Question 1

Net domestic product is the total value of

Accepted Answer

A) all final goods and services produced within a country's borders in a year. 
B) only intermediate goods produced within a country's borders in a year. 
C) all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D) only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E) all final goods and services produced within a country's borders in a year minus capital consumption allowance. 
A) all final goods and services produced within a country's borders in a year. 
B) only intermediate goods produced within a country's borders in a year. 
C) all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D) only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E) all final goods and services produced within a country's borders in a year minus capital consumption allowance. E

Question 2

The best reason economists take only final goods and services into account when calculating GDP is that

Accepted Answer

A) this is the way things have always been done, but there is no particular reason why. 
B) they want to avoid the problem of final counting. 
C) they want to avoid the problem of double counting. 
D) this is the only way it can be done. 
A) this is the way things have always been done, but there is no particular reason why. 
B) they want to avoid the problem of final counting. 
C) they want to avoid the problem of double counting. 
D) this is the only way it can be done. C

Question 3

If GDP in year 1 is the same dollar amount as the GDP in year 2, does it follow that Real GDP in year 1 is the same as Real GDP in year 2?

Accepted Answer

A) Yes, since prices must necessarily be the same in the two years. 
B) No, since equal GDP figures do not account for population. 
C) No, since prices may not be the same in the two years. 
D) Yes, since equal GDP figures do account for a change in the quality of goods produced in the two years. 
E) none of the above 
A) Yes, since prices must necessarily be the same in the two years. 
B) No, since equal GDP figures do not account for population. 
C) No, since prices may not be the same in the two years. 
D) Yes, since equal GDP figures do account for a change in the quality of goods produced in the two years. 
E) none of the above C

Question 4

If the GDP in one year is greater than it was in the previous year, then economic growth must have occurred.

Accepted Answer

A) True 
 B)False

Question 5

Two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

Accepted Answer

A) expenditure; income 
B) expenditure; national product 
C) national product; income 
D) net national product; personal income 
A) expenditure; income 
B) expenditure; national product 
C) national product; income 
D) net national product; personal income

Question 6

Explain why GDP figures do not necessarily measure happiness or well-being.

Accepted Answer

Well-being and happiness are subjective.

Question 7

Given that GDP is a measure of what is produced in a country, explain how the expenditure approach can measure GDP. How are items produced, but not yet sold, accounted for in the expenditure approach?

Accepted Answer

The expenditure approach measures GDP by

Question 8

Exhibit 7-1
  
-Refer to Exhibit 7-1. What is the value of national income?

Accepted Answer

A) $4,351 
B) $4,252 
C) $4,403 
D) $2,996 
E) $4,542 
A) $4,351 
B) $4,252 
C) $4,403 
D) $2,996 
E) $4,542

Question 9

Real GDP is the value of all __________ goods and services produced in a given year in __________ prices.

Accepted Answer

A) intermediate; that year's 
B) intermediate; base-year 
C) final; that year's 
D) final; base-year 
A) intermediate; that year's 
B) intermediate; base-year 
C) final; that year's 
D) final; base-year

Question 10

Personal income is

Accepted Answer

A) equal to GDP. 
B) that portion of national income that can be used for consumption and saving. 
C) the sum of all payments to suppliers of the factors of production. 
D) the amount of income that individuals actually receive. 
E) another term for disposable income. 
A) equal to GDP. 
B) that portion of national income that can be used for consumption and saving. 
C) the sum of all payments to suppliers of the factors of production. 
D) the amount of income that individuals actually receive. 
E) another term for disposable income.

Question 11

Of the two types of investment (fixed and inventory), fixed investment is the larger of the two.

Accepted Answer

A) True 
 B)False

Question 12

Draw an appropriate diagram to represent the business cycle and label each of the five phases. Provide a brief description of each phase.

Accepted Answer

The five phases of the business cycle ar

Question 13

Gross Domestic Product (GDP) is the total market value of all

Accepted Answer

A) final goods and services produced annually within a country's borders. 
B) final and intermediate goods and services produced annually within a country's borders. 
C) intermediate goods and services produced annually within a country's borders. 
D) final goods produced every month within a country's borders. 
A) final goods and services produced annually within a country's borders. 
B) final and intermediate goods and services produced annually within a country's borders. 
C) intermediate goods and services produced annually within a country's borders. 
D) final goods produced every month within a country's borders.

Question 14

The research of economists Stevenson and Wolfers tends to support the Easterlin paradox.

Accepted Answer

A) True 
 B)False

Question 15

National income equals

Accepted Answer

A) wages + salaries + corporate profits + net income. 
B) compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C) compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D) the monetary value of fringe benefits + tips + wages + profits + salaries. 
E) none of the above 
A) wages + salaries + corporate profits + net income. 
B) compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C) compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D) the monetary value of fringe benefits + tips + wages + profits + salaries. 
E) none of the above

Question 16

Which of the following statements is true?

Accepted Answer

A) Government purchases is the largest component of GDP. 
B) Net exports are equal to exports plus imports. 
C) U.S.imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States. 
D) Government purchases includes the spending on goods and services by all levels of government (federal, state, and local). 
E) c and d 
A) Government purchases is the largest component of GDP. 
B) Net exports are equal to exports plus imports. 
C) U.S.imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States. 
D) Government purchases includes the spending on goods and services by all levels of government (federal, state, and local). 
E) c and d

Question 17

Exhibit 7-5
Economic Data for Country Z
  
-Refer to Exhibit 7-5. What was Country Z's economic growth rate between year 3 and year 4?

Accepted Answer

A) 6.1% 
B) 2.3% 
C) 3.0% 
D) 18.2% 
A) 6.1% 
B) 2.3% 
C) 3.0% 
D) 18.2%

Question 18

When computing national income, which of the following is included in compensation of employees?

Accepted Answer

A) wages and salaries paid to employees 
B) employers' contributions to Social Security and employee benefit plans 
C) the monetary value of fringe benefits, tips, and paid vacations 
D) all of the above 
A) wages and salaries paid to employees 
B) employers' contributions to Social Security and employee benefit plans 
C) the monetary value of fringe benefits, tips, and paid vacations 
D) all of the above

Question 19

Which of the following is a nonmarket good?

Accepted Answer

A) the corn you grow in your home garden and consume 
B) the clothes you sew and sell to a neighbor who pays you by writing you a check 
C) the self-portrait hanging in your den 
D) a and c 
E) a, b, and c 
A) the corn you grow in your home garden and consume 
B) the clothes you sew and sell to a neighbor who pays you by writing you a check 
C) the self-portrait hanging in your den 
D) a and c 
E) a, b, and c

Question 20

Net exports equals

Accepted Answer

A) exports divided by imports. 
B) the sum of exports and imports. 
C) exports minus imports. 
D) exports during the year. 
E) none of the above 
A) exports divided by imports. 
B) the sum of exports and imports. 
C) exports minus imports. 
D) exports during the year. 
E) none of the above

Exam 7: Macroeconomic Measurements Part II Gdp and Real Gdp

Net domestic product is the total value of

The best reason economists take only final goods and services into account when calculating GDP is that

If GDP in year 1 is the same dollar amount as the GDP in year 2, does it follow that Real GDP in year 1 is the same as Real GDP in year 2?

If the GDP in one year is greater than it was in the previous year, then economic growth must have occurred.

Two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

Explain why GDP figures do not necessarily measure happiness or well-being.

Given that GDP is a measure of what is produced in a country, explain how the expenditure approach can measure GDP. How are items produced, but not yet sold, accounted for in the expenditure approach?

Exhibit 7-1 -Refer to Exhibit 7-1. What is the value of national income?

Real GDP is the value of all __________ goods and services produced in a given year in __________ prices.

Personal income is

Of the two types of investment (fixed and inventory), fixed investment is the larger of the two.

Draw an appropriate diagram to represent the business cycle and label each of the five phases. Provide a brief description of each phase.

Gross Domestic Product (GDP) is the total market value of all

The research of economists Stevenson and Wolfers tends to support the Easterlin paradox.

National income equals

Which of the following statements is true?

Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5. What was Country Z's economic growth rate between year 3 and year 4?

When computing national income, which of the following is included in compensation of employees?

Which of the following is a nonmarket good?

Net exports equals

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Two ways of measuring Gross Domestic Product are the approach and the approach.

Real GDP is the value of all goods and services produced in a given year in prices.