Question 1

According to the income approach to measuring GDP, the largest income category is

Accepted Answer

A)  consumption expenditure. 
B)  profits. 
C)  interest. 
D)  wages. 
E)  rent. 
A)  consumption expenditure. 
B)  profits. 
C)  interest. 
D)  wages. 
E)  rent.

Question 2

When measuring GDP,

Accepted Answer

A)  only the federal government's expenditure on goods and services is included. 
B)  the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue. 
C)  the expenditure on goods and services by all levels of government are included. 
D)  the government sector is not included because it is the public sector not the private sector. 
E)  the government sector is not counted because it does not produce goods and services. 
A)  only the federal government's expenditure on goods and services is included. 
B)  the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue. 
C)  the expenditure on goods and services by all levels of government are included. 
D)  the government sector is not included because it is the public sector not the private sector. 
E)  the government sector is not counted because it does not produce goods and services.

Question 3

If the income and expenditure approaches do NOT add to exactly the same estimate of GDP, the difference is called

Accepted Answer

A)  a statistical discrepancy. 
B)  direct taxes. 
C)  a subsidy. 
D)  depreciation. 
E)  All of the above. 
A)  a statistical discrepancy. 
B)  direct taxes. 
C)  a subsidy. 
D)  depreciation. 
E)  All of the above.

Question 4

In Australia, between 1959/60 and 2017/18, there has been
i. a consistent, non-changing growth rate of potential GDP per person.
ii. an increase in the standard of living based on real GDP per person.
iii. fluctuations in real GDP per person around potential GDP per person.

Accepted Answer

A)  i only 
B)  i, ii and iii 
C)  i and ii only 
D)  ii only 
E)  ii and iii 
A)  i only 
B)  i, ii and iii 
C)  i and ii only 
D)  ii only 
E)  ii and iii

Question 5

Everything else the same, if government expenditure increases by $400 billion and imports increase by $400 billion, then GDP

Accepted Answer

A)  decreases by $400 billion. 
B)  decreases by $200 billion. 
C)  increases by $400 billion. 
D)  does not change. 
E)  increases by $200 billion. 
A)  decreases by $400 billion. 
B)  decreases by $200 billion. 
C)  increases by $400 billion. 
D)  does not change. 
E)  increases by $200 billion.

Question 6

Nominal GDP measures the value of goods and services produced in a given year, valued using

Accepted Answer

A)  base-year prices. 
B)  constant prices. 
C)  future prices. 
D)  no prices. 
E)  prices of the same year. 
A)  base-year prices. 
B)  constant prices. 
C)  future prices. 
D)  no prices. 
E)  prices of the same year.

Question 7

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in Australia,

Accepted Answer

A)  investment is less than government expenditure on goods and services. 
B)  investment is larger than government expenditure on goods and services. 
C)  government expenditure on goods and services is the largest category. 
D)  investment is the largest category. 
E)  investment, government expenditure on goods and services, and consumption expenditure are all about the same size. 
A)  investment is less than government expenditure on goods and services. 
B)  investment is larger than government expenditure on goods and services. 
C)  government expenditure on goods and services is the largest category. 
D)  investment is the largest category. 
E)  investment, government expenditure on goods and services, and consumption expenditure are all about the same size.

Question 8

In measuring GDP, which of the following is included?

Accepted Answer

A)  The value of shares and bonds bought and sold. 
B)  The value of preparing meals at home. 
C)  The value of increases in business inventories. 
D)  The value of used goods when they are sold. 
E)  The value of durable consumption goods but not the value of nondurable consumption goods. 
A)  The value of shares and bonds bought and sold. 
B)  The value of preparing meals at home. 
C)  The value of increases in business inventories. 
D)  The value of used goods when they are sold. 
E)  The value of durable consumption goods but not the value of nondurable consumption goods.

Question 9

Which of the following is NOT directly included in Australia's GDP?

Accepted Answer

A)  Sales of sun block at Bondi Beach, Sydney. 
B)  Ticket sales to the Melbourne Aquarium. 
C)  Popcorn purchased by a movie theatre chain in Brisbane. 
D)  Movie tickets purchased by consumers in Perth. 
E)  Sales of meat pies at an AFL game in Adelaide. 
A)  Sales of sun block at Bondi Beach, Sydney. 
B)  Ticket sales to the Melbourne Aquarium. 
C)  Popcorn purchased by a movie theatre chain in Brisbane. 
D)  Movie tickets purchased by consumers in Perth. 
E)  Sales of meat pies at an AFL game in Adelaide.

Question 10

If we use GDP to measure our standard of living, then our procedure is

Accepted Answer

A)  inaccurate because our standard of living has nothing to do with goods and services. 
B)  inaccurate because our standard of living does not depend only on goods and services. 
C)  inaccurate because our standard of living only depends on used goods and services. 
D)  accurate only if we use nominal GDP rather than real GDP. 
E)  accurate because our standard of living depends solely on goods and services. 
A)  inaccurate because our standard of living has nothing to do with goods and services. 
B)  inaccurate because our standard of living does not depend only on goods and services. 
C)  inaccurate because our standard of living only depends on used goods and services. 
D)  accurate only if we use nominal GDP rather than real GDP. 
E)  accurate because our standard of living depends solely on goods and services.

Question 11

Adding wages, interest, rent and profits yields

Accepted Answer

A)  net domestic product at factor cost. 
B)  total expenditure. 
C)  gross domestic product. 
D)  gross domestic product at factor cost. 
E)  GNP. 
A)  net domestic product at factor cost. 
B)  total expenditure. 
C)  gross domestic product. 
D)  gross domestic product at factor cost. 
E)  GNP.

Question 12

The following are all final goods EXCEPT

Accepted Answer

A)  Nike shoes used by a basketball player. 
B)  flour used by the baker to make cupcakes. 
C)  bread eaten by a family for lunch. 
D)  a computer used by Intel to design new computer chips. 
E)  pencils used by a 6th grader in class. 
A)  Nike shoes used by a basketball player. 
B)  flour used by the baker to make cupcakes. 
C)  bread eaten by a family for lunch. 
D)  a computer used by Intel to design new computer chips. 
E)  pencils used by a 6th grader in class.

Question 13

The income approach measures GDP by summing

Accepted Answer

A)  C + I + G + NX. 
B)  the total production of all final goods and services produced in a year within a country's borders. 
C)  the wealth of households, business and government. 
D)  the incomes paid to households for the resources they own. 
E)  Both answers A and D are correct. 
A)  C + I + G + NX. 
B)  the total production of all final goods and services produced in a year within a country's borders. 
C)  the wealth of households, business and government. 
D)  the incomes paid to households for the resources they own. 
E)  Both answers A and D are correct.

Question 14

Net exports of goods and services are defined as the

Accepted Answer

A)  value of exports minus the income we receive from foreigners. 
B)  income we receive from selling goods to foreigners. 
C)  value of exports plus the income we receive from foreigners. 
D)  value of the goods we sell to foreigners. 
E)  value of exports minus the value of imports. 
A)  value of exports minus the income we receive from foreigners. 
B)  income we receive from selling goods to foreigners. 
C)  value of exports plus the income we receive from foreigners. 
D)  value of the goods we sell to foreigners. 
E)  value of exports minus the value of imports.

Question 15

The purchase of 500 Westpac shares by a Super fund

Accepted Answer

A)  is not counted as part of GDP. 
B)  is counted as consumption expenditure. 
C)  is counted as investment in the GDP accounts. 
D)  is counted as part of import expenditure in the GDP accounts because Westpac is a foreign firm. 
E)  is counted as part of export expenditure in the GDP accounts because Westpac is a foreign firm. 
A)  is not counted as part of GDP. 
B)  is counted as consumption expenditure. 
C)  is counted as investment in the GDP accounts. 
D)  is counted as part of import expenditure in the GDP accounts because Westpac is a foreign firm. 
E)  is counted as part of export expenditure in the GDP accounts because Westpac is a foreign firm.

Question 16

Beijing is notorious for its excessive pollution. China's measure of GDP is

Accepted Answer

A)  not affected by the estimated value of the pollution's harm. 
B)  changed by the pollution only when comparing its GDP with Australian GDP. 
C)  decreased by the estimated value of the pollution's harm. 
D)  increased by the estimated value of the pollution's harm. 
E)  None of the above answers is correct. 
A)  not affected by the estimated value of the pollution's harm. 
B)  changed by the pollution only when comparing its GDP with Australian GDP. 
C)  decreased by the estimated value of the pollution's harm. 
D)  increased by the estimated value of the pollution's harm. 
E)  None of the above answers is correct.

Question 17

Consumption expenditure includes spending

Accepted Answer

A)  on office supplies by firms. 
B)  on intermediate goods and services by firms. 
C)  by households and spending on office supplies by firms. 
D)  by households. 
E)  by governments when they are buying goods and services that consumers also buy. 
A)  on office supplies by firms. 
B)  on intermediate goods and services by firms. 
C)  by households and spending on office supplies by firms. 
D)  by households. 
E)  by governments when they are buying goods and services that consumers also buy.

Question 18

Nominal GDP is GDP

Accepted Answer

A)  after adjusting for any price changes. 
B)  that ignores depreciation. 
C)  using current market values. 
D)  minus depreciation. 
E)  during a recession. 
A)  after adjusting for any price changes. 
B)  that ignores depreciation. 
C)  using current market values. 
D)  minus depreciation. 
E)  during a recession.

Question 19

Pat gives up a $40,000 per year job to stay at home and take care of the house. By so doing, Pat saves $15,000 in child care and house cleaning services which he now performs himself. The direct effect on GDP from Pat's decision is a decrease of

Accepted Answer

A)  $25,000. 
B)  $30,000. 
C)  $40,000. 
D)  $15,000. 
E)  $55,000. 
A)  $25,000. 
B)  $30,000. 
C)  $40,000. 
D)  $15,000. 
E)  $55,000.

Question 20

A south pacific island produces only coconuts. In 2018, the price of a coconut is $1 and the quantity produced is 200. In 2019, the price of a coconut is $1.50 and the quantity produced is 250. 2018 is the base year. Real GDP in 2019 is ________.

Accepted Answer

A)  $1.50 
B)  $200 
C)  $375 
D)  $350 
E)  $250 
A)  $1.50 
B)  $200 
C)  $375 
D)  $350 
E)  $250

According to the income approach to measuring GDP, the largest income category is

When measuring GDP,

If the income and expenditure approaches do NOT add to exactly the same estimate of GDP, the difference is called

In Australia, between 1959/60 and 2017/18, there has been i. a consistent, non-changing growth rate of potential GDP per person. ii. an increase in the standard of living based on real GDP per person. iii. fluctuations in real GDP per person around potential GDP per person.

Everything else the same, if government expenditure increases by $400 billion and imports increase by $400 billion, then GDP

Nominal GDP measures the value of goods and services produced in a given year, valued using

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in Australia,

In measuring GDP, which of the following is included?

Which of the following is NOT directly included in Australia's GDP?

If we use GDP to measure our standard of living, then our procedure is

Adding wages, interest, rent and profits yields

The following are all final goods EXCEPT

The income approach measures GDP by summing

Net exports of goods and services are defined as the

The purchase of 500 Westpac shares by a Super fund

Beijing is notorious for its excessive pollution. China's measure of GDP is

Consumption expenditure includes spending

Nominal GDP is GDP

Pat gives up a $40,000 per year job to stay at home and take care of the house. By so doing, Pat saves $15,000 in child care and house cleaning services which he now performs himself. The direct effect on GDP from Pat's decision is a decrease of

A south pacific island produces only coconuts. In 2018, the price of a coconut is $1 and the quantity produced is 200. In 2019, the price of a coconut is $1.50 and the quantity produced is 250. 2018 is the base year. Real GDP in 2019 is ________.

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving and Investment

Money, the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 5: GDP: a Measure of Total Production and Income

According to the income approach to measuring GDP, the largest income category is

When measuring GDP,

If the income and expenditure approaches do NOT add to exactly the same estimate of GDP, the difference is called

In Australia, between 1959/60 and 2017/18, there has been i. a consistent, non-changing growth rate of potential GDP per person. ii. an increase in the standard of living based on real GDP per person. iii. fluctuations in real GDP per person around potential GDP per person.

Everything else the same, if government expenditure increases by $400 billion and imports increase by $400 billion, then GDP

Nominal GDP measures the value of goods and services produced in a given year, valued using

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in Australia,

In measuring GDP, which of the following is included?

Which of the following is NOT directly included in Australia's GDP?

If we use GDP to measure our standard of living, then our procedure is

Adding wages, interest, rent and profits yields

The following are all final goods EXCEPT

The income approach measures GDP by summing

Net exports of goods and services are defined as the

The purchase of 500 Westpac shares by a Super fund

Beijing is notorious for its excessive pollution. China's measure of GDP is

Consumption expenditure includes spending

Nominal GDP is GDP

Pat gives up a $40,000 per year job to stay at home and take care of the house. By so doing, Pat saves $15,000 in child care and house cleaning services which he now performs himself. The direct effect on GDP from Pat's decision is a decrease of

A south pacific island produces only coconuts. In 2018, the price of a coconut is $1 and the quantity produced is 200. In 2019, the price of a coconut is $1.50 and the quantity produced is 250. 2018 is the base year. Real GDP in 2019 is ________.

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving and Investment

Money, the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters