Question 1

Table 10-7
The table below contains data for the country of Togogo.The base year is 1974.
  
-Refer to Table 10-7.From 1975 to 1976,

Accepted Answer

A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew. 
A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew.

Question 2

A country's real GDP rose from 500 to 550 while its nominal GDP rose from 600 to 770.What was this country's inflation rate?

Accepted Answer

A)  16.7% 
B)  20% 
C)  -14.3% 
D)  -20% 
A)  16.7% 
B)  20% 
C)  -14.3% 
D)  -20%

Question 3

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

Accepted Answer

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

Question 4

A movie company makes 500,000 DVDs of one of its latest releases.It sells 300,000 of them before the end of the second quarter,and holds the others in its warehouse.How will the 200,000 unsold DVDs be treated in the GDP statistics?

Accepted Answer

A)  Since the DVDs eventually will be bought by consumers,they will be included as consumption in the second quarter. 
B)  Since the DVDs were not purchased in the second quarter,they will be counted as an increase in third-quarter GDP. 
C)  The DVDs will be counted as a change in inventory in the second quarter and so will be included in second-quarter GDP. 
D)  The DVDs will be counted as a change in inventory in the second quarter,and when sold in the third quarter will raise third-quarter GDP. 
A)  Since the DVDs eventually will be bought by consumers,they will be included as consumption in the second quarter. 
B)  Since the DVDs were not purchased in the second quarter,they will be counted as an increase in third-quarter GDP. 
C)  The DVDs will be counted as a change in inventory in the second quarter and so will be included in second-quarter GDP. 
D)  The DVDs will be counted as a change in inventory in the second quarter,and when sold in the third quarter will raise third-quarter GDP.

Question 5

In the GDP accounts production equals

Accepted Answer

A)  income. 
B)  income + saving. 
C)  income - government expenditures. 
D)  income - imports. 
A)  income. 
B)  income + saving. 
C)  income - government expenditures. 
D)  income - imports.

Question 6

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

Accepted Answer

A)  the estimated value of production accomplished at home,such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S.GDP. 
A)  the estimated value of production accomplished at home,such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S.GDP.

Question 7

Gross domestic product measures

Accepted Answer

A)  income and expenditures. 
B)  income but not expenditures. 
C)  expenditures but not income. 
D)  neither income nor expenditures. 
A)  income and expenditures. 
B)  income but not expenditures. 
C)  expenditures but not income. 
D)  neither income nor expenditures.

Question 8

International data on GDP and socioeconomic variables

Accepted Answer

A)  are inconclusive about the relationship between GDP and the economic well-being of citizens. 
B)  suggest that poor nations actually might enjoy a higher standard of living than do rich nations. 
C)  leave no doubt that a nation's GDP is closely associated with its citizens' standard of living. 
D)  indicate that there are few real differences in living standards around the world,in spite of the large differences in GDP between nations. 
A)  are inconclusive about the relationship between GDP and the economic well-being of citizens. 
B)  suggest that poor nations actually might enjoy a higher standard of living than do rich nations. 
C)  leave no doubt that a nation's GDP is closely associated with its citizens' standard of living. 
D)  indicate that there are few real differences in living standards around the world,in spite of the large differences in GDP between nations.

Question 9

Martin,a U.S.citizen,travels to Mexico and buys a newly manufactured motorcycle made there.His purchase is included in

Accepted Answer

A)  both Mexican GDP and U.S.GDP. 
B)  Mexican GDP,but it is not included in U.S.GDP. 
C)  U.S.GDP,but it is not included in Mexican GDP. 
D)  neither Mexican GDP nor U.S.GDP. 
A)  both Mexican GDP and U.S.GDP. 
B)  Mexican GDP,but it is not included in U.S.GDP. 
C)  U.S.GDP,but it is not included in Mexican GDP. 
D)  neither Mexican GDP nor U.S.GDP.

Question 10

U.S.GDP was almost $14 billion in 2009.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following items is counted as part of government purchases?

Accepted Answer

A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct. 
A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas,Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct.

Question 12

In the economy of Ukzten in 2010,consumption was $5300,GDP was $8800,government purchases were $1800,imports were $500,and investment was $2000.What were Ukzten's exports in 2010?

Accepted Answer

A)  -$800 
B)  -$300 
C)  $200 
D)  $300 
A)  -$800 
B)  -$300 
C)  $200 
D)  $300

Question 13

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.Which of the following is correct? The value of changing the oil is

Accepted Answer

A)  included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B)  included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C)  included in GDP if Susan changes it herself,but not if she pays Speedy Lube to change it. 
D)  not included in GDP whether Susan pays Speedy lube to change it or she changes it herself. 
A)  included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B)  included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C)  included in GDP if Susan changes it herself,but not if she pays Speedy Lube to change it. 
D)  not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Question 14

In 2009,government purchases was the largest component of U.S.GDP.

Accepted Answer

A) True 
 B)False

Question 15

Sally purchases a classic 1964 car she saw for sale on someone's lawn.She then purchases some new parts and spends 120 hours refurbishing the car which she keeps.Which of the following is included in GDP?

Accepted Answer

A)  the amount she paid to buy the car 
B)  the amount she paid to buy new parts 
C)  the value of her time repairing the car 
D)  All of the above are included. 
A)  the amount she paid to buy the car 
B)  the amount she paid to buy new parts 
C)  the value of her time repairing the car 
D)  All of the above are included.

Question 16

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter.Based on this information GDP likely

Accepted Answer

A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  may have increased,decreased,or stayed the same. 
A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  may have increased,decreased,or stayed the same.

Question 17

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment 
A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment

Question 18

Because every transaction has a buyer and a seller,

Accepted Answer

A)  GDP is more closely associated with an economy's income than it is with an economy's expenditure. 
B)  every transaction contributes equally to an economy's income and to its expenditure. 
C)  the number of firms must be equal to the number of households in a simple circular-flow diagram. 
D)  firms' profits are necessarily zero in a simple circular-flow diagram. 
A)  GDP is more closely associated with an economy's income than it is with an economy's expenditure. 
B)  every transaction contributes equally to an economy's income and to its expenditure. 
C)  the number of firms must be equal to the number of households in a simple circular-flow diagram. 
D)  firms' profits are necessarily zero in a simple circular-flow diagram.

Question 19

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

Accepted Answer

A)  U.S.consumption increases,U.S.net exports decrease,and U.S.GDP decreases. 
B)  U.S.consumption increases,U.S.net exports decrease,and U.S.GDP is unaffected. 
C)  U.S.consumption decreases,U.S.net exports increase,and U.S.GDP increases. 
D)  U.S.consumption decreases,U.S.net exports increase,and U.S.GDP is unaffected. 
A)  U.S.consumption increases,U.S.net exports decrease,and U.S.GDP decreases. 
B)  U.S.consumption increases,U.S.net exports decrease,and U.S.GDP is unaffected. 
C)  U.S.consumption decreases,U.S.net exports increase,and U.S.GDP increases. 
D)  U.S.consumption decreases,U.S.net exports increase,and U.S.GDP is unaffected.

Question 20

If an economy's GDP rises,then it must be the case that the economy's

Accepted Answer

A)  income rises and saving falls. 
B)  income and saving both rise. 
C)  income rises and expenditure falls. 
D)  income and expenditure both rise. 
A)  income rises and saving falls. 
B)  income and saving both rise. 
C)  income rises and expenditure falls. 
D)  income and expenditure both rise.

Exam 23: Measuring a Nations Income

Table 10-7 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 10-7.From 1975 to 1976,

A country's real GDP rose from 500 to 550 while its nominal GDP rose from 600 to 770.What was this country's inflation rate?

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

A movie company makes 500,000 DVDs of one of its latest releases.It sells 300,000 of them before the end of the second quarter,and holds the others in its warehouse.How will the 200,000 unsold DVDs be treated in the GDP statistics?

In the GDP accounts production equals

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

Gross domestic product measures

International data on GDP and socioeconomic variables

Martin,a U.S.citizen,travels to Mexico and buys a newly manufactured motorcycle made there.His purchase is included in

U.S.GDP was almost $14 billion in 2009.

Which of the following items is counted as part of government purchases?

In the economy of Ukzten in 2010,consumption was $5300,GDP was $8800,government purchases were $1800,imports were $500,and investment was $2000.What were Ukzten's exports in 2010?

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.Which of the following is correct? The value of changing the oil is

In 2009,government purchases was the largest component of U.S.GDP.

Sally purchases a classic 1964 car she saw for sale on someone's lawn.She then purchases some new parts and spends 120 hours refurbishing the car which she keeps.Which of the following is included in GDP?

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter.Based on this information GDP likely

Household spending on education is counted in which component or subcomponent of GDP?

Because every transaction has a buyer and a seller,

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

If an economy's GDP rises,then it must be the case that the economy's

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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