Question 1

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 2

If an economy's GDP falls, then it must be the case that the economy's

Accepted Answer

A) income falls and saving rises. 
B) income and saving both fall. 
C) income falls and expenditure rises. 
D) income and expenditure both fall. 
A) income falls and saving rises. 
B) income and saving both fall. 
C) income falls and expenditure rises. 
D) income and expenditure both fall.

Question 3

​Suppose that you are planning to buy a new cellphone. Your choice is a new Samsung phone or HTC model. Samsung phones are manufactured in Korea and HTC phones are manufactured in Taiwan. Assuming that the price of each phone is the same, will your purchase of the Samsung or the HTC affect U.S. GDP differently?​

Accepted Answer

A) ​No, both have the same impact: your purchase will increase consumption expenditures and decrease net exports by the same amount. 
B) ​Yes. This depends upon which cellphone carrier you choose. 
C) ​No, because Samsung's production only affects Korea's GDP; and HTC's production only impacts Taiwan's GDP. 
D) Yes. The country from which a product is imported has different effects on U.S. GDP because it depends upon trade agreements with the countries. 
A) ​No, both have the same impact: your purchase will increase consumption expenditures and decrease net exports by the same amount. 
B) ​Yes. This depends upon which cellphone carrier you choose. 
C) ​No, because Samsung's production only affects Korea's GDP; and HTC's production only impacts Taiwan's GDP. 
D) Yes. The country from which a product is imported has different effects on U.S. GDP because it depends upon trade agreements with the countries.

Question 4

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Accepted Answer

A) True 
 B)False

Question 5

Consumption consists of spending by households on goods and services, with the exception of

Accepted Answer

A) purchases of intangible services. 
B) purchases of durable goods. 
C) purchases of new houses. 
D) spending on education. 
A) purchases of intangible services. 
B) purchases of durable goods. 
C) purchases of new houses. 
D) spending on education.

Question 6

GDP per person tells us the income and expenditure of the

Accepted Answer

A) richest person in the economy. 
B) poorest person in the economy. 
C) average person in the economy. 
D) entire economy. 
A) richest person in the economy. 
B) poorest person in the economy. 
C) average person in the economy. 
D) entire economy.

Question 7

Changes in real GDP reflect

Accepted Answer

A) only changes in prices. 
B) only changes in the amounts being produced. 
C) both changes in prices and changes in the amounts being produced. 
D) neither changes in prices nor changes in the amounts being produced. 
A) only changes in prices. 
B) only changes in the amounts being produced. 
C) both changes in prices and changes in the amounts being produced. 
D) neither changes in prices nor changes in the amounts being produced.

Question 8

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Accepted Answer

A) -$500 
B) -$700 
C) $700 
D) $500 
A) -$500 
B) -$700 
C) $700 
D) $500

Question 9

Table 23-11
Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year.  
-Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Accepted Answer

Nominal GD

Question 10

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A) Japan, Germany, United States 
B) Japan, United States, Germany 
C) Germany, United States, Japan 
D) United States, Japan, Germany 
A) Japan, Germany, United States 
B) Japan, United States, Germany 
C) Germany, United States, Japan 
D) United States, Japan, Germany

Question 11

Which of the following represents a transfer payment?

Accepted Answer

A) You transfer $1,000 from your bank account to a mutual fund. 
B) The government sends your grandfather his Social Security check. 
C) You make a payment to get legal documents showing you purchased a previously owned home. 
D) Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account. 
A) You transfer $1,000 from your bank account to a mutual fund. 
B) The government sends your grandfather his Social Security check. 
C) You make a payment to get legal documents showing you purchased a previously owned home. 
D) Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.

Question 12

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell. 
A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell.

Question 13

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Accepted Answer

A) True 
 B)False

Question 14

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Accepted Answer

A) GDP is not a useful measure of society's welfare. 
B) GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government. 
C) GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare. 
D) GDP is still the best measure of society's welfare because these other values cannot actually be measured. 
A) GDP is not a useful measure of society's welfare. 
B) GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government. 
C) GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare. 
D) GDP is still the best measure of society's welfare because these other values cannot actually be measured.

Question 15

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

A) then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B) then GDP will be higher, but consumption spending will be unchanged. 
C) then GDP will be unchanged, but consumption spending will be higher. 
D) then both GDP and consumption spending will be higher. 
A) then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. 
B) then GDP will be higher, but consumption spending will be unchanged. 
C) then GDP will be unchanged, but consumption spending will be higher. 
D) then both GDP and consumption spending will be higher.

Question 16

In the actual economy, households

Accepted Answer

A) spend all of their income. 
B) divide their income among spending, taxes, and saving. 
C) buy all goods and services produced in the economy. 
D) Both (a) and (c) are correct. 
A) spend all of their income. 
B) divide their income among spending, taxes, and saving. 
C) buy all goods and services produced in the economy. 
D) Both (a) and (c) are correct.

Question 17

Otherwise legal transactions that go unreported or unrecorded are called

Accepted Answer

A) the underground economy. 
B) the shadow economy. 
C) the informal economy. 
D) All of the above are correct. 
A) the underground economy. 
B) the shadow economy. 
C) the informal economy. 
D) All of the above are correct.

Question 18

​Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Accepted Answer

A) ​Italy's GDP. 
B) ​Italy's GDP and U.S. GDP, since Beth spent dollars buying the machine. 
C) ​U.S. GDP since she will have the machine with her at home in the U.S. 
D) ​Neither U.S. nor Italy's GDP, since the product was bought in one country and used in another. 
A) ​Italy's GDP. 
B) ​Italy's GDP and U.S. GDP, since Beth spent dollars buying the machine. 
C) ​U.S. GDP since she will have the machine with her at home in the U.S. 
D) ​Neither U.S. nor Italy's GDP, since the product was bought in one country and used in another.

Question 19

Which component of GDP includes spending on new structures and equipment?

Accepted Answer

The answer of Which component of GDP includes spending on...

Question 20

For an actual economy, total expenditures on goods and services by households does not equal GDP because

Accepted Answer

A) household spending exceeds their incomes.​ 
B) ​household expenditures on goods and services falls short of GDP, since household save for the future. 
C) ​household expenditures include only goods, since services are intangible and cannot be measured accurately. 
D) ​household expenditures on goods and services are made using borrowed funds. 
A) household spending exceeds their incomes.​ 
B) ​household expenditures on goods and services falls short of GDP, since household save for the future. 
C) ​household expenditures include only goods, since services are intangible and cannot be measured accurately. 
D) ​household expenditures on goods and services are made using borrowed funds.

Exam 23: Measuring a Nation S Income

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

If an economy's GDP falls, then it must be the case that the economy's

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Consumption consists of spending by households on goods and services, with the exception of

GDP per person tells us the income and expenditure of the

Changes in real GDP reflect

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Table 23-11 Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Which of the following represents a transfer payment?

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

If you buy a burger and fries at your favorite fast food restaurant,

In the actual economy, households

Otherwise legal transactions that go unreported or unrecorded are called

​Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Which component of GDP includes spending on new structures and equipment?

For an actual economy, total expenditures on goods and services by households does not equal GDP because

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

Applications: 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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases