Question 1

GDP is not a perfect measure of well-being; for example,

Accepted Answer

A) GDP excludes the value of volunteer work. 
B) GDP does not address the distribution of income. 
C) GDP does not address environmental quality. 
D) All of the above are correct. 
A) GDP excludes the value of volunteer work. 
B) GDP does not address the distribution of income. 
C) GDP does not address environmental quality. 
D) All of the above are correct.

Question 2

Macroeconomists study

Accepted Answer

A) the decisions of individual households and firms. 
B) the interaction between households and firms. 
C) economy-wide phenomena. 
D) regulations imposed on firms and unions. 
A) the decisions of individual households and firms. 
B) the interaction between households and firms. 
C) economy-wide phenomena. 
D) regulations imposed on firms and unions.

Question 3

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

Accepted Answer

A) savings per person. 
B) GDP per person. 
C) government expenditures per person. 
D) investment per business firm. 
A) savings per person. 
B) GDP per person. 
C) government expenditures per person. 
D) investment per business firm.

Question 4

If nominal GDP in 2015 exceeds nominal GDP in 2014, real output must have risen.

Accepted Answer

A) True 
 B)False

Question 5

Identify the immediate effect of each of the following events on UK 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, ther

Question 6

Real GDP is nominal GDP

Accepted Answer

A) plus depreciation. 
B) adjusted for changes in the price level. 
C) minus depreciation. 
D) minus taxes. 
A) plus depreciation. 
B) adjusted for changes in the price level. 
C) minus depreciation. 
D) minus taxes.

Question 7

If a cobbler buys leather for r₁ 900 and thread for R950 and uses them to produce and sell R9 500 worth of shoes to consumers, the contribution to GDP is

Accepted Answer

A) R950. 
B) R1 900. 
C) R12 2 350. 
D) R9 500. 
E) R11 400. 
A) R950. 
B) R1 900. 
C) R12 2 350. 
D) R9 500. 
E) R11 400.

Question 8

The circular-flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 9

Why is GDP per capita a good measure of economic well-being?

Accepted Answer

GDP per capita is a good measure of econ

Question 10

Suppose a person marries his or her gardener and therefore no longer pays him or her for gardening services.GDP

Accepted Answer

A) stays the same as long as the services are still provided. 
B) increases since the services are now provided for free. 
C) decreases since there is no longer a market exchange. 
D) stays the same, since services are not included in GDP. 
A) stays the same as long as the services are still provided. 
B) increases since the services are now provided for free. 
C) decreases since there is no longer a market exchange. 
D) stays the same, since services are not included in GDP.

Question 11

How is your purchase of a R760 000 BMW automobile that was produced entirely in Germany recorded in the SA GDP accounts?

Accepted Answer

A) Consumption increases by R760 000 and net exports decreases by R760 000. 
B) Net exports increases by R760 000. 
C) There is no impact because this transaction does not involve domestic production. 
D) Investment increases by R760 000 and net exports increases by R760 000. 
E) Net exports decreases by R760 000. 
A) Consumption increases by R760 000 and net exports decreases by R760 000. 
B) Net exports increases by R760 000. 
C) There is no impact because this transaction does not involve domestic production. 
D) Investment increases by R760 000 and net exports increases by R760 000. 
E) Net exports decreases by R760 000.

Question 12

For an economy as a whole,

Accepted Answer

A) wages must equal profit. 
B) consumption must equal saving. 
C) income must equal expenditure. 
D) the number of buyers must equal the number of sellers. 
A) wages must equal profit. 
B) consumption must equal saving. 
C) income must equal expenditure. 
D) the number of buyers must equal the number of sellers.

Question 13

If your grandparents buy a newly built retirement home, this transaction would affect

Accepted Answer

A) investment. 
B) net exports. 
C) government purchases. 
D) consumption. 
E) disposable income. 
A) investment. 
B) net exports. 
C) government purchases. 
D) consumption. 
E) disposable income.

Question 14

The four categories of expenditures that make up GDP are consumption, investment,

Accepted Answer

A) Exports, and government purchases. 
B) Imports, and government purchases. 
C) Net exports, and government purchases. 
D) Net exports, and government transfer payments. 
A) Exports, and government purchases. 
B) Imports, and government purchases. 
C) Net exports, and government purchases. 
D) Net exports, and government transfer payments.

Question 15

Last year country A had a nominal GDP of R600 billion, a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of R720 billion, a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

Accepted Answer

A) Country A because it had the higher nominal GDP per person. 
B) Country B because it had the higher nominal GDP per person. 
C) Country A because it had the higher real GDP per person. 
D) Country B because it had the higher real GDP per person. 
A) Country A because it had the higher nominal GDP per person. 
B) Country B because it had the higher nominal GDP per person. 
C) Country A because it had the higher real GDP per person. 
D) Country B because it had the higher real GDP per person.

Question 16

Which of the following would be excluded from SA GDP for 2014? The sale of

Accepted Answer

A) a haircut. 
B) the value of a lawyer's services. 
C) a 2014 Honda made in SA. 
D) a loaf of bread. 
E) a home built in 2013 and first sold in 2014. 
A) a haircut. 
B) the value of a lawyer's services. 
C) a 2014 Honda made in SA. 
D) a loaf of bread. 
E) a home built in 2013 and first sold in 2014.

Question 17

GDP may not be a reliable indicator of the standard of living of a country because it does not include

Accepted Answer

A) spending on investment goods. 
B) the value of goods and services produced outside the market system. 
C) discretionary spending of non-resident workers. 
D) the estimated value of goods to individuals. 
E) the private costs of consumption. 
A) spending on investment goods. 
B) the value of goods and services produced outside the market system. 
C) discretionary spending of non-resident workers. 
D) the estimated value of goods to individuals. 
E) the private costs of consumption.

Question 18

Assume net exports are R-4180, consumption is R95 000, tax revenues are r₁9 000, government purchases are R28 500, and 2010 GDP, calculated by the expenditures approach, is r₁52 000.We can conclude that

Accepted Answer

A) private investment was R36 860. 
B) public investment was R5 890. 
C) private investment was R9 880. 
D) private investment was R32 680. 
A) private investment was R36 860. 
B) public investment was R5 890. 
C) private investment was R9 880. 
D) private investment was R32 680.

Question 19

If a timber yard sells r₁9 000 of timber to a carpenter and the carpenter uses the timber to build a wooden house which he sells for R95 000, the contribution to GDP is r₁14 000.

Accepted Answer

A) True 
 B)False

Question 20

If private investment increased by R950 billion while GDP remained the same, which of the following could have occurred, all else being the same?

Accepted Answer

A) Consumption spending decreased by R950 billion. 
B) Exports increased by R950 billion. 
C) Imports decreased by R950 billion. 
D) Net exports increased by R950 billion. 
A) Consumption spending decreased by R950 billion. 
B) Exports increased by R950 billion. 
C) Imports decreased by R950 billion. 
D) Net exports increased by R950 billion.

GDP is not a perfect measure of well-being; for example,

Macroeconomists study

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

If nominal GDP in 2015 exceeds nominal GDP in 2014, real output must have risen.

Identify the immediate effect of each of the following events on UK 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.

Real GDP is nominal GDP

If a cobbler buys leather for r₁ 900 and thread for R950 and uses them to produce and sell R9 500 worth of shoes to consumers, the contribution to GDP is

The circular-flow model is not used anymore because it fails to perfectly replicate real world situations.

Why is GDP per capita a good measure of economic well-being?

Suppose a person marries his or her gardener and therefore no longer pays him or her for gardening services.GDP

How is your purchase of a R760 000 BMW automobile that was produced entirely in Germany recorded in the SA GDP accounts?

For an economy as a whole,

If your grandparents buy a newly built retirement home, this transaction would affect

The four categories of expenditures that make up GDP are consumption, investment,

Last year country A had a nominal GDP of R600 billion, a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of R720 billion, a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

Which of the following would be excluded from SA GDP for 2014? The sale of

GDP may not be a reliable indicator of the standard of living of a country because it does not include

Assume net exports are R-4180, consumption is R95 000, tax revenues are r₁9 000, government purchases are R28 500, and 2010 GDP, calculated by the expenditures approach, is r₁52 000.We can conclude that

If a timber yard sells r₁9 000 of timber to a carpenter and the carpenter uses the timber to build a wooden house which he sells for R95 000, the contribution to GDP is r₁14 000.

If private investment increased by R950 billion while GDP remained the same, which of the following could have occurred, all else being the same?

What Is Economics

Thinking Like an Economist

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 3: Measuring a Nations Well-Being

GDP is not a perfect measure of well-being; for example,

Macroeconomists study

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

If nominal GDP in 2015 exceeds nominal GDP in 2014, real output must have risen.

Identify the immediate effect of each of the following events on UK 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.

Real GDP is nominal GDP

If a cobbler buys leather for r₁ 900 and thread for R950 and uses them to produce and sell R9 500 worth of shoes to consumers, the contribution to GDP is

The circular-flow model is not used anymore because it fails to perfectly replicate real world situations.

Why is GDP per capita a good measure of economic well-being?

Suppose a person marries his or her gardener and therefore no longer pays him or her for gardening services.GDP

How is your purchase of a R760 000 BMW automobile that was produced entirely in Germany recorded in the SA GDP accounts?

For an economy as a whole,

If your grandparents buy a newly built retirement home, this transaction would affect

The four categories of expenditures that make up GDP are consumption, investment,

Last year country A had a nominal GDP of R600 billion, a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of R720 billion, a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

Which of the following would be excluded from SA GDP for 2014? The sale of

GDP may not be a reliable indicator of the standard of living of a country because it does not include

Assume net exports are R-4180, consumption is R95 000, tax revenues are r₁9 000, government purchases are R28 500, and 2010 GDP, calculated by the expenditures approach, is r₁52 000.We can conclude that

If a timber yard sells r₁9 000 of timber to a carpenter and the carpenter uses the timber to build a wooden house which he sells for R95 000, the contribution to GDP is r₁14 000.

If private investment increased by R950 billion while GDP remained the same, which of the following could have occurred, all else being the same?

What Is Economics

Thinking Like an Economist

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters