Question 1

Which of the following is not a correct statement about the growth of real GDP in the U.S. economy?

Accepted Answer

A) Real GDP in 2009 was almost four times its 1965 level. 
B) Growth was steady between 1965 and 2009. 
C) Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did. 
D) The output of goods and services produced grew on average about 3 percent per year between 1965 and 2009. 
A) Real GDP in 2009 was almost four times its 1965 level. 
B) Growth was steady between 1965 and 2009. 
C) Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did. 
D) The output of goods and services produced grew on average about 3 percent per year between 1965 and 2009.

Question 2

Which of the following items is counted as part of government purchases?

Accepted Answer

A) The federal government pays $2,000 in Social Security benefits to a retired person. 
B) The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards. 
C) The state of Nebraska pays $1,000 to help a low-income family pay its medical bills. 
D) All of the above are correct. 
A) The federal government pays $2,000 in Social Security benefits to a retired person. 
B) The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards. 
C) The state of Nebraska pays $1,000 to help a low-income family pay its medical bills. 
D) All of the above are correct.

Question 3

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

Accepted Answer

A) GDP increases by $3.00. 
B) GDP increases by $5.00. 
C) GDP increases by $6.00. 
D) GDP increases by $7.00. 
A) GDP increases by $3.00. 
B) GDP increases by $5.00. 
C) GDP increases by $6.00. 
D) GDP increases by $7.00.

Question 4

Consumer goods that are produced, go into inventory, and are not sold during the current period are

Accepted Answer

A) counted as intermediate goods and so are not included in current period GDP. 
B) counted in current period GDP only if the firm that produced them sells them to another firm. 
C) included in current period GDP as inventory investment. 
D) included in current period GDP as consumption. 
A) counted as intermediate goods and so are not included in current period GDP. 
B) counted in current period GDP only if the firm that produced them sells them to another firm. 
C) included in current period GDP as inventory investment. 
D) included in current period GDP as consumption.

Question 5

Table 23-3
The table below contains data for the country of Crete for the year 2010.  
-Refer to Table 23-3. What were Crete's government purchases in 2010?

Accepted Answer

A) ​$1130 
B) ​$1601 
C) ​$1837 
D) ​$2544 
A) ​$1130 
B) ​$1601 
C) ​$1837 
D) ​$2544

Question 6

GDP does not reflect

Accepted Answer

A) the value of leisure. 
B) the value of goods and services produced at home. 
C) the quality of the environment. 
D) All of the above are correct. 
A) the value of leisure. 
B) the value of goods and services produced at home. 
C) the quality of the environment. 
D) All of the above are correct.

Question 7

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

Accepted Answer

A) $6.7 billion. 
B) $15 billion. 
C) $21.6 billion. 
D) $38 billion. 
A) $6.7 billion. 
B) $15 billion. 
C) $21.6 billion. 
D) $38 billion.

Question 8

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Accepted Answer

A) True 
 B)False

Question 9

The residents of Ireland earn $200 million of income from abroad. Residents of other countries earn $300 million in Ireland. Therefore, Ireland's

Accepted Answer

A) net factor payments from abroad are positive, and its GDP is larger than its GNP. 
B) net factor payments from abroad are positive, and its GNP is larger than its GDP. 
C) net factor payments from abroad are negative, and its GDP is larger than its GNP. 
D) net factor payments from abroad are negative, and its GNP is larger than its GDP. 
A) net factor payments from abroad are positive, and its GDP is larger than its GNP. 
B) net factor payments from abroad are positive, and its GNP is larger than its GDP. 
C) net factor payments from abroad are negative, and its GDP is larger than its GNP. 
D) net factor payments from abroad are negative, and its GNP is larger than its GDP.

Question 10

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fries are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Accepted Answer

A) nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 95.45. 
B) nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77. 
C) nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45. 
D) nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 104.77. 
A) nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 95.45. 
B) nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77. 
C) nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45. 
D) nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 104.77.

