Question 1

The consumption component of GDP includes spending on

Accepted Answer

A)  durable goods and nondurable goods,but not spending on services. 
B)  durable goods and services,but not spending on nondurable goods. 
C)  nondurable goods and services,but not spending on durable goods. 
D)  durable goods,nondurable goods,and services. 
A)  durable goods and nondurable goods,but not spending on services. 
B)  durable goods and services,but not spending on nondurable goods. 
C)  nondurable goods and services,but not spending on durable goods. 
D)  durable goods,nondurable goods,and services.

Question 2

The residents of country A earn $500 million of income from abroad.Residents of other countries earn $200 million in country A.These earnings are accounted for in country A's

Accepted Answer

A)  GNP which is larger than GDP in country A. 
B)  GNP which is smaller than GDP in country A. 
C)  GDP which is larger than GNP in country A. 
D)  GDP which is smaller than GNP in country A. 
A)  GNP which is larger than GDP in country A. 
B)  GNP which is smaller than GDP in country A. 
C)  GDP which is larger than GNP in country A. 
D)  GDP which is smaller than GNP in country A.

Question 3

In 2009,Corny Company grows and sells $2 million worth of corn to Tasty Cereal Company,which makes corn flakes.Tasty Cereal Company produces $6 million worth of corn flakes in 2009,with sales to households during the year of $4.5 million.The unsold $1.5 million worth of corn flakes remains in Tasty Cereal Company's inventory at the end of 2009.The transactions just described contribute how much to GDP for 2009?

Accepted Answer

A)  $4.5 million 
B)  $6 million 
C)  $6.5 million 
D)  $8 million 
A)  $4.5 million 
B)  $6 million 
C)  $6.5 million 
D)  $8 million

Question 4

In order to include many different goods and services in an aggregate measure,GDP is computed using,primarily,

Accepted Answer

A)  values of goods and services based on surveys of consumers. 
B)  market prices. 
C)  quantities purchased by a typical urban household. 
D)  profits from producing goods and services. 
A)  values of goods and services based on surveys of consumers. 
B)  market prices. 
C)  quantities purchased by a typical urban household. 
D)  profits from producing goods and services.

Question 5

Nominal GDP is $12 trillion and real GDP is $15 trillion.What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1

Question 6

GDP does not reflect

Accepted Answer

A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct. 
A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct.

Question 7

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 net exports in 2010?

Accepted Answer

A)  -$32 
B)  $32 
C)  $88 
D)  $120 
A)  -$32 
B)  $32 
C)  $88 
D)  $120

Question 8

At a rummage sale,you buy two old books and an old rocking chair;your spending on these items is not included in current GDP.

Accepted Answer

A) True 
 B)False

Question 9

Table 10-6
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009.
Prices and Quantities
  
-Refer to Table 10-6.This country's inflation rate from 2008 to 2009 was

Accepted Answer

A)  -25%. 
B)  25%. 
C)  33.3%. 
D)  100%. 
A)  -25%. 
B)  25%. 
C)  33.3%. 
D)  100%.

Question 10

When economists refer to intangible items,they are referring to such things as

Accepted Answer

A)  illegal goods,and the value of such items is included in GDP. 
B)  illegal goods,and the value of such items is excluded from GDP. 
C)  hair styling and dental care,and the value of such items is included in GDP. 
D)  hair styling and dental care,and the value of such items is excluded from GDP. 
A)  illegal goods,and the value of such items is included in GDP. 
B)  illegal goods,and the value of such items is excluded from GDP. 
C)  hair styling and dental care,and the value of such items is included in GDP. 
D)  hair styling and dental care,and the value of such items is excluded from GDP.

Question 11

How is net national product (NNP)calculated?

Accepted Answer

A)  Saving is subtracted from the total income of a nation's citizens. 
B)  Saving is added to the total income of a nation's citizens 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are added to the total income of a nation's citizens. 
A)  Saving is subtracted from the total income of a nation's citizens. 
B)  Saving is added to the total income of a nation's citizens 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are added to the total income of a nation's citizens.

Question 12

Macroeconomic statistics tell us about a particular household,firm,or market.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following correctly lists what is included in the consumption component of GDP?

Accepted Answer

A)  household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B)  household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C)  household purchases of services,nondurable goods,and all durable goods 
D)  household purchases of services,nondurable goods,and durable goods other than residential construction 
A)  household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B)  household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C)  household purchases of services,nondurable goods,and all durable goods 
D)  household purchases of services,nondurable goods,and durable goods other than residential construction

Question 14

Which of the following statements about recessions is true?

Accepted Answer

A)  An old rule of thumb defining recession is two consecutive quarters of falling nominal GDP. 
B)  Recessions occur at regular intervals and last standard amounts of time. 
C)  There is no ironclad rule for the declaration of recessions. 
D)  Recessions are associated with low unemployment and high income. 
A)  An old rule of thumb defining recession is two consecutive quarters of falling nominal GDP. 
B)  Recessions occur at regular intervals and last standard amounts of time. 
C)  There is no ironclad rule for the declaration of recessions. 
D)  Recessions are associated with low unemployment and high income.

Question 15

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than,less than,or equal to GDP?

Accepted Answer

Wages,rents,and prof

Question 16

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Accepted Answer

A)  raises GDP. 
B)  decreases GDP. 
C)  doesn't change GDP because gambling is never included in GDP. 
D)  doesn't change GDP because in either case his income is included. 
A)  raises GDP. 
B)  decreases GDP. 
C)  doesn't change GDP because gambling is never included in GDP. 
D)  doesn't change GDP because in either case his income is included.

Question 17

GDP is not a perfect measure of well-being;for example,

Accepted Answer

A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct. 
A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct.

Question 18

Darin grows and sells marijuana to Jennifer.Thomas is an organic farmer who sells broccoli to Jennifer.Marijuana is an illegal good and broccoli is a legal good.Assume that if Jennifer marries either,they give her what they use to sell her.Which of the following statements is consistent with the way GDP is computed?

Accepted Answer

A)  GDP will fall if Jennifer marries either Darin or Thomas.. 
B)  GDP will fall if Jennifer marries Darin but not if she marries Thomas. 
C)  GDP will fall if Jennifer marries Thomas but not if she marries Darin. 
D)  GDP remains the same whether Jennifer marries Darin or Thomas. 
A)  GDP will fall if Jennifer marries either Darin or Thomas.. 
B)  GDP will fall if Jennifer marries Darin but not if she marries Thomas. 
C)  GDP will fall if Jennifer marries Thomas but not if she marries Darin. 
D)  GDP remains the same whether Jennifer marries Darin or Thomas.

Question 19

Which of the following is not an example of a nondurable good?

Accepted Answer

A)  a loaf of bread 
B)  a pair of jeans 
C)  a microwave 
D)  a pound of bacon 
A)  a loaf of bread 
B)  a pair of jeans 
C)  a microwave 
D)  a pound of bacon

Question 20

The U.S.buys $500 billion of goods and $250 billion of services from foreign countries.Foreign countries buy $250 billion of goods and $300 billion of services from the U.S.What is net exports?

Accepted Answer

The answer of The U.S.buys $500 billion of goods and...

Exam 23: Measuring a Nations Income

The consumption component of GDP includes spending on

The residents of country A earn $500 million of income from abroad.Residents of other countries earn $200 million in country A.These earnings are accounted for in country A's

In order to include many different goods and services in an aggregate measure,GDP is computed using,primarily,

Nominal GDP is $12 trillion and real GDP is $15 trillion.What is the GDP deflator? Show your work.

GDP does not reflect

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 net exports in 2010?

At a rummage sale,you buy two old books and an old rocking chair;your spending on these items is not included in current GDP.

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.This country's inflation rate from 2008 to 2009 was

When economists refer to intangible items,they are referring to such things as

How is net national product (NNP)calculated?

Macroeconomic statistics tell us about a particular household,firm,or market.

Which of the following correctly lists what is included in the consumption component of GDP?

Which of the following statements about recessions is true?

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than,less than,or equal to GDP?

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

GDP is not a perfect measure of well-being;for example,

Which of the following is not an example of a nondurable good?

The U.S.buys $500 billion of goods and $250 billion of services from foreign countries.Foreign countries buy $250 billion of goods and $300 billion of services from the U.S.What is net exports?

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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