Question 1

Which of the following is included in GDP?

Accepted Answer

A) The underground economy. 
B) Leisure time. 
C) Environmental degradation. 
D) Price increase. 
A) The underground economy. 
B) Leisure time. 
C) Environmental degradation. 
D) Price increase. D

Question 2

GDP does not count:

Accepted Answer

A) the estimated value of homemaker production. 
B) state and local government purchases. 
C) spending for new homes. 
D) changes in inventories. 
A) the estimated value of homemaker production. 
B) state and local government purchases. 
C) spending for new homes. 
D) changes in inventories. A

Question 3

Net national product is the total net income from production accruing to:

Accepted Answer

A) a country's residents. 
B) other countries' residents. 
C) those who paid their taxes in advance. 
D) the dealers of the black economy. 
A) a country's residents. 
B) other countries' residents. 
C) those who paid their taxes in advance. 
D) the dealers of the black economy. A

Question 4

GDP ignores:

Accepted Answer

A) the value of mowing your lawn, if you pay someone to do it. 
B) the value of cleaning your house, if you hire someone. 
C) the value of a water purifier system. 
D) air, water and noise pollution. 
A) the value of mowing your lawn, if you pay someone to do it. 
B) the value of cleaning your house, if you hire someone. 
C) the value of a water purifier system. 
D) air, water and noise pollution.

Question 5

GDP is not a perfect measure of economic welfare because it:

Accepted Answer

A) double-counts overall spending. 
B) treats a dollar spent on exports the same as a dollar spent on imports. 
C) double-counts the value of leisure time. 
D) treats a non-market transaction as if it did not exist. 
A) double-counts overall spending. 
B) treats a dollar spent on exports the same as a dollar spent on imports. 
C) double-counts the value of leisure time. 
D) treats a non-market transaction as if it did not exist.

Question 6

Exports are a domestic spending for foreign products.

Accepted Answer

A) True 
 B)False

Question 7

Gross national product is also known as:

Accepted Answer

A) gross international income. 
B) net domestic goods and services. 
C) gross national expenditure. 
D) gross national income. 
A) gross international income. 
B) net domestic goods and services. 
C) gross national expenditure. 
D) gross national income.

Question 8

Which of the following is a shortcoming of GDP?

Accepted Answer

A) It excludes changes in inventories. 
B) It includes an estimate of illegal transactions. 
C) It excludes quality of products. 
D) It includes business investment spending. 
A) It excludes changes in inventories. 
B) It includes an estimate of illegal transactions. 
C) It excludes quality of products. 
D) It includes business investment spending.

Question 9

Intermediate goods are included in calculating gross domestic product but final goods are not.

Accepted Answer

A) True 
 B)False

Question 10

Household consumption:

Accepted Answer

A) only accounts for about 20 per cent of total GDP. 
B) is the largest single component of GDP. 
C) accounts for around 80 per cent to 85 per cent of total GDP each year. 
D) is the smallest component of GDP. 
A) only accounts for about 20 per cent of total GDP. 
B) is the largest single component of GDP. 
C) accounts for around 80 per cent to 85 per cent of total GDP each year. 
D) is the smallest component of GDP.

Question 11

Which of the following transactions is not included in GDP?

Accepted Answer

A) The drug addict buys cough medicine. 
B) A drug addict spends two months in a drug rehabilitation centre. 
C) A doctor treats a patient for drug addiction. 
D) Someone sells drugs in a pharmacy. 
E) Someone sells drugs in a vacant lot. 
A) The drug addict buys cough medicine. 
B) A drug addict spends two months in a drug rehabilitation centre. 
C) A doctor treats a patient for drug addiction. 
D) Someone sells drugs in a pharmacy. 
E) Someone sells drugs in a vacant lot.

Question 12

Which one of the following statements is true? Money flows from:

Accepted Answer

A) the government to households for taxes. 
B) foreign economies to households for exports. 
C) the government to firms for goods and services. 
D) firms to foreign economies for exports. 
E) households to foreign economies for resources. 
A) the government to households for taxes. 
B) foreign economies to households for exports. 
C) the government to firms for goods and services. 
D) firms to foreign economies for exports. 
E) households to foreign economies for resources.

Question 13

If I bought 1000 shares in Newish Corp.for $5 per share and sold them two months later for $6 per share,then:

Accepted Answer

A) GDP will rise by $6000. 
B) GDP will fall by $6000. 
C) GDP will rise by $1000. 
D) GDP will rise by the amount I have to pay my broker to arrange the transaction. 
E) GDP will not change. 
A) GDP will rise by $6000. 
B) GDP will fall by $6000. 
C) GDP will rise by $1000. 
D) GDP will rise by the amount I have to pay my broker to arrange the transaction. 
E) GDP will not change.

Question 14

Domestic factor income (DFI)is equal to:

Accepted Answer

A) NDP minus indirect business taxes. 
B) GDP minus indirect business taxes. 
C) GNP minus depreciation. 
D) GDP minus imports. 
E) NDI minus transfers overseas. 
A) NDP minus indirect business taxes. 
B) GDP minus indirect business taxes. 
C) GNP minus depreciation. 
D) GDP minus imports. 
E) NDI minus transfers overseas.

Question 15

Which of the following would not be included in the gross private domestic investment (I)category of GDP?

Accepted Answer

A) A bakery's purchase of a new oven. 
B) A retailer's additions to its inventories. 
C) Newly built residential construction. 
D) A bank's purchase of an Australian Treasury bond. 
A) A bakery's purchase of a new oven. 
B) A retailer's additions to its inventories. 
C) Newly built residential construction. 
D) A bank's purchase of an Australian Treasury bond.

Question 16

Which of the following countries has the highest level of GDP?

Accepted Answer

A) Japan. 
B) China. 
C) Switzerland. 
D) India. 
E) The USA. 
A) Japan. 
B) China. 
C) Switzerland. 
D) India. 
E) The USA.

Question 17

Which of the following items would be included in the calculation of GDP?

Accepted Answer

A) The value of the car produced this year within the country. 
B) Purchase of a used car. 
C) The value of an environmental degradation. 
D) Sale of Gulf War military surplus. 
A) The value of the car produced this year within the country. 
B) Purchase of a used car. 
C) The value of an environmental degradation. 
D) Sale of Gulf War military surplus.

Question 18

In economics,the term 'investment' refers to:

Accepted Answer

A) purchasing shares and fixed term securities. 
B) spending on physical products that are intended to be used as inputs in production processes. 
C) purchasing a piece of existing real estate. 
D) purchasing goods or services. 
A) purchasing shares and fixed term securities. 
B) spending on physical products that are intended to be used as inputs in production processes. 
C) purchasing a piece of existing real estate. 
D) purchasing goods or services.

Question 19

GDP fails to measure changes in

Accepted Answer

A) the prices of products caused by inflation. 
B) the market value of goods and services, since it uses market prices for valuation. 
C) the distribution of goods and services. 
D) leisure time, since it is valued at the minimum wage and not the true opportunity cost of lost wages. 
A) the prices of products caused by inflation. 
B) the market value of goods and services, since it uses market prices for valuation. 
C) the distribution of goods and services. 
D) leisure time, since it is valued at the minimum wage and not the true opportunity cost of lost wages.

Question 20

To finance a current account deficit,a country must:

Accepted Answer

A) borrow money from overseas. 
B) buy overseas assets. 
C) lend money overseas. 
D) do nothing. 
A) borrow money from overseas. 
B) buy overseas assets. 
C) lend money overseas. 
D) do nothing.

Which of the following is included in GDP?

GDP does not count:

Net national product is the total net income from production accruing to:

GDP ignores:

GDP is not a perfect measure of economic welfare because it:

Exports are a domestic spending for foreign products.

Gross national product is also known as:

Which of the following is a shortcoming of GDP?

Intermediate goods are included in calculating gross domestic product but final goods are not.

Household consumption:

Which of the following transactions is not included in GDP?

Which one of the following statements is true? Money flows from:

If I bought 1000 shares in Newish Corp.for $5 per share and sold them two months later for $6 per share,then:

Domestic factor income (DFI)is equal to:

Which of the following would not be included in the gross private domestic investment (I)category of GDP?

Which of the following countries has the highest level of GDP?

Which of the following items would be included in the calculation of GDP?

In economics,the term 'investment' refers to:

GDP fails to measure changes in

To finance a current account deficit,a country must:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 11: Measuring the size of the economy

Which of the following is included in GDP?

GDP does not count:

Net national product is the total net income from production accruing to:

GDP ignores:

GDP is not a perfect measure of economic welfare because it:

Exports are a domestic spending for foreign products.

Gross national product is also known as:

Which of the following is a shortcoming of GDP?

Intermediate goods are included in calculating gross domestic product but final goods are not.

Household consumption:

Which of the following transactions is not included in GDP?

Which one of the following statements is true? Money flows from:

If I bought 1000 shares in Newish Corp.for $5 per share and sold them two months later for $6 per share,then:

Domestic factor income (DFI)is equal to:

Which of the following would not be included in the gross private domestic investment (I)category of GDP?

Which of the following countries has the highest level of GDP?

Which of the following items would be included in the calculation of GDP?

In economics,the term 'investment' refers to:

GDP fails to measure changes in

To finance a current account deficit,a country must:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters