Question 1

Which of these transactions occurring in 2011 would contribute to GDP for 2011?

Accepted Answer

A)  A contractor sells a new house which was built in 2009. 
B)  Mario sells his used car for a profit. 
C)  Sally buys $10,000 worth of U.S. government bonds as an investment. 
D)  Boeing sells a 787 aircraft produced in 2011 to a Korean airline. 
A)  A contractor sells a new house which was built in 2009. 
B)  Mario sells his used car for a profit. 
C)  Sally buys $10,000 worth of U.S. government bonds as an investment. 
D)  Boeing sells a 787 aircraft produced in 2011 to a Korean airline.

Question 2

Explain the difference between real GDP and nominal GDP.

Accepted Answer

Real GDP is adjusted for changes in the

Question 3

Which of these goods is an intermediate good that would NOT be counted in GDP in the year it is produced?

Accepted Answer

A)  a tractor 
B)  wood used for making furniture 
C)  an oven for installation in a bakery 
D)  flour sold in a grocery store 
A)  a tractor 
B)  wood used for making furniture 
C)  an oven for installation in a bakery 
D)  flour sold in a grocery store

Question 4

If a country's GDP per capita rises, this means that:

Accepted Answer

A)  everyone in the country has less wealth. 
B)  the country has fewer poor people. 
C)  some people in the country have more wealth. 
D)  everyone in the country has more wealth. 
A)  everyone in the country has less wealth. 
B)  the country has fewer poor people. 
C)  some people in the country have more wealth. 
D)  everyone in the country has more wealth.

Question 5

If a country has 5% real GDP growth and 5% population growth, what is the growth rate of real GDP per capita?

Accepted Answer

A)  0% 
B)  1% 
C)  5% 
D)  10% 
A)  0% 
B)  1% 
C)  5% 
D)  10%

Question 6

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

Accepted Answer

A)  $111,360 million. 
B)  $128,800 million. 
C)  $139,440 million. 
D) $141,640 million. 
A)  $111,360 million. 
B)  $128,800 million. 
C)  $139,440 million. 
D) $141,640 million.

Question 7

Nominal GDP always grows faster than real GDP.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following represents the national spending approach to splitting GDP?

Accepted Answer

A)  Y = C + G + NX - M 
B)  Y = C + I + G 
C)  Y = C + I + G + NX 
D)  Y = C + I + G - NX 
A)  Y = C + G + NX - M 
B)  Y = C + I + G 
C)  Y = C + I + G + NX 
D)  Y = C + I + G - NX

Question 9

Use the following to answer questions: Table: Economic Data $$\begin{array} { l c } 
\hline \text { Component of GDP } & \text { Amount } \
\hline \text { Consumption } & \$ 875.5 \
\text { Investment } & 415.5 \
\text { Wages and salaries } & 794.8 \
\text { Rent } & 300.2 \
\text { Profit } & 391 \
\text { Government Purchases } & 380 \
\text { Interest } & 345 \
\text { Exports } & 520 \
\text { Imports } & 360 \
\hline
\end{array}$$
-(Table: Economic Data) Based on the data in the table, what is the GDP for this economy based on the factor income approach?

Accepted Answer

A)  $1,486 
B)  $1,831 
C)  $1,901.5 
D)  $2,246.5 
A)  $1,486 
B)  $1,831 
C)  $1,901.5 
D)  $2,246.5

Question 10

National wealth and GDP are two names for the same thing.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer questions: Table: Components of GDP $$\begin{array} { l r } 
\hline \text { Private investment } & \$ 1,640 \text { billion } \
\text { Government spending } & 2,872 \text { billion } \
\text { Profits } & 1,565 \text { billion } \
\text { Consumption spending } & 9,913 \text { billion } \
\text { Wages } & 3,574 \text { billion } \
\text { Exports } & 1,520 \text { billion } \
\text { Imports } & 1,890 \text { billion } \
\hline
\end{array}$$
-(Table: Compo?nents of GDP) Use the data in this table to calculate the contribution of rent and interest income to GDP.

Accepted Answer

A)  $6,032 billion 
B)  $8,916 billion 
C)  $10,806 billion 
D)  $14,380 billion 
A)  $6,032 billion 
B)  $8,916 billion 
C)  $10,806 billion 
D)  $14,380 billion

Question 12

GDP per capita is GDP divided by:

Accepted Answer

A)  population. 
B)  the price level. 
C)  the inflation rate. 
D)  the unemployment rate. 
A)  population. 
B)  the price level. 
C)  the inflation rate. 
D)  the unemployment rate.

Question 13

Final goods are goods:

Accepted Answer

A)  used to produce other goods. 
B)  consumed or held in personal inventories. 
C)  used up in the production process. 
D)  that cannot be exported. 
A)  used to produce other goods. 
B)  consumed or held in personal inventories. 
C)  used up in the production process. 
D)  that cannot be exported.

Question 14

GDP is calculated by:

Accepted Answer

A)  adding the quantities of all goods and services in an economy. 
B)  adding the prices of all goods and services in an economy. 
C)  dividing the quantity of all goods and services by their prices and adding together the results. 
D)  multiplying the quantity of all goods and services by their prices and adding together the results. 
A)  adding the quantities of all goods and services in an economy. 
B)  adding the prices of all goods and services in an economy. 
C)  dividing the quantity of all goods and services by their prices and adding together the results. 
D)  multiplying the quantity of all goods and services by their prices and adding together the results.

Question 15

The difference between nominal GDP and real GDP is that nominal GDP:

Accepted Answer

A)  measures the total value of only final goods and services, whereas real GDP measures the value of all goods and services, both intermediate and final. 
B)  measures a country's production of final goods and services at current market prices, whereas real GDP measures a country's production of final goods and services at the same prices in all years. 
C)  is measured in dollar terms, whereas real GDP is measured in terms of numbers of goods and services produced. 
D)  measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices. 
A)  measures the total value of only final goods and services, whereas real GDP measures the value of all goods and services, both intermediate and final. 
B)  measures a country's production of final goods and services at current market prices, whereas real GDP measures a country's production of final goods and services at the same prices in all years. 
C)  is measured in dollar terms, whereas real GDP is measured in terms of numbers of goods and services produced. 
D)  measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices.

Question 16

Net exports will be negative if imports exceed exports.

Accepted Answer

A) True 
 B)False

Question 17

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. If 2000 prices are used in the calculation of real GDP, the GDP deflator for 2010 is:

Accepted Answer

A) 10. 
B) 90.9. 
C) 110. 
D) 900. 
A) 10. 
B) 90.9. 
C) 110. 
D) 900.

Question 18

GDP is an accurate measure of both the standard of living and the distribution of income within a country.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would NOT be included in this year's GDP?

Accepted Answer

A)  Tom and Amy pay $75 for a meal in a restaurant. 
B)  Sarah pays her accountant $200 to do her taxes. 
C)  Jim mows his neighbor's lawn as a favor. 
D)  Megan buys a new Coach purse. 
A)  Tom and Amy pay $75 for a meal in a restaurant. 
B)  Sarah pays her accountant $200 to do her taxes. 
C)  Jim mows his neighbor's lawn as a favor. 
D)  Megan buys a new Coach purse.

Question 20

The measure of GDP that has NOT been adjusted for changes in prices is called:

Accepted Answer

A)  annual GDP 
B)  nominal GDP 
C)  real GDP 
D)  aggregate GDP 
A)  annual GDP 
B)  nominal GDP 
C)  real GDP 
D)  aggregate GDP

Which of these transactions occurring in 2011 would contribute to GDP for 2011?

Explain the difference between real GDP and nominal GDP.

Which of these goods is an intermediate good that would NOT be counted in GDP in the year it is produced?

If a country's GDP per capita rises, this means that:

If a country has 5% real GDP growth and 5% population growth, what is the growth rate of real GDP per capita?

Nominal GDP always grows faster than real GDP.

Which of the following represents the national spending approach to splitting GDP?

National wealth and GDP are two names for the same thing.

GDP per capita is GDP divided by:

Final goods are goods:

GDP is calculated by:

The difference between nominal GDP and real GDP is that nominal GDP:

Net exports will be negative if imports exceed exports.

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. If 2000 prices are used in the calculation of real GDP, the GDP deflator for 2010 is:

GDP is an accurate measure of both the standard of living and the distribution of income within a country.

Which of the following would NOT be included in this year's GDP?

The measure of GDP that has NOT been adjusted for changes in prices 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

Which of these transactions occurring in 2011 would contribute to GDP for 2011?

Explain the difference between real GDP and nominal GDP.

Which of these goods is an intermediate good that would NOT be counted in GDP in the year it is produced?

If a country's GDP per capita rises, this means that:

If a country has 5% real GDP growth and 5% population growth, what is the growth rate of real GDP per capita?

Nominal GDP always grows faster than real GDP.

Which of the following represents the national spending approach to splitting GDP?

National wealth and GDP are two names for the same thing.

GDP per capita is GDP divided by:

Final goods are goods:

GDP is calculated by:

The difference between nominal GDP and real GDP is that nominal GDP:

Net exports will be negative if imports exceed exports.

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. If 2000 prices are used in the calculation of real GDP, the GDP deflator for 2010 is:

GDP is an accurate measure of both the standard of living and the distribution of income within a country.

Which of the following would NOT be included in this year's GDP?

The measure of GDP that has NOT been adjusted for changes in prices 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