Question 11

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 12

In the United States in 2015, government purchases of goods and services were

Accepted Answer

A) larger than consumption, but smaller than investment. 
B) larger than investment, but smaller than consumption. 
C) smaller than both consumption and investment. 
D) larger than both consumption and investment. 
A) larger than consumption, but smaller than investment. 
B) larger than investment, but smaller than consumption. 
C) smaller than both consumption and investment. 
D) larger than both consumption and investment.

Question 13

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

Question 14

If Brazil buys $100 million of tractors from the U.S., then U.S. net exports will decrease.

Accepted Answer

A) True 
 B)False

Question 15

A macroeconomist is interested in

Accepted Answer

A) explaining how changes in sellers' behavior affect prices of a particular good. 
B) explaining price changes in a particular market. 
C) explaining why the unemployment rate is higher. 
D) All of the above are correct. 
A) explaining how changes in sellers' behavior affect prices of a particular good. 
B) explaining price changes in a particular market. 
C) explaining why the unemployment rate is higher. 
D) All of the above are correct.

Question 16

Which of the following is included in the investment component of GDP?

Accepted Answer

A) spending on new residential construction and spending on stocks and bonds 
B) spending on new residential construction but not spending on stocks and bonds 
C) spending on stocks and bonds but not spending on new residential construction 
D) neither spending on stocks and bonds nor spending on new residential construction 
A) spending on new residential construction and spending on stocks and bonds 
B) spending on new residential construction but not spending on stocks and bonds 
C) spending on stocks and bonds but not spending on new residential construction 
D) neither spending on stocks and bonds nor spending on new residential construction

Question 17

A good is produced by a firm in 2009, added to the firm's inventory in 2010, and sold to a household in 2010. As a result, on net,

Accepted Answer

A) 2009 GDP increased and 2010 GDP decreased. 
B) 2009 GDP decreased and 2010 GDP increased. 
C) 2009 GDP did not change and 2010 GDP increased. 
D) 2009 GDP increased and 2010 GDP did not change. 
A) 2009 GDP increased and 2010 GDP decreased. 
B) 2009 GDP decreased and 2010 GDP increased. 
C) 2009 GDP did not change and 2010 GDP increased. 
D) 2009 GDP increased and 2010 GDP did not change.

Question 18

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 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 19

Which of the following is included in Singapore's GDP?

Accepted Answer

A) The value of production by a Singaporean working in the U.S. 
B) The value of production by an American working in Singapore 
C) The value of production by a Singaporean that crosses the border to work in Malaysia. 
D) All of the above are correct. 
A) The value of production by a Singaporean working in the U.S. 
B) The value of production by an American working in Singapore 
C) The value of production by a Singaporean that crosses the border to work in Malaysia. 
D) All of the above are correct.

Question 20

In the national income accounts, depreciation is called

Accepted Answer

A) "consumption of fixed capital." 
B) "negative investment." 
C) "diminished value." 
D) "loss due to wear." 
A) "consumption of fixed capital." 
B) "negative investment." 
C) "diminished value." 
D) "loss due to wear."

Exam 23: Measuring a Nation S Income

Which of the following is not a correct statement about the growth of real GDP in the U.S. economy?

Which of the following items is counted as part of government purchases?

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

Consumer goods that are produced, go into inventory, and are not sold during the current period are

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's government purchases in 2010?

GDP does not reflect

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

The residents of Ireland earn $200 million of income from abroad. Residents of other countries earn $300 million in Ireland. Therefore, Ireland's

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fries are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Changes in real GDP reflect only changes in the amounts being produced.

In the United States in 2015, government purchases of goods and services were

Periods during which real GDP rises are called recessions.

If Brazil buys $100 million of tractors from the U.S., then U.S. net exports will decrease.

A macroeconomist is interested in

Which of the following is included in the investment component of GDP?

A good is produced by a firm in 2009, added to the firm's inventory in 2010, and sold to a household in 2010. As a result, on net,

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Which of the following is included in Singapore's GDP?

In the national income accounts, depreciation is called

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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