750 in rent.Tim and Tina got married in 2010 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,550 per month. 
D)  All of the above transactions add to U.S.GDP for 2006. 
A)  In 2010,Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2010. 
B)  An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time. 
C)  When Tim and Tina were both single,they lived in separate apartments and each paid $750 in rent.Tim and Tina got married in 2010 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,550 per month. 
D)  All of the above transactions add to U.S.GDP for 2006.

Question 9

Much of macroeconomics attempts to explain

Accepted Answer

A)  changes in the price of oil and gasoline. 
B)  long-run growth and short-run fluctuations in real GDP. 
C)  changes in the growth rate of state government spending. 
D)  changes in the prices and quantities of individual goods and services. 
A)  changes in the price of oil and gasoline. 
B)  long-run growth and short-run fluctuations in real GDP. 
C)  changes in the growth rate of state government spending. 
D)  changes in the prices and quantities of individual goods and services.

Question 10

Table 23-1
The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009.
Prices and Quantities
  
-Refer to Table 23-1.
What was nominal GDP,real GDP,and the GDP deflator for 2008?

Accepted Answer

Nominal GDP was $4x100 + $50X1

Question 11

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Accepted Answer

A) True 
 B)False

Question 12

A transfer payment is

Accepted Answer

A)  a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B)  a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C)  a form of government spending that is not made in exchange for a currently produced good or service. 
D)  the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure. 
A)  a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B)  a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C)  a form of government spending that is not made in exchange for a currently produced good or service. 
D)  the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.

Question 13

An identity is an equation that

Accepted Answer

A)  describes an equilibrium. 
B)  pertains to macroeconomics,not to microeconomics. 
C)  must be true because of how the variables in the equation are defined. 
D)  involves final goods,not intermediate goods. 
A)  describes an equilibrium. 
B)  pertains to macroeconomics,not to microeconomics. 
C)  must be true because of how the variables in the equation are defined. 
D)  involves final goods,not intermediate goods.

Question 14

The Patersons bought a home that was newly constructed in 2007 for $275,000.They sold the home in 2009 for $205,000.Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)  The 2009 sale increased 2009 GDP by $205,000 and had no effect on 2007 GDP. 
B)  The 2009 sale reduced 2009 GDP by $70,000 and had no effect on 2007 GDP. 
C)  The 2009 sale increased 2009 GDP by $205,000;and caused 2007 GDP to be revised downward by $70,000. 
D)  The 2009 sale affected neither 2007 GDP nor 2009 GDP. 
A)  The 2009 sale increased 2009 GDP by $205,000 and had no effect on 2007 GDP. 
B)  The 2009 sale reduced 2009 GDP by $70,000 and had no effect on 2007 GDP. 
C)  The 2009 sale increased 2009 GDP by $205,000;and caused 2007 GDP to be revised downward by $70,000. 
D)  The 2009 sale affected neither 2007 GDP nor 2009 GDP.

Question 15

Disposable income is

Accepted Answer

A)  the total income earned by a nation's permanent residents. 
B)  the total income earned by a nation's residents in the production of good and services. 
C)  the income that households and non-corporate businesses receive. 
D)  the income that households and businesses have remaining after satisfying their obligations to the government. 
A)  the total income earned by a nation's permanent residents. 
B)  the total income earned by a nation's residents in the production of good and services. 
C)  the income that households and non-corporate businesses receive. 
D)  the income that households and businesses have remaining after satisfying their obligations to the government.

Question 16

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s)is (are)GDP higher?

Accepted Answer

A)  the first and the second 
B)  the first but not the second 
C)  the second but not the first 
D)  neither the first nor the second 
A)  the first and the second 
B)  the first but not the second 
C)  the second but not the first 
D)  neither the first nor the second

Question 17

Are sales of used goods included in GDP? Explain why or why not.Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods

Question 18

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

Accepted Answer

A)  $37. 
B)  $44. 
C)  $54. 
D)  $63. 
A)  $37. 
B)  $44. 
C)  $54. 
D)  $63.

Question 19

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 20

Sam,an American citizen,prepares meals for his family at home.Ellen,a Canadian citizen,commutes to the U.S.to help prepare meals at a restaurant in Idaho.Whose value of services preparing meals is included in U.S.GDP?

Accepted Answer

A)  Sam's and Ellen's. 
B)  Sam's but not Ellen's. 
C)  Ellen's but not Sam's. 
D)  Nether Sam's nor Ellen's. 
A)  Sam's and Ellen's. 
B)  Sam's but not Ellen's. 
C)  Ellen's but not Sam's. 
D)  Nether Sam's nor Ellen's.

Exam 23: Measuring a Nations Income

Changes in nominal GDP reflect

For the economy as a whole,how does income compare to expenditures? Explain.

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

If in some year real GDP was $5 trillion and the GDP deflator was 200,what was nominal GDP?

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

If real GDP doubles and the GDP deflator doubles,then nominal GDP

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Which of the following transactions adds to U.S.GDP for 2010?

Much of macroeconomics attempts to explain

Table 23-1 The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009. Prices and Quantities -Refer to Table 23-1. What was nominal GDP,real GDP,and the GDP deflator for 2008?

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

A transfer payment is

An identity is an equation that

The Patersons bought a home that was newly constructed in 2007 for $275,000.They sold the home in 2009 for $205,000.Which of the following statements is correct regarding the sale of the house?

Disposable income is

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s)is (are)GDP higher?

Are sales of used goods included in GDP? Explain why or why not.Hint: Remember how GDP is defined.

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

Changes in real GDP reflect only changes in the amounts being produced.

Sam,an American citizen,prepares meals for his family at home.Ellen,a Canadian citizen,commutes to the U.S.to help prepare meals at a restaurant in Idaho.Whose value of services preparing meals is included in U.S.GDP?

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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