Question 1

Which of the following is included in GDP?

Accepted Answer

A) The market value of rental housing services, but not the market value of owner-occupied housing services 
B) The market value of owner-occupied housing services, but not the market value of rental housing services 
C) Both the market value of rental housing services and the market value of owner-occupied housing services 
D) Neither the market value of owner-occupied housing services nor the market value of rental housing services 
A) The market value of rental housing services, but not the market value of owner-occupied housing services 
B) The market value of owner-occupied housing services, but not the market value of rental housing services 
C) Both the market value of rental housing services and the market value of owner-occupied housing services 
D) Neither the market value of owner-occupied housing services nor the market value of rental housing services

Question 2

Figure 23-1  
-Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Accepted Answer

A) W, X, Y, and Z 
B) K, M, L, and N 
C) C, K, M, and D 
D) A, L, N, and B 
A) W, X, Y, and Z 
B) K, M, L, and N 
C) C, K, M, and D 
D) A, L, N, and B

Question 3

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Accepted Answer

A) True 
 B)False

Question 4

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

Accepted Answer

A) The GDP deflator 
B) The inflation rate 
C) Gross domestic product 
D) The size of the government surplus 
A) The GDP deflator 
B) The inflation rate 
C) Gross domestic product 
D) The size of the government surplus

Question 6

A transfer payment is a payment made by

Accepted Answer

A) consumers, but not in exchange for a tangible product. 
B) firms, but not in exchange for capital equipment. 
C) foreigners, but not in exchange for a domestically produced good or service. 
D) government, but not in exchange for a currently produced good or service. 
A) consumers, but not in exchange for a tangible product. 
B) firms, but not in exchange for capital equipment. 
C) foreigners, but not in exchange for a domestically produced good or service. 
D) government, but not in exchange for a currently produced good or service.

Question 7

Social Security payments are

Accepted Answer

A) included in GDP because they represent current income. 
B) included in GDP because they represent potential consumption. 
C) excluded from GDP because they are not private pensions. 
D) excluded from GDP because they do not reflect the economy's production. 
A) included in GDP because they represent current income. 
B) included in GDP because they represent potential consumption. 
C) excluded from GDP because they are not private pensions. 
D) excluded from GDP because they do not reflect the economy's production.

Question 8

The U.S. buys $500 billion of goods and $250 billion of services from foreign countries. Foreign countries buy $250 billion of goods and $300 billion of services from the U.S. What is net exports?

Accepted Answer

The answer of The U.S. buys $500 billion of goods...

Question 9

Jane and Ben purchase avocados at a grocery store, but Ben also grows avocados in his backyard. Regarding these two practices, which of the following statements is correct?

Accepted Answer

A) Only Jane's grocery store purchases are included in GDP. 
B) Only Jane's and Ben's grocery store purchases are included in GDP. 
C) Jane's and Ben's grocery store purchases are included in GDP.The avocados from Ben's backyard garden are included at their market value. 
D) Jane's and Ben's grocery store purchases are included in GDP.The avocados from Ben's backyard garden are included at their market value, if Ben provides this information. 
A) Only Jane's grocery store purchases are included in GDP. 
B) Only Jane's and Ben's grocery store purchases are included in GDP. 
C) Jane's and Ben's grocery store purchases are included in GDP.The avocados from Ben's backyard garden are included at their market value. 
D) Jane's and Ben's grocery store purchases are included in GDP.The avocados from Ben's backyard garden are included at their market value, if Ben provides this information.

Question 10

In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

Accepted Answer

The answer of In 2011 a country had a real...

Question 11

Identify the immediate effect of each of the following events on U.S. GDP and its components.
a.James receives a Social Security check.
b.John buys an Italian sports car.
c.Henry buys domestically produced tools for his construction company.

Accepted Answer

a.
Since this is a transfer payment, the

Question 12

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur

Question 13

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

Accepted Answer

A) True 
 B)False

Question 14

In 2015, government purchases were the largest component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 15

If in some year nominal GDP was $40 billion and the GDP deflator was 70, what was real GDP?

Accepted Answer

A) $110.0 billion 
B) $175.0 billion 
C) $57.1 billion 
D) $30.0 billion 
A) $110.0 billion 
B) $175.0 billion 
C) $57.1 billion 
D) $30.0 billion

Question 16

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Accepted Answer

The answer of Calculate GDP for a country with investment...

Question 17

Table 23-3
The following table reports nominal and real GDP for the U.S. from 1929 to 1932.
​
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal GDP } \
\text { (Billions of dollars) }
\end{array} & \begin{array} { c } 
\text { Real GDP } \
\text { (Billions of dollars) }
\end{array} \
\hline 1929 & 103.6 & 977 \
\hline 1930 & 91.2 & 892.8 \
\hline 1931 & 76.5 & 834.9 \
\hline 1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 23-3. What was the growth rate of real GDP for 1930?

Accepted Answer

A) ?8.62%.Real GDP is a better gauge of economic well-being than nominal GDP. 
B) ?8.62%.Nominal GDP is a better gauge of economic well-being than real GDP. 
C) ?9.43%.Real GDP is a better gauge of economic well-being than nominal GDP. 
D) ?9.43%.Nominal GDP is a better gauge of economic well-being than real GDP. 
A) ?8.62%.Real GDP is a better gauge of economic well-being than nominal GDP. 
B) ?8.62%.Nominal GDP is a better gauge of economic well-being than real GDP. 
C) ?9.43%.Real GDP is a better gauge of economic well-being than nominal GDP. 
D) ?9.43%.Nominal GDP is a better gauge of economic well-being than real GDP.

Question 18

Table 23-1
The following table contains data for Mindalion for the year 2019.
​
 $$\begin{array} { | l | l | } 
\hline \text { GDP } & \$ 700 \
\hline \text { Income earned by citizens abroad } & \$ 13 \
\hline \text { Income foreigners earn here } & \$ 12 \
\hline \text { Losses from depreciation } & \$ 5 \
\hline \text { Indirect business taxes } & \$ 10 \
\hline \text { Statistical discrepancy } & \$ 0 \
\hline \text { Retained earnings } & \$ 8 \
\hline \text { Corporate income taxes } & \$ 12 \
\hline \text { Social insurance contributions } & \$ 30 \
\hline \text { Interest paid to households by government } & \$ 8 \
\hline \text { Transfer payments to households from government } & \$ 55 \
\hline \text { Personal taxes } & \$ 60 \
\hline \text { Nontax payments to government } & \$ 11 \
\hline
\end{array}$$
-Refer to Table 23-1. Disposable personal income for Mindalion in 2019 is

Accepted Answer

A) $696. 
B) $700. 
C) $628. 
D) $699. 
A) $696. 
B) $700. 
C) $628. 
D) $699.

Question 19

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Accepted Answer

A) True 
 B)False

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 Nations Income

Which of the following is included in GDP?

Figure 23-1 -Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Changes in the GDP deflator reflect only changes in the prices of goods and services.

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

A transfer payment is a payment made by

Social Security payments are

The U.S. buys $500 billion of goods and $250 billion of services from foreign countries. Foreign countries buy $250 billion of goods and $300 billion of services from the U.S. What is net exports?

Jane and Ben purchase avocados at a grocery store, but Ben also grows avocados in his backyard. Regarding these two practices, which of the following statements is correct?

In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

Identify the immediate effect of each of the following events on U.S. GDP and its components. a.James receives a Social Security check. b.John buys an Italian sports car. c.Henry buys domestically produced tools for his construction company.

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

In 2015, government purchases were the largest component of U.S. GDP.

If in some year nominal GDP was $40 billion and the GDP deflator was 70, what was real GDP?

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Table 23-3 The following table reports nominal and real GDP for the U.S. from 1929 to 1932. ​ Year Nominal GDP (Billions of dollars) Real GDP (Billions of dollars) 1929 103.6 977 1930 91.2 892.8 1931 76.5 834.9 1932 58.7 725.8 -Refer to Table 23-3. What was the growth rate of real GDP for 1930?

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

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

Filters

Table 23-3 The following table reports nominal and real GDP for the U.S. from 1929 to 1932. Year Nominal GDP (Billions of dollars) Real GDP (Billions of dollars) 1929 103.6 977 1930 91.2 892.8 1931 76.5 834.9 1932 58.7 725.8 -Refer to Table 23-3. What was the growth rate of real GDP for 1930?