Question 1

Real GDP measures the value of production in current-year prices.

Accepted Answer

A) True 
 B)False

Question 2

GDP tells us:

Accepted Answer

A)  how much the nation produced in a year. 
B)  how much wealth the nation has accumulated in its entire history. 
C)  the value of the nation's entire stock of assets, excluding financial assets. 
D)  the value of the nation's entire stock of assets, excluding natural resources. 
A)  how much the nation produced in a year. 
B)  how much wealth the nation has accumulated in its entire history. 
C)  the value of the nation's entire stock of assets, excluding financial assets. 
D)  the value of the nation's entire stock of assets, excluding natural resources.

Question 3

In the national spending approach, consumption expenditures refer to:

Accepted Answer

A)  government and private spending on final goods and services. 
B)  private spending during all stages of production of goods and services. 
C)  private spending on all final goods and services. 
D)  private spending on tools, plants, and equipment used for future production. 
A)  government and private spending on final goods and services. 
B)  private spending during all stages of production of goods and services. 
C)  private spending on all final goods and services. 
D)  private spending on tools, plants, and equipment used for future production.

Question 4

Use the following to answer questions: Table: iPhones $$\begin{array} { l c c } 
\hline \text { Year } & \text { Quantity produced } & \text { Price } \
\hline 2000 & 100 & \$ 100 \
2010 & 90 & 110 \
\hline
\end{array}$$
-(Table: iPhones) This table shows data for a country producing only iPhones. Based on the GDP deflator, the increase in prices between 2000 and 2010 was:

Accepted Answer

A)  1%. 
B)  9.9%. 
C)  10%. 
D)  110%. 
A)  1%. 
B)  9.9%. 
C)  10%. 
D)  110%.

Question 5

A beautiful sunrise is not counted in GDP.

Accepted Answer

A) True 
 B)False

Question 6

An economy has $10 trillion in consumption, $2.5 trillion in investment, $3 trillion in government purchases, $1 trillion in exports, and $1.5 trillion in imports. What is GDP in this economy?

Accepted Answer

A)  $15 trillion 
B)  $15.5 trillion 
C)  $16.5 trillion 
D)  $18 trillion 
A)  $15 trillion 
B)  $15.5 trillion 
C)  $16.5 trillion 
D)  $18 trillion

Question 7

To compare levels of production from different years, the appropriate measure to use is:

Accepted Answer

A)  nominal GDP. 
B)  real GNP. 
C)  GDP-GNP. 
D)  the GDP deflator. 
A)  nominal GDP. 
B)  real GNP. 
C)  GDP-GNP. 
D)  the GDP deflator.

Question 8

The factor income approach classifies all of the spending in a nation as consumption, investment, government purchases, or net exports.

Accepted Answer

A) True 
 B)False

Question 9

Gross domestic product (GDP) differs from gross national product (GNP) in that:

Accepted Answer

A)  GNP measures the production of a country's permanent residents and property wherever in the world they are located. 
B)  GNP measures the production of both permanent residents and foreign workers within a country's borders. 
C)  GNP measures the production of a country's permanent residents and property within a country's borders. 
D)  GNP measures only the production of foreign workers within a country's borders. 
A)  GNP measures the production of a country's permanent residents and property wherever in the world they are located. 
B)  GNP measures the production of both permanent residents and foreign workers within a country's borders. 
C)  GNP measures the production of a country's permanent residents and property within a country's borders. 
D)  GNP measures only the production of foreign workers within a country's borders.

Real GDP measures the value of production in current-year prices.

GDP tells us:

In the national spending approach, consumption expenditures refer to:

Use the following to answer questions: Table: iPhones Year Quantity produced Price 2000 100 \ 100 2010 90 110 -(Table: iPhones) This table shows data for a country producing only iPhones. Based on the GDP deflator, the increase in prices between 2000 and 2010 was:

A beautiful sunrise is not counted in GDP.

An economy has $10 trillion in consumption, $2.5 trillion in investment, $3 trillion in government purchases, $1 trillion in exports, and $1.5 trillion in imports. What is GDP in this economy?

To compare levels of production from different years, the appropriate measure to use is:

The factor income approach classifies all of the spending in a nation as consumption, investment, government purchases, or net exports.

Gross domestic product (GDP) differs from gross national product (GNP) in that:

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

Real GDP measures the value of production in current-year prices.

GDP tells us:

In the national spending approach, consumption expenditures refer to:

Use the following to answer questions: Table: iPhones Year Quantity produced Price 2000 100 \ 100 2010 90 110 -(Table: iPhones) This table shows data for a country producing only iPhones. Based on the GDP deflator, the increase in prices between 2000 and 2010 was:

A beautiful sunrise is not counted in GDP.

An economy has $10 trillion in consumption, $2.5 trillion in investment, $3 trillion in government purchases, $1 trillion in exports, and $1.5 trillion in imports. What is GDP in this economy?

To compare levels of production from different years, the appropriate measure to use is:

The factor income approach classifies all of the spending in a nation as consumption, investment, government purchases, or net exports.

Gross domestic product (GDP) differs from gross national product (GNP) in that:

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