Question 1

When people consume more leisure:

Accepted Answer

A)  the hours in the workweek will increase. 
B)  the nation's GDP will decrease as a result of fewer hours worked. 
C)  the nation's GDP will increase as a result of the value of leisure. 
D)  the nation's GDP will not be affected. 
A)  the hours in the workweek will increase. 
B)  the nation's GDP will decrease as a result of fewer hours worked. 
C)  the nation's GDP will increase as a result of the value of leisure. 
D)  the nation's GDP will not be affected.

Question 2

A computer chip is one example of a final good.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is TRUE in the calculation of GDP?

Accepted Answer

A)  GDP is positively adjusted to include production in the underground economy. 
B)  GDP is negatively adjusted to account for environmental damage caused by businesses. 
C)  GDP does not include goods and services produced privately inside the home. 
D)  GDP includes a positive adjustment for leisure activities, even if no purchase is required. 
A)  GDP is positively adjusted to include production in the underground economy. 
B)  GDP is negatively adjusted to account for environmental damage caused by businesses. 
C)  GDP does not include goods and services produced privately inside the home. 
D)  GDP includes a positive adjustment for leisure activities, even if no purchase is required.

Question 4

Since 1982, recessions have become less frequent.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would be included in GDP for the United States?

Accepted Answer

A)  Toyota, a Japanese car company, producing cars in the United States 
B)  a U.S. professor taking a year off to teach at the London School of Economics 
C)  a tire manufacturer making and selling tires to Ford to be used in their new cars 
D)  Jane's purchase of a used car after her old car is destroyed in an accident 
A)  Toyota, a Japanese car company, producing cars in the United States 
B)  a U.S. professor taking a year off to teach at the London School of Economics 
C)  a tire manufacturer making and selling tires to Ford to be used in their new cars 
D)  Jane's purchase of a used car after her old car is destroyed in an accident

Question 6

Which of the following is considered investment according to the national spending approach?

Accepted Answer

A)  depositing $1,000 into a savings account 
B)  buying $1,000 worth of stocks and bonds 
C)  spending $1,000 on college tuition 
D)  spending $1,000 on a new piece of farming equipment 
A)  depositing $1,000 into a savings account 
B)  buying $1,000 worth of stocks and bonds 
C)  spending $1,000 on college tuition 
D)  spending $1,000 on a new piece of farming equipment

Question 7

Which statement is TRUE?

Accepted Answer

A)  Nominal GDP is always larger than real GDP. 
B)  Nominal GDP can only rise from one year to the next because of price increases. 
C)  Nominal GDP can only rise from one year to the next because of production increases. 
D)  Nominal GDP can rise from one year to the next because of price increases or because of production increases, or both. 
A)  Nominal GDP is always larger than real GDP. 
B)  Nominal GDP can only rise from one year to the next because of price increases. 
C)  Nominal GDP can only rise from one year to the next because of production increases. 
D)  Nominal GDP can rise from one year to the next because of price increases or because of production increases, or both.

Question 8

Most investment spending is carried out by:

Accepted Answer

A)  consumers. 
B)  businesses. 
C)  government. 
D)  foreigners. 
A)  consumers. 
B)  businesses. 
C)  government. 
D)  foreigners.

Question 9

A worker who opts for more leisure time in the future will cause GDP to fall.

Accepted Answer

A) True 
 B)False

Question 10

The value of a car produced by Kia (a South Korean company) in a factory located in Tennessee would be included in U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 11

What are the components of the national spending approach to splitting GDP?

Accepted Answer

A)  consumption expenditures, transfer payments, and government investment 
B)  private investment, sale of new and used goods, net exports, and transfer payments 
C)  consumption, investment goods, government purchases, and net exports 
D)  wages, rent, interest, and profit 
A)  consumption expenditures, transfer payments, and government investment 
B)  private investment, sale of new and used goods, net exports, and transfer payments 
C)  consumption, investment goods, government purchases, and net exports 
D)  wages, rent, interest, and profit

Question 12

The value of production by a U.S. worker employed by a firm located in Canada is included in:

Accepted Answer

A)  both Canada's GDP and Canada's GNP. 
B)  both U.S. GDP and U.S. GNP. 
C)  Canada's GDP and U.S. GNP. 
D)  U.S. GDP and Canada's GNP. 
A)  both Canada's GDP and Canada's GNP. 
B)  both U.S. GDP and U.S. GNP. 
C)  Canada's GDP and U.S. GNP. 
D)  U.S. GDP and Canada's GNP.

Question 13

What is a "recession" and how would a recession affect the level of real GDP and the growth rate of real GDP in a nation?

Accepted Answer

A recession is a significant, widespread

Question 14

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

Accepted Answer

A)  The country's population is growing faster than the growth of real GDP. 
B)  The country's government is hoarding large amounts of the country's production. 
C)  The country's population is growing slower than the growth of nominal GDP. 
D)  The country's nominal GDP is growing slower than its real GDP. 
A)  The country's population is growing faster than the growth of real GDP. 
B)  The country's government is hoarding large amounts of the country's production. 
C)  The country's population is growing slower than the growth of nominal GDP. 
D)  The country's nominal GDP is growing slower than its real GDP.

Question 15

When comparing living standards across time, one should use nominal GDP rather than real GDP.

Accepted Answer

A) True 
 B)False

Question 16

In 2010, real GDP was $13.2 trillion (using 2005 prices) and nominal GDP was $14.6 trillion. Based on the GDP deflator, prices in 2010 were about _____ than prices in 2005.

Accepted Answer

A)  9.6% lower 
B)  9.6% higher 
C)  10.6% lower 
D)  10.6% higher 
A)  9.6% lower 
B)  9.6% higher 
C)  10.6% lower 
D)  10.6% higher

Question 17

Use the following to answer questions: Table: Three-Good Economy II $$\begin{array} { l c c c c } 
\hline \text { Product } & \text { Quantity (2008) } & \text { Price (2008) } & \text { Quantity (2009) } & \text { Price (2009) } \
\hline \text { Computers } & 30 & \$ 1,000 & 28 & \$ 995 \
\text { Pizzas } & 100 & 10 & 150 & 15 \
\text { Burgers } & 200 & 200 & 210 & 20 \
\hline
\end{array}$$
-(Table: Three-Good Economy II) 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. What is the real GDP in 2009 if 2009 prices are used in the calculation of real GDP?

Accepted Answer

A)  $33,700 
B)  $35,000 
C)  $34,310 
D)  $35,350 
A)  $33,700 
B)  $35,000 
C)  $34,310 
D)  $35,350

Question 18

Imported goods purchased in the United States are counted as part of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 19

The national spending approach and the factor income approach are equivalent ways of measuring GDP because every dollar spent in the economy is ultimately received as income by someone.

Accepted Answer

A) True 
 B)False

Question 20

Once economic data are released in the United States, they are never revised.

Accepted Answer

A) True 
 B)False

When people consume more leisure:

A computer chip is one example of a final good.

Which of the following is TRUE in the calculation of GDP?

Since 1982, recessions have become less frequent.

Which of the following would be included in GDP for the United States?

Which of the following is considered investment according to the national spending approach?

Which statement is TRUE?

Most investment spending is carried out by:

A worker who opts for more leisure time in the future will cause GDP to fall.

The value of a car produced by Kia (a South Korean company) in a factory located in Tennessee would be included in U.S. GDP.

What are the components of the national spending approach to splitting GDP?

The value of production by a U.S. worker employed by a firm located in Canada is included in:

What is a "recession" and how would a recession affect the level of real GDP and the growth rate of real GDP in a nation?

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

When comparing living standards across time, one should use nominal GDP rather than real GDP.

In 2010, real GDP was $13.2 trillion (using 2005 prices) and nominal GDP was $14.6 trillion. Based on the GDP deflator, prices in 2010 were about _____ than prices in 2005.

Imported goods purchased in the United States are counted as part of U.S. GDP.

The national spending approach and the factor income approach are equivalent ways of measuring GDP because every dollar spent in the economy is ultimately received as income by someone.

Once economic data are released in the United States, they are never revised.

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

When people consume more leisure:

A computer chip is one example of a final good.

Which of the following is TRUE in the calculation of GDP?

Since 1982, recessions have become less frequent.

Which of the following would be included in GDP for the United States?

Which of the following is considered investment according to the national spending approach?

Which statement is TRUE?

Most investment spending is carried out by:

A worker who opts for more leisure time in the future will cause GDP to fall.

The value of a car produced by Kia (a South Korean company) in a factory located in Tennessee would be included in U.S. GDP.

What are the components of the national spending approach to splitting GDP?

The value of production by a U.S. worker employed by a firm located in Canada is included in:

What is a "recession" and how would a recession affect the level of real GDP and the growth rate of real GDP in a nation?

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

When comparing living standards across time, one should use nominal GDP rather than real GDP.

In 2010, real GDP was $13.2 trillion (using 2005 prices) and nominal GDP was $14.6 trillion. Based on the GDP deflator, prices in 2010 were about _____ than prices in 2005.

Imported goods purchased in the United States are counted as part of U.S. GDP.

The national spending approach and the factor income approach are equivalent ways of measuring GDP because every dollar spent in the economy is ultimately received as income by someone.

Once economic data are released in the United States, they are never revised.

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