Question 1

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Accepted Answer

A) True 
 B)False

Question 2

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Accepted Answer

A) True 
 B)False

Question 3

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

Accepted Answer

A)  caused measured GDP to fall. 
B)  not caused any change in measured GDP. 
C)  caused measured GDP to rise. 
D)  probably changed measured GDP,but in an uncertain direction;the direction of the change depends on the difference in the quality of the cleaning that has resulted. 
A)  caused measured GDP to fall. 
B)  not caused any change in measured GDP. 
C)  caused measured GDP to rise. 
D)  probably changed measured GDP,but in an uncertain direction;the direction of the change depends on the difference in the quality of the cleaning that has resulted.

Question 4

If the U.S.government reports that GDP in the third quarter was $14 trillion at an annual rate,then the amount of income and expenditure during quarter three was $4 trillion.

Accepted Answer

A) True 
 B)False

Question 5

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $12 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Accepted Answer

A)  $3 billion. 
B)  $4 billion. 
C)  $12 billion. 
D)  $48 billion. 
A)  $3 billion. 
B)  $4 billion. 
C)  $12 billion. 
D)  $48 billion.

Question 6

Which of the following values would be included in U.S.GDP for 2009?

Accepted Answer

A)  the rent that Sean,an American citizen,would have paid on his home in New York in 2009 had he not owned that home 
B)  the rent that John,an American citizen,paid on his apartment in San Francisco in 2009 
C)  the value of the legal services provided by Juan,an attorney and a Mexican citizen,who lived in Houston and practiced law there in 2009 
D)  All of the above would be included in U.S.GDP for 2009. 
A)  the rent that Sean,an American citizen,would have paid on his home in New York in 2009 had he not owned that home 
B)  the rent that John,an American citizen,paid on his apartment in San Francisco in 2009 
C)  the value of the legal services provided by Juan,an attorney and a Mexican citizen,who lived in Houston and practiced law there in 2009 
D)  All of the above would be included in U.S.GDP for 2009.

Question 7

When an American doctor opens a practice in Bermuda,his production there is part of U.S.GNP.

Accepted Answer

A) True 
 B)False

Question 8

Nominal GDP is $15 trillion and real GDP is $10 trillion.What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = N

Question 9

During a presidential campaign,the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office.You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years.You should conclude that real GDP per person

Accepted Answer

A)  grew by more than 12 percent. 
B)  grew,but by less than 12 percent. 
C)  was unchanged. 
D)  decreased. 
A)  grew by more than 12 percent. 
B)  grew,but by less than 12 percent. 
C)  was unchanged. 
D)  decreased.

Question 10

Suppose an economy produces only iPhones and bananas.In 2010,1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound.In 2009,the base year,iPhones sold at $400 each and bananas sold at $2 per pound.For 2010,

Accepted Answer

A)  nominal GDP is $315,000,real GDP is $410,000,and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000,real GDP is $315,000,and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000,real GDP is $410,000,and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000,real GDP is $315,000,and the GDP deflator is 76.83. 
A)  nominal GDP is $315,000,real GDP is $410,000,and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000,real GDP is $315,000,and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000,real GDP is $410,000,and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000,real GDP is $315,000,and the GDP deflator is 76.83.

Question 11

Consumption consists of spending by households on goods and services,with the exception of

Accepted Answer

A)  purchases of intangible services. 
B)  purchases of durable goods. 
C)  purchases of new houses. 
D)  spending on education. 
A)  purchases of intangible services. 
B)  purchases of durable goods. 
C)  purchases of new houses. 
D)  spending on education.

Question 12

A transfer payment is a payment made by

Accepted Answer

A)  consumers,but not in exchange for a tangible product. 
B)  firms,but not in exchange for capital equipment. 
C)  foreigners,but not in exchange for a domestically-produced good or service. 
D)  government,but not in exchange for a currently produced good or service. 
A)  consumers,but not in exchange for a tangible product. 
B)  firms,but not in exchange for capital equipment. 
C)  foreigners,but not in exchange for a domestically-produced good or service. 
D)  government,but not in exchange for a currently produced good or service.

Question 13

Table 10-1
The table below contains data for Bahkan for the year 2010.
  
-Refer to Table 10-1.Net national product for Bahkan in 2010 is

Accepted Answer

A)  $96 
B)  $104 
C)  $106 
D)  $116 
A)  $96 
B)  $104 
C)  $106 
D)  $116

Question 14

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 2011? Show your work.

Accepted Answer

Nominal GDP was $6x80 + $65x12

Question 15

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

Accepted Answer

A)  purchases of staplers,paper clips,and pens by U.S.business firms 
B)  purchases of natural gas by U.S.households 
C)  purchases of newly constructed homes by U.S.households 
D)  All of the above are correct. 
A)  purchases of staplers,paper clips,and pens by U.S.business firms 
B)  purchases of natural gas by U.S.households 
C)  purchases of newly constructed homes by U.S.households 
D)  All of the above are correct.

Question 16

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A)  capital 
B)  consumption 
C)  investment 
D)  costs 
A)  capital 
B)  consumption 
C)  investment 
D)  costs

Question 17

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

Accepted Answer

A)  $2.72 billion 
B)  $17 billion 
C)  $36.8 billion 
D)  $43 billion 
A)  $2.72 billion 
B)  $17 billion 
C)  $36.8 billion 
D)  $43 billion

Question 18

For the purpose of calculating GDP,investment is spending on

Accepted Answer

A)  stocks,bonds,and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment,inventories,and structures,including household purchases of new housing. 
D)  capital equipment,inventories,and structures,excluding household purchases of new housing. 
A)  stocks,bonds,and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment,inventories,and structures,including household purchases of new housing. 
D)  capital equipment,inventories,and structures,excluding household purchases of new housing.

Question 19

According to the circular-flow diagram GDP

Accepted Answer

A)  can be computed as the total income paid by firms or as expenditures on final goods and services. 
B)  can be computed as the total income paid by firms,but not as expenditures on final goods and services. 
C)  can be computed as expenditures on final goods and services,but not as the total income paid by firms. 
D)  cannot be computed as either total income paid by firms or expenditures on final goods and services. 
A)  can be computed as the total income paid by firms or as expenditures on final goods and services. 
B)  can be computed as the total income paid by firms,but not as expenditures on final goods and services. 
C)  can be computed as expenditures on final goods and services,but not as the total income paid by firms. 
D)  cannot be computed as either total income paid by firms or expenditures on final goods and services.

Question 20

Which of the following is included in GDP?

Accepted Answer

A)  the market value of rental housing services,but not the market value of owner-occupied housing services. 
B)  the market value of owner-occupied housing services,but not the market value of rental housing services 
C)  both the market value of rental housing services and the market value of owner-occupied housing services 
D)  neither the market value of owner-occupied housing services nor the market value of rental housing services. 
A)  the market value of rental housing services,but not the market value of owner-occupied housing services. 
B)  the market value of owner-occupied housing services,but not the market value of rental housing services 
C)  both the market value of rental housing services and the market value of owner-occupied housing services 
D)  neither the market value of owner-occupied housing services nor the market value of rental housing services.

Exam 23: Measuring a Nations Income

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

If the U.S.government reports that GDP in the third quarter was $14 trillion at an annual rate,then the amount of income and expenditure during quarter three was $4 trillion.

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $12 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Which of the following values would be included in U.S.GDP for 2009?

When an American doctor opens a practice in Bermuda,his production there is part of U.S.GNP.

Nominal GDP is $15 trillion and real GDP is $10 trillion.What is the GDP deflator? Show your work.

Suppose an economy produces only iPhones and bananas.In 2010,1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound.In 2009,the base year,iPhones sold at $400 each and bananas sold at $2 per pound.For 2010,

Consumption consists of spending by households on goods and services,with the exception of

A transfer payment is a payment made by

Table 10-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 10-1.Net national product for Bahkan in 2010 is

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 2011? Show your work.

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

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

For the purpose of calculating GDP,investment is spending on

According to the circular-flow diagram GDP

Which of the following is included in 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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