Question 1

GDP is supposed to measure the goods ________ the United States.

Accepted Answer

A)  purchased in 
B)  produced in 
C)  imported to 
D)  exported to 
A)  purchased in 
B)  produced in 
C)  imported to 
D)  exported to

Question 2

The majority of spending in the government purchases category comes from the federal government.

Accepted Answer

A) True 
 B)False

Question 3

If in the third quarter of 2012 total investment spending was $4,768 billion and depreciation was $3,292 billion, then the amount counted in GDP, which is known as gross investment, would be

Accepted Answer

A)  $1,476 billion. 
B)  $3,292 billion. 
C)  $4,768 billion. 
D)  $8,060 billion. 
A)  $1,476 billion. 
B)  $3,292 billion. 
C)  $4,768 billion. 
D)  $8,060 billion.

Question 4

Which of the following is the largest component of national income?

Accepted Answer

A)  net interest 
B)  corporate profits 
C)  rental income 
D)  compensation of employees by firms 
A)  net interest 
B)  corporate profits 
C)  rental income 
D)  compensation of employees by firms

Question 5

Which of the following is NOT an example of a consumption expenditure?

Accepted Answer

A)  a digital camera you purchase to take on vacation 
B)  a new county jail 
C)  a motorcycle you purchase to ride on the weekends 
D)  a restaurant meal 
A)  a digital camera you purchase to take on vacation 
B)  a new county jail 
C)  a motorcycle you purchase to ride on the weekends 
D)  a restaurant meal

Question 6

When the GDP is measured using "adjustments for price changes" it is known as the

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  real GNP. 
D)  nominal GNP. 
A)  real GDP. 
B)  nominal GDP. 
C)  real GNP. 
D)  nominal GNP.

Question 7

Explain why only final goods are included in GDP.

Accepted Answer

Final goods are those that are sold to u

Question 8

What is the best measure of the value of output of an economy?

Accepted Answer

A)  GDP 
B)  GNP 
C)  NNP 
D)  the GDP deflator 
A)  GDP 
B)  GNP 
C)  NNP 
D)  the GDP deflator

Question 9

Use the following information to answer the next several questions:
Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2011, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2012, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively.
-Based on the information in Scenario 1, nominal GDP in 2011 in this economy was

Accepted Answer

A)  $830. 
B)  $1,025. 
C)  $1,090. 
D)  $1,345. 
A)  $830. 
B)  $1,025. 
C)  $1,090. 
D)  $1,345.

Question 10

Compensation of employees is the largest component of national income.

Accepted Answer

A) True 
 B)False

Question 11

A period in which real GDP in the economy declines for at least six months is referred to as

Accepted Answer

A)  long term growth. 
B)  a recession. 
C)  a positive fluctuation. 
D)  living standards. 
A)  long term growth. 
B)  a recession. 
C)  a positive fluctuation. 
D)  living standards.

Question 12

Which prices are used to measure goods and services in calculating the nominal GDP?

Accepted Answer

A)  past years prices 
B)  current prices 
C)  average prices 
D)  projected prices 
A)  past years prices 
B)  current prices 
C)  average prices 
D)  projected prices

Question 13

Going to the dentist would be counted in GDP as

Accepted Answer

A)  crowns and fillings. 
B)  insurance utilization. 
C)  a service. 
D)  a measure of welfare. 
A)  crowns and fillings. 
B)  insurance utilization. 
C)  a service. 
D)  a measure of welfare.

Question 14

In the study of macroeconomics, production leads to income, and income leads to production in a continuing cycle.

Accepted Answer

A) True 
 B)False

Question 15

When considering imports and exports, economists include the ________ as a component of the GDP.

Accepted Answer

A)  total imports 
B)  total exports 
C)  net exports 
D)  gross exports 
A)  total imports 
B)  total exports 
C)  net exports 
D)  gross exports

Question 16

The circular flow is used to make the point that

Accepted Answer

A)  rising prices never occur during times of unemployment. 
B)  unemployment only occurs during a recession. 
C)  production generates income. 
D)  households purchase factors of production from firms. 
A)  rising prices never occur during times of unemployment. 
B)  unemployment only occurs during a recession. 
C)  production generates income. 
D)  households purchase factors of production from firms.

Question 17

If the economy grew at 7 percent from 2011 to 2012 and real GDP was 400 in 2011, what was real GDP in 2012?

Accepted Answer

A)  393 
B)  400 
C)  407 
D)  428 
A)  393 
B)  400 
C)  407 
D)  428

Question 18

In the expanded circular flow diagram, the government supplies

Accepted Answer

A)  goods and services to the product market. 
B)  factors of production to the factor market. 
C)  goods and services to households. 
D)  factors of production to firms. 
A)  goods and services to the product market. 
B)  factors of production to the factor market. 
C)  goods and services to households. 
D)  factors of production to firms.

Question 19

Social security payments are examples of

Accepted Answer

A)  nondurable goods. 
B)  durable goods. 
C)  services. 
D)  transfer payments. 
A)  nondurable goods. 
B)  durable goods. 
C)  services. 
D)  transfer payments.

Question 20

In the expanded circular flow diagram, the rest of the world interacts directly with

Accepted Answer

A)  households. 
B)  firms. 
C)  product markets. 
D)  factor markets. 
A)  households. 
B)  firms. 
C)  product markets. 
D)  factor markets.

GDP is supposed to measure the goods ________ the United States.

The majority of spending in the government purchases category comes from the federal government.

If in the third quarter of 2012 total investment spending was $4,768 billion and depreciation was $3,292 billion, then the amount counted in GDP, which is known as gross investment, would be

Which of the following is the largest component of national income?

Which of the following is NOT an example of a consumption expenditure?

When the GDP is measured using "adjustments for price changes" it is known as the

Explain why only final goods are included in GDP.

What is the best measure of the value of output of an economy?

Compensation of employees is the largest component of national income.

A period in which real GDP in the economy declines for at least six months is referred to as

Which prices are used to measure goods and services in calculating the nominal GDP?

Going to the dentist would be counted in GDP as

In the study of macroeconomics, production leads to income, and income leads to production in a continuing cycle.

When considering imports and exports, economists include the ________ as a component of the GDP.

The circular flow is used to make the point that

If the economy grew at 7 percent from 2011 to 2012 and real GDP was 400 in 2011, what was real GDP in 2012?

In the expanded circular flow diagram, the government supplies

Social security payments are examples of

In the expanded circular flow diagram, the rest of the world interacts directly with

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 5: Measuring a Nation's Production and Income

GDP is supposed to measure the goods ________ the United States.

The majority of spending in the government purchases category comes from the federal government.

If in the third quarter of 2012 total investment spending was $4,768 billion and depreciation was $3,292 billion, then the amount counted in GDP, which is known as gross investment, would be

Which of the following is the largest component of national income?

Which of the following is NOT an example of a consumption expenditure?

When the GDP is measured using "adjustments for price changes" it is known as the

Explain why only final goods are included in GDP.

What is the best measure of the value of output of an economy?

Compensation of employees is the largest component of national income.

A period in which real GDP in the economy declines for at least six months is referred to as

Which prices are used to measure goods and services in calculating the nominal GDP?

Going to the dentist would be counted in GDP as

In the study of macroeconomics, production leads to income, and income leads to production in a continuing cycle.

When considering imports and exports, economists include the ________ as a component of the GDP.

The circular flow is used to make the point that

If the economy grew at 7 percent from 2011 to 2012 and real GDP was 400 in 2011, what was real GDP in 2012?

In the expanded circular flow diagram, the government supplies

Social security payments are examples of

In the expanded circular flow diagram, the rest of the world interacts directly with

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters