Question 1

If real GDP rose in 2008, we can conclude that:

Accepted Answer

A)  production rose in 2008. 
B)  the price level rose in 2008. 
C)  either production, or the price level, or both, rose in 2008. 
D)  neither production nor the price level rose in 2008. 
A)  production rose in 2008. 
B)  the price level rose in 2008. 
C)  either production, or the price level, or both, rose in 2008. 
D)  neither production nor the price level rose in 2008.

Question 2

The value of goods exported from the U.S. to other countries is included in GDP for:

Accepted Answer

A)  the United States. 
B)  the country that purchases the goods. 
C)  both the United States and the country that produces the goods. 
D)  no country. 
A)  the United States. 
B)  the country that purchases the goods. 
C)  both the United States and the country that produces the goods. 
D)  no country.

Question 3

A farmer's purchase of a new tractor counts as investment in the national spending approach to measuring GDP.

Accepted Answer

A) True 
 B)False

Question 4

If 2009 prices are used in the calculation of real GDP, then nominal GDP will be ____ real GDP in 2009.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  unrelated to 
A)  greater than 
B)  less than 
C)  equal to 
D)  unrelated to

Question 5

If a country produced nothing but 20 smartphones and 10 Blu-ray players in 2011, priced at $100 per smartphone and $200 per Blu-ray player, its GDP in 2011 would be:

Accepted Answer

A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000. 
A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000.

Question 6

An economic expansion is a period of significant, widespread increases in income and employment.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer questions: Table: Wheat and Corn $$\begin{array} { l c c c c } 
\hline \text { Year } & \begin{array} { l } 
\text { Price of Wheat } \
\text { (per bushel) }
\end{array} & \begin{array} { c } 
\text { Quantity of Wheat } \
\text { (million bushels) }
\end{array} & \begin{array} { l } 
\text { Price of Corn } \
\text { (per bushel) }
\end{array} & \begin{array} { l } 
\text { Quantity of Corn } \
\text { (million tons) }
\end{array} \
\hline 2005 & \$ 56 & 1,250 & \$ 44 & 940 \
2006 & 64 & 1,360 & 52 & 1,050 \
2007 & 72 & 1,420 & 55 & 1,120 \
2008 & 80 & 1,500 & 62 & 1,260 \
\hline
\end{array}$$
-(Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP from 2005 to 2006 is:

Accepted Answer

A)  8%. 
B)  16%. 
C)  21%. 
D)  27%. 
A)  8%. 
B)  16%. 
C)  21%. 
D)  27%.

Question 8

If you accept a job in Mexico after college, your income will be part of GDP in:

Accepted Answer

A)  Mexico only. 
B)  the United States only. 
C)  both Mexico and the United States. 
D)  neither Mexico nor the United States. 
A)  Mexico only. 
B)  the United States only. 
C)  both Mexico and the United States. 
D)  neither Mexico nor the United States.

Question 9

Growing tomatoes in your back yard and making salsa for a Super Bowl party you are hosting will NOT be reflected in GDP.

Accepted Answer

A) True 
 B)False

Question 10

Based on the level of GDP, India is one of the five largest economies in the world.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer questions: Table: Three-Good Economy I $$\begin{array} { l c c c c } 
\hline \text { Product } & \text { Quantity (2008) } & \text { Price (2008) } & \text { Quantity (2009) } & \text { Price (2009) } \
\hline \text { Computers } & 25 & \$ 800.00 & 30 & \$ 1,000.00 \
\text { Pizzas } & 90 & 9.00 & 100 & 10.00 \
\text { Burgers } & 180 & 1.80 & 200 & 2.00 \
\hline
\end{array}$$
-(Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the real GDP in 2009?

Accepted Answer

A)  $20,134 
B)  $21,134 
C)  $25,260 
D)  $31,400 
A)  $20,134 
B)  $21,134 
C)  $25,260 
D)  $31,400

Question 12

A car produced by the American company GM in a plant located in Canada would be included in:

Accepted Answer

A)  U.S. GDP, but not U.S. GNP. 
B)  U.S. GNP, but not U.S. GDP. 
C)  both U.S. GDP and U.S. GNP. 
D)  neither U.S. GDP nor U.S. GNP. 
A)  U.S. GDP, but not U.S. GNP. 
B)  U.S. GNP, but not U.S. GDP. 
C)  both U.S. GDP and U.S. GNP. 
D)  neither U.S. GDP nor U.S. GNP.

Question 13

This summer you have a paid internship at the South Korean carmaker Kia Motors at their offices located in Canada. For which nation, or nations, are you contributing to GDP? Assume you are a U.S. citizen.

Accepted Answer

A)  United States 
B)  Canada 
C)  South Korea 
D)  Canada, South Korea, and the United States. 
A)  United States 
B)  Canada 
C)  South Korea 
D)  Canada, South Korea, and the United States.

Question 14

Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction?

Accepted Answer

A)  -$40,000 
B)  $15,000 
C)  $185,000 
D)  $200,000 
A)  -$40,000 
B)  $15,000 
C)  $185,000 
D)  $200,000

Question 15

The growth rate of GDP tells how rapidly the country's level of _____ is rising or falling over time.

Accepted Answer

A)  spending 
B)  trade activity 
C)  investment 
D)  production 
A)  spending 
B)  trade activity 
C)  investment 
D)  production

Question 16

How are GDP, total output, total spending, and total income related in an economy? Briefly explain.

Accepted Answer

Total output (production), total spendin

Question 17

It is possible for net exports to be a negative value.

Accepted Answer

A) True 
 B)False

Question 18

Services involve production that provides:

Accepted Answer

A)  a benefit along with the production of a tangible physical product. 
B)  a benefit without the production of a tangible physical product. 
C)  no benefit to the producer. 
D)  no benefit to the consumer. 
A)  a benefit along with the production of a tangible physical product. 
B)  a benefit without the production of a tangible physical product. 
C)  no benefit to the producer. 
D)  no benefit to the consumer.

Question 19

Environmental damage caused by pollution leaked into a river by a local factory will negatively impact GDP.

Accepted Answer

A) True 
 B)False

Question 20

The market value of all final goods and services produced by a country's residents in a year, whether at home or abroad, is called:

Accepted Answer

A)  GDP. 
B)  GNP. 
C)  GDI. 
D)  FDI. 
A)  GDP. 
B)  GNP. 
C)  GDI. 
D)  FDI.

If real GDP rose in 2008, we can conclude that:

The value of goods exported from the U.S. to other countries is included in GDP for:

A farmer's purchase of a new tractor counts as investment in the national spending approach to measuring GDP.

If 2009 prices are used in the calculation of real GDP, then nominal GDP will be ____ real GDP in 2009.

If a country produced nothing but 20 smartphones and 10 Blu-ray players in 2011, priced at $100 per smartphone and $200 per Blu-ray player, its GDP in 2011 would be:

An economic expansion is a period of significant, widespread increases in income and employment.

If you accept a job in Mexico after college, your income will be part of GDP in:

Growing tomatoes in your back yard and making salsa for a Super Bowl party you are hosting will NOT be reflected in GDP.

Based on the level of GDP, India is one of the five largest economies in the world.

A car produced by the American company GM in a plant located in Canada would be included in:

This summer you have a paid internship at the South Korean carmaker Kia Motors at their offices located in Canada. For which nation, or nations, are you contributing to GDP? Assume you are a U.S. citizen.

Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction?

The growth rate of GDP tells how rapidly the country's level of _____ is rising or falling over time.

How are GDP, total output, total spending, and total income related in an economy? Briefly explain.

It is possible for net exports to be a negative value.

Services involve production that provides:

Environmental damage caused by pollution leaked into a river by a local factory will negatively impact GDP.

The market value of all final goods and services produced by a country's residents in a year, whether at home or abroad, is called:

The Big Ideas

The Power of Trade and Comparative Advantage

Supply and Demand

Equilibrium: How Supply and Demand Determine Prices

Price Ceilings and Floors

The Wealth of Nations and Economic Growth

Growth, Capital Accumulation and the Economics of Ideas: Catching up Vs the Cutting Edge

Saving, Investment, and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations: Aggregate Demand and Supply

Transmission and Amplification Mechanisms

The Federal Reserve System and Open Market Operations

Monetary Policy

The Federal Budget: Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

Exam 6: GDP and the Measurement of Progress

If real GDP rose in 2008, we can conclude that:

The value of goods exported from the U.S. to other countries is included in GDP for:

A farmer's purchase of a new tractor counts as investment in the national spending approach to measuring GDP.

If 2009 prices are used in the calculation of real GDP, then nominal GDP will be ____ real GDP in 2009.

If a country produced nothing but 20 smartphones and 10 Blu-ray players in 2011, priced at $100 per smartphone and $200 per Blu-ray player, its GDP in 2011 would be:

An economic expansion is a period of significant, widespread increases in income and employment.

If you accept a job in Mexico after college, your income will be part of GDP in:

Growing tomatoes in your back yard and making salsa for a Super Bowl party you are hosting will NOT be reflected in GDP.

Based on the level of GDP, India is one of the five largest economies in the world.

A car produced by the American company GM in a plant located in Canada would be included in:

This summer you have a paid internship at the South Korean carmaker Kia Motors at their offices located in Canada. For which nation, or nations, are you contributing to GDP? Assume you are a U.S. citizen.

Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction?

The growth rate of GDP tells how rapidly the country's level of _____ is rising or falling over time.

How are GDP, total output, total spending, and total income related in an economy? Briefly explain.

It is possible for net exports to be a negative value.

Services involve production that provides:

Environmental damage caused by pollution leaked into a river by a local factory will negatively impact GDP.

The market value of all final goods and services produced by a country's residents in a year, whether at home or abroad, is called:

The Big Ideas

The Power of Trade and Comparative Advantage

Supply and Demand

Equilibrium: How Supply and Demand Determine Prices

Price Ceilings and Floors

The Wealth of Nations and Economic Growth

Growth, Capital Accumulation and the Economics of Ideas: Catching up Vs the Cutting Edge

Saving, Investment, and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations: Aggregate Demand and Supply

Transmission and Amplification Mechanisms

The Federal Reserve System and Open Market Operations

Monetary Policy

The Federal Budget: Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters