Question 1

Table 10-1
The table below contains data for country A for the year 2010.
  
-Refer to Table 10-1.What were country A's government purchases in 2010?

Accepted Answer

A)  $553 
B)  $1198 
C)  $1975 
D)  $2752 
A)  $553 
B)  $1198 
C)  $1975 
D)  $2752

Question 2

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)  the quality of these items is not high enough to contribute value to GDP. 
B)  measuring them is so difficult. 
C)  the government wants to discourage the production and consumption of these items. 
D)  these items are not reported on income tax forms. 
A)  the quality of these items is not high enough to contribute value to GDP. 
B)  measuring them is so difficult. 
C)  the government wants to discourage the production and consumption of these items. 
D)  these items are not reported on income tax forms.

Question 3

A Texas household receives a Social Security check for $500,which it uses to purchase a $460 television made in Korea by a Korean firm and a $40 dinner at a local restaurant.As a result,U.S.GDP

Accepted Answer

A)  does not change. 
B)  increases by $40. 
C)  increases by $540. 
D)  increases by $1000. 
A)  does not change. 
B)  increases by $40. 
C)  increases by $540. 
D)  increases by $1000.

Question 4

Which of the following is an example of depreciation?

Accepted Answer

A)  falling stock prices 
B)  the retirement of several employees 
C)  computers becoming obsolete 
D)  All of the above are examples of depreciation. 
A)  falling stock prices 
B)  the retirement of several employees 
C)  computers becoming obsolete 
D)  All of the above are examples of depreciation.

Question 5

In 2009,the level of U.S.real GDP was close to four times its 1965 level.

Accepted Answer

A) True 
 B)False

Question 6

A U.S.-owned automobile factory uses $50 million worth of materials produced in the U.S.and $10 million worth of material purchased from foreign countries to produce $100 million of automobiles.$70 million worth of these automobiles are purchased by U.S.consumers,$25 million are sold in foreign countries,and $5 million are added to inventory.How much of this production is included in U.S.GDP? By how much do these transactions alone affect U.S.net exports?

Accepted Answer

$90 million is inclu

Question 7

If net exports is a negative number for a particular year,then

Accepted Answer

A)  the value of firms' inventories declined over the course of the year. 
B)  consumption exceeded the sum of investment and government purchases during the year. 
C)  the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D)  the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year. 
A)  the value of firms' inventories declined over the course of the year. 
B)  consumption exceeded the sum of investment and government purchases during the year. 
C)  the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D)  the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

Question 8

National income differs from net national because

Accepted Answer

A)  it includes profits of corporations. 
B)  of a statistical discrepancy. 
C)  it includes transfer payments. 
D)  it excludes depreciation. 
A)  it includes profits of corporations. 
B)  of a statistical discrepancy. 
C)  it includes transfer payments. 
D)  it excludes depreciation.

Question 9

Which of the following is not correct?

Accepted Answer

A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries,including the United States,GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments. 
A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries,including the United States,GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments.

Question 10

Which of the following is correct?

Accepted Answer

A)  Nominal GDP is always less than real GDP. 
B)  Nominal GDP is always greater than real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year. 
A)  Nominal GDP is always less than real GDP. 
B)  Nominal GDP is always greater than real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year.

Question 11

If consumption is $7000,exports are $600,government purchases are $2000,government transfers are $900,imports are $800,and investment is $1000,then GDP is $9,800.

Accepted Answer

A) True 
 B)False

Question 12

George lived in a home that was newly constructed in 2005 for which he paid $200,000.In 2008 he sold the house for $225,000.Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)  The 2008 sale increased 2008 GDP by $225,000 and had no effect on 2005 GDP. 
B)  The 2008 sale increased 2008 GDP by $25,000 and had no effect on 2005 GDP. 
C)  The 2008 sale increased 2008 GDP by $225,000;furthermore,the 2008 sale caused 2005 GDP to be revised upward by $25,000. 
D)  The 2008 sale affected neither 2008 GDP nor 2005 GDP. 
A)  The 2008 sale increased 2008 GDP by $225,000 and had no effect on 2005 GDP. 
B)  The 2008 sale increased 2008 GDP by $25,000 and had no effect on 2005 GDP. 
C)  The 2008 sale increased 2008 GDP by $225,000;furthermore,the 2008 sale caused 2005 GDP to be revised upward by $25,000. 
D)  The 2008 sale affected neither 2008 GDP nor 2005 GDP.

Question 13

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator ?

Accepted Answer

A)  25 
B)  40 
C)  250 
D)  400 
A)  25 
B)  40 
C)  250 
D)  400

Question 14

U.S.GDP includes the market value of rental housing,but not the market value of owner-occupied housing services.

Accepted Answer

A) True 
 B)False

Question 15

Table 10-4
The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008.
Prices and Quantities
  
-Refer to Table 10-4.In 2009,this country's

Accepted Answer

A)  real GDP was $660,and the GDP deflator was 113.4 
B)  real GDP was $670,and the GDP deflator was 115.2 
C)  real GDP was $660,and the GDP deflator was 115.2. 
D)  real GDP was $670,and the GDP deflator was 113.4. 
A)  real GDP was $660,and the GDP deflator was 113.4 
B)  real GDP was $670,and the GDP deflator was 115.2 
C)  real GDP was $660,and the GDP deflator was 115.2. 
D)  real GDP was $670,and the GDP deflator was 113.4.

Question 16

Quality Motors is a Japanese-owned company that produces automobiles;all of its automobiles are produced in American plants.In 2008,Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S.and $13 million in Mexico.In addition,it sold $2 million from the previous year's inventory in the U.S.The transactions just described contribute how much to U.S.GDP for 2008?

Accepted Answer

A)  $12 million 
B)  $14 million 
C)  $25 million 
D)  $27 million 
A)  $12 million 
B)  $14 million 
C)  $25 million 
D)  $27 million

Question 17

If the value of an economy's imports exceeds the value of that economy's exports,then net exports is a negative number.

Accepted Answer

A) True 
 B)False

Question 18

In the United States in 2009,government purchases of goods and services were

Accepted Answer

A)  larger than consumption,but smaller than investment. 
B)  larger than investment,but smaller than consumption. 
C)  smaller than both consumption and investment. 
D)  larger than both consumption and investment. 
A)  larger than consumption,but smaller than investment. 
B)  larger than investment,but smaller than consumption. 
C)  smaller than both consumption and investment. 
D)  larger than both consumption and investment.

Question 19

Table 10-1
The table below contains data for country A for the year 2010.
  
-Refer to Table 10-1.What was country A's consumption in 2010?

Accepted Answer

A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015 
A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015

Question 20

The goal of macroeconomics is to explain the economic changes that affect many households,firms,and markets simultaneously.

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nations Income

Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What were country A's government purchases in 2010?

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

A Texas household receives a Social Security check for $500,which it uses to purchase a $460 television made in Korea by a Korean firm and a $40 dinner at a local restaurant.As a result,U.S.GDP

Which of the following is an example of depreciation?

In 2009,the level of U.S.real GDP was close to four times its 1965 level.

If net exports is a negative number for a particular year,then

National income differs from net national because

Which of the following is not correct?

Which of the following is correct?

If consumption is $7000,exports are $600,government purchases are $2000,government transfers are $900,imports are $800,and investment is $1000,then GDP is $9,800.

George lived in a home that was newly constructed in 2005 for which he paid $200,000.In 2008 he sold the house for $225,000.Which of the following statements is correct regarding the sale of the house?

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator ?

U.S.GDP includes the market value of rental housing,but not the market value of owner-occupied housing services.

Table 10-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 10-4.In 2009,this country's

If the value of an economy's imports exceeds the value of that economy's exports,then net exports is a negative number.

In the United States in 2009,government purchases of goods and services were

Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What was country A's consumption in 2010?

The goal of macroeconomics is to explain the economic changes that affect many households,firms,and markets simultaneously.

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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