Question 1

List and explain the two different approaches used to measure GDP.

Accepted Answer

The two different approaches are: the ex

Question 2

Which of the following statements is false?

Accepted Answer

A) For purposes of computing GDP, the purchases of new residential housing are considered investment although it is undertaken by the household sector. 
B) Consumption includes spending on durable goods but not spending on services. 
C) Investment includes fixed investment but not inventory investment. 
D) b and c 
A) For purposes of computing GDP, the purchases of new residential housing are considered investment although it is undertaken by the household sector. 
B) Consumption includes spending on durable goods but not spending on services. 
C) Investment includes fixed investment but not inventory investment. 
D) b and c

Question 3

A complete business cycle can be measured from peak to peak.

Accepted Answer

A) True 
 B)False

Question 4

In the United States, the largest expenditure component in GDP is

Accepted Answer

A) gross private domestic investment. 
B) government purchases of goods and services. 
C) consumption expenditures. 
D) net exports. 
E) none of the above 
A) gross private domestic investment. 
B) government purchases of goods and services. 
C) consumption expenditures. 
D) net exports. 
E) none of the above

Question 5

Which of the following is a macroeconomic measurement used to gauge macroeconomic activity?

Accepted Answer

A) Net domestic product 
B) National income 
C) Personal income 
D) Disposable income 
E) all of the above 
A) Net domestic product 
B) National income 
C) Personal income 
D) Disposable income 
E) all of the above

Question 6

Capital consumption allowance refers to

Accepted Answer

A) capital goods being used up in production through natural wear, obsolescence, and accidental destruction. 
B) people sending money between countries. 
C) the purchase of used factories. 
D) the purchase of goods that allow households to consume more services. 
A) capital goods being used up in production through natural wear, obsolescence, and accidental destruction. 
B) people sending money between countries. 
C) the purchase of used factories. 
D) the purchase of goods that allow households to consume more services.

Question 7

Sophia just bought shares of IBM stock for $25,000 and paid a $350 commission to her broker. How did this impact GDP?

Accepted Answer

A) GDP increased by $25,350 
B) GDP increased by $350 
C) GDP increased by $25,000 
D) GDP increased by $24,650 
E) it had no impact on GDP 
A) GDP increased by $25,350 
B) GDP increased by $350 
C) GDP increased by $25,000 
D) GDP increased by $24,650 
E) it had no impact on GDP

Question 8

Countries with a large GDP must also have a large per-capita GDP.

Accepted Answer

A) True 
 B)False

Question 9

GDP is computed using base-year dollars.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is false?

Accepted Answer

A) Real GDP in the United States was approximately seven times greater in 2012 than in 1950. 
B) The U.S.population was approximately twice as large in 2012 than in 1950. 
C) Nominal GDP in the United States was approximately seven times greater in 2012 than in 1950. 
D) Real GDP is GDP adjusted for price changes. 
A) Real GDP in the United States was approximately seven times greater in 2012 than in 1950. 
B) The U.S.population was approximately twice as large in 2012 than in 1950. 
C) Nominal GDP in the United States was approximately seven times greater in 2012 than in 1950. 
D) Real GDP is GDP adjusted for price changes.

Question 11

Disposable income equals national income minus personal taxes.

Accepted Answer

A) True 
 B)False

Question 12

Personal income is equal to consumption plus saving.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that consumption spending is $3,200 billion, spending on durable goods is $800 billion, and spending on services is $1,800 billion. What does spending on nondurable goods equal?

Accepted Answer

A) $5,800 billion 
B) $600 billion 
C) $2,400 billion 
D) $3,200 billion 
E) There is not enough information to answer this question. 
A) $5,800 billion 
B) $600 billion 
C) $2,400 billion 
D) $3,200 billion 
E) There is not enough information to answer this question.

Question 14

Suppose you have data on durable goods, nondurable goods, fixed investment, government purchases, exports, and imports. Can you compute GDP?

Accepted Answer

A) No, since data on services and profits are missing. 
B) No, since data on inventory investment and profits are missing. 
C) No, since data on inventory investment and services are missing. 
D) No, since data on services and dividends are missing. 
E) Yes, all of the necessary components of GDP are given. 
A) No, since data on services and profits are missing. 
B) No, since data on inventory investment and profits are missing. 
C) No, since data on inventory investment and services are missing. 
D) No, since data on services and dividends are missing. 
E) Yes, all of the necessary components of GDP are given.

Question 15

Exhibit 7-3
  
-Refer to Exhibit 7-3. Investment is equal to

Accepted Answer

A) $850. 
B) $1,250. 
C) $200. 
D) $2,200. 
E) $1,050. 
A) $850. 
B) $1,250. 
C) $200. 
D) $2,200. 
E) $1,050.

Question 16

Exhibit 7-6
Economic Data for Country ABC
   ​
-Refer to Exhibit 7-6. Given the information provided in this table, did country ABC experience a recession during 2019 (based upon the standard definition of a recession)?

Accepted Answer

A) Yes, country ABC experienced a recession in 2019 since its GDP declined in two consecutive quarters. 
B) Yes, country ABC experienced a recession in 2019 since its GDP declined in three consecutive quarters. 
C) No, country ABC did not experience a recession in 2019 because its GDP did not decline four consecutive quarters. 
D) We cannot say whether or not country ABC is in a recession without knowing what its Real GDP was each quarter. 
A) Yes, country ABC experienced a recession in 2019 since its GDP declined in two consecutive quarters. 
B) Yes, country ABC experienced a recession in 2019 since its GDP declined in three consecutive quarters. 
C) No, country ABC did not experience a recession in 2019 because its GDP did not decline four consecutive quarters. 
D) We cannot say whether or not country ABC is in a recession without knowing what its Real GDP was each quarter.

Question 17

Sales tax is an example of an indirect business tax.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 7-1
  
-Refer to Exhibit 7-1. What is the value of gross domestic product?

Accepted Answer

A) $6,062 
B) $5,731 
C) $3,072 
D) $6,382 
E) $2,637 
A) $6,062 
B) $5,731 
C) $3,072 
D) $6,382 
E) $2,637

Question 19

Is it possible for a country with a relatively large GDP to have a relatively small per-capita GDP?

Accepted Answer

A) Yes, since the country with a relatively large GDP could also have a relatively large population. 
B) No, since countries with a relatively large GDP (such as the United States and Japan) also have a relatively high per-capita GDP. 
C) Yes, but only under the condition that the country "produces" relatively more "bads" than other countries. 
D) Yes, since government transfer payments may be exorbitantly high in the country with the relatively high GDP. 
E) There is not enough information to answer this question. 
A) Yes, since the country with a relatively large GDP could also have a relatively large population. 
B) No, since countries with a relatively large GDP (such as the United States and Japan) also have a relatively high per-capita GDP. 
C) Yes, but only under the condition that the country "produces" relatively more "bads" than other countries. 
D) Yes, since government transfer payments may be exorbitantly high in the country with the relatively high GDP. 
E) There is not enough information to answer this question.

Question 20

Exhibit 7-3
  
-Refer to Exhibit 7-3. Net exports is equal to

Accepted Answer

A) $200. 
B) -$200. 
C) $600. 
D) -$1,400. 
E) $1,400 
A) $200. 
B) -$200. 
C) $600. 
D) -$1,400. 
E) $1,400

Exam 7: Macroeconomic Measurements Part II Gdp and Real Gdp

List and explain the two different approaches used to measure GDP.

Which of the following statements is false?

A complete business cycle can be measured from peak to peak.

In the United States, the largest expenditure component in GDP is

Which of the following is a macroeconomic measurement used to gauge macroeconomic activity?

Capital consumption allowance refers to

Sophia just bought shares of IBM stock for $25,000 and paid a $350 commission to her broker. How did this impact GDP?

Countries with a large GDP must also have a large per-capita GDP.

GDP is computed using base-year dollars.

Which of the following statements is false?

Disposable income equals national income minus personal taxes.

Personal income is equal to consumption plus saving.

Suppose that consumption spending is $3,200 billion, spending on durable goods is $800 billion, and spending on services is $1,800 billion. What does spending on nondurable goods equal?

Suppose you have data on durable goods, nondurable goods, fixed investment, government purchases, exports, and imports. Can you compute GDP?

Exhibit 7-3 -Refer to Exhibit 7-3. Investment is equal to

Exhibit 7-6 Economic Data for Country ABC ​ -Refer to Exhibit 7-6. Given the information provided in this table, did country ABC experience a recession during 2019 (based upon the standard definition of a recession)?

Sales tax is an example of an indirect business tax.

Exhibit 7-1 -Refer to Exhibit 7-1. What is the value of gross domestic product?

Is it possible for a country with a relatively large GDP to have a relatively small per-capita GDP?

Exhibit 7-3 -Refer to Exhibit 7-3. Net exports is equal to

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Exhibit 7-6 Economic Data for Country ABC -Refer to Exhibit 7-6. Given the information provided in this table, did country ABC experience a recession during 2019 (based upon the standard definition of a recession)?