Question 1

Which of the following items is included in U.S. GDP?

Accepted Answer

A) the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B) the value of illegally-produced goods and services 
C) the value of cars and trucks produced in foreign countries and sold in the U.S. 
D) None of the above is included in U.S. GDP. 
A) the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B) the value of illegally-produced goods and services 
C) the value of cars and trucks produced in foreign countries and sold in the U.S. 
D) None of the above is included in U.S. GDP.

Question 2

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

Accepted Answer

A) $24,450. 
B) $11,550. 
C) $15,300. 
D) $20,700. 
A) $24,450. 
B) $11,550. 
C) $15,300. 
D) $20,700.

Question 3

If real GDP is higher in one country than in another, then we can be sure that the standard of living is higher in the country with the higher real GDP.

Accepted Answer

A) True 
 B)False

Question 4

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

Accepted Answer

A) 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120, and this indicates that the price level has increased by 20 percent since the base year. 
D) 120, and this indicates that the price level has increased by 120 percent since the base year. 
A) 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120, and this indicates that the price level has increased by 20 percent since the base year. 
D) 120, and this indicates that the price level has increased by 120 percent since the base year.

Question 5

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 6

In a simple circular-flow diagram, firms

Accepted Answer

A) purchase resources from households. 
B) purchase the output produced by households. 
C) receive income by selling resources to households. 
D) All of the above are correct. 
A) purchase resources from households. 
B) purchase the output produced by households. 
C) receive income by selling resources to households. 
D) All of the above are correct.

Question 7

Additions to inventory subtract from GDP, and when the goods in inventory are sold, the reductions in inventory add to GDP.

Accepted Answer

A) True 
 B)False

Question 8

A transfer payment is

Accepted Answer

A) a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B) a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C) a form of government spending that is not made in exchange for a currently produced good or service. 
D) the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure. 
A) a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B) a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C) a form of government spending that is not made in exchange for a currently produced good or service. 
D) the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.

Question 9

Which of the following always uses prices and quantities from the same period?

Accepted Answer

A) both nominal and real GDP. 
B) nominal GDP but not real GDP. 
C) real GDP but not nominal GDP. 
D) neither nominal or real GDP. 
A) both nominal and real GDP. 
B) nominal GDP but not real GDP. 
C) real GDP but not nominal GDP. 
D) neither nominal or real GDP.

Question 10

Explain the pattern seen between GDP per person and quality of life measures such as life expectancy, literacy, and Internet usage.

Accepted Answer

They are closely associated; c

Question 11

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 12

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Accepted Answer

A) Janet's purchase and ABC Bakery's purchase. 
B) ABC Bakery's purchase but not Janet's purchase. 
C) Janet's purchase but not ABC Bakery's purchase. 
D) Neither Janet's purchase nor ABC Bakery's purchase. 
A) Janet's purchase and ABC Bakery's purchase. 
B) ABC Bakery's purchase but not Janet's purchase. 
C) Janet's purchase but not ABC Bakery's purchase. 
D) Neither Janet's purchase nor ABC Bakery's purchase.

Question 13

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 .
Prices and Quantities  
-Refer to Table 23-6. From 2012 to 2013, this country's output grew

Accepted Answer

A) 28.2%. 
B) 29.0%. 
C) 29.6%. 
D) 73.9%. 
A) 28.2%. 
B) 29.0%. 
C) 29.6%. 
D) 73.9%.

Question 14

Table 23-2
The table below contains data for country A for the year 2010.  
-Refer to Table 23-2. What were country A's imports in 2010?

Accepted Answer

A) -$32 
B) $32 
C) $88 
D) $120 
A) -$32 
B) $32 
C) $88 
D) $120

Question 15

Which of the following is included in GDP?

Accepted Answer

A) marijuana purchased legally in Colorado. 
B) marijuana purchased illegally from a drug dealer. 
C) marijuana produced and consumed by a man in his attic 
D) All of the above are included in GDP. 
A) marijuana purchased legally in Colorado. 
B) marijuana purchased illegally from a drug dealer. 
C) marijuana produced and consumed by a man in his attic 
D) All of the above are included in GDP.

Question 16

Changes in inventory are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 17

If in some year real GDP was $5 trillion and the GDP deflator was 200, what was nominal GDP?

Accepted Answer

A) $2.5 trillion. 
B) $10 trillion. 
C) $40 trillion. 
D) $100 trillion. 
A) $2.5 trillion. 
B) $10 trillion. 
C) $40 trillion. 
D) $100 trillion.

Question 18

Real GDP will increase

Accepted Answer

A) only when prices increase. 
B) only when output increases. 
C) when prices increase or output increases. 
D) All of the above are correct. 
A) only when prices increase. 
B) only when output increases. 
C) when prices increase or output increases. 
D) All of the above are correct.

Question 19

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

Accepted Answer

A) 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120, and this indicates that the price level has increased by 20 percent since the base year. 
D) 120, and this indicates that the price level has increased by 120 percent since the base year. 
A) 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120, and this indicates that the price level has increased by 20 percent since the base year. 
D) 120, and this indicates that the price level has increased by 120 percent since the base year.

Question 20

A recession has traditionally been defined as a period during which

Accepted Answer

A) nominal GDP declines for two consecutive quarters. 
B) nominal GDP declines for four consecutive quarters. 
C) real GDP declines for two consecutive quarters. 
D) real GDP declines for four consecutive quarters. 
A) nominal GDP declines for two consecutive quarters. 
B) nominal GDP declines for four consecutive quarters. 
C) real GDP declines for two consecutive quarters. 
D) real GDP declines for four consecutive quarters.

Exam 23: Measuring a Nation S Income

Which of the following items is included in U.S. GDP?

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

If real GDP is higher in one country than in another, then we can be sure that the standard of living is higher in the country with the higher real GDP.

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

In a simple circular-flow diagram, firms

Additions to inventory subtract from GDP, and when the goods in inventory are sold, the reductions in inventory add to GDP.

A transfer payment is

Which of the following always uses prices and quantities from the same period?

Explain the pattern seen between GDP per person and quality of life measures such as life expectancy, literacy, and Internet usage.

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GDP.

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. From 2012 to 2013, this country's output grew

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What were country A's imports in 2010?

Which of the following is included in GDP?

Changes in inventory are included in the investment component of GDP.

If in some year real GDP was $5 trillion and the GDP deflator was 200, what was nominal GDP?

Real GDP will increase

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

A recession has traditionally been defined as a period during which

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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