Question 1

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006.In 2007 it sells all 25 cars.Which of the following statements is correct?

Accepted Answer

A) The full value of the increased inventory will be counted as part of GDP in 2006, and the value of the cars sold in 2007 will not cause 2007 GDP to increase. 
B) The value of the increased inventory will not affect 2006 GDP; instead, the full value of the inventory will be counted as part of 2007 GDP. 
C) The value of the increased inventory will be counted as part of 2006 GDP and the value of the cars sold in 2007 will increase 2007 GDP. 
D) One-half of the value of the increased inventory will be counted as part of 2006 GDP and the other one-half of the value will be counted as part of 2007 GDP. 
A) The full value of the increased inventory will be counted as part of GDP in 2006, and the value of the cars sold in 2007 will not cause 2007 GDP to increase. 
B) The value of the increased inventory will not affect 2006 GDP; instead, the full value of the inventory will be counted as part of 2007 GDP. 
C) The value of the increased inventory will be counted as part of 2006 GDP and the value of the cars sold in 2007 will increase 2007 GDP. 
D) One-half of the value of the increased inventory will be counted as part of 2006 GDP and the other one-half of the value will be counted as part of 2007 GDP.

Question 2

Which of the following items is included in GDP?

Accepted Answer

A) the sale of stocks and bonds 
B) the estimated rental value of owner-occupied housing 
C) unpaid production of goods and services at home 
D) All of the above are included in GDP. 
A) the sale of stocks and bonds 
B) the estimated rental value of owner-occupied housing 
C) unpaid production of goods and services at home 
D) All of the above are included in GDP.

Question 3

When economists talk about growth in the economy,they measure that growth with the

Accepted Answer

A) absolute change in nominal GDP. 
B) percentage change in nominal GDP. 
C) absolute change in real GDP. 
D) percentage change in real GDP. 
A) absolute change in nominal GDP. 
B) percentage change in nominal GDP. 
C) absolute change in real GDP. 
D) percentage change in real GDP.

Question 4

Goods that go into inventory and are not sold during the current period are

Accepted Answer

A) counted as intermediate goods and so are not included in current period GDP. 
B) counted in current GDP only if the firm that produced them sells them to another firm. 
C) included in current period GDP as inventory investment. 
D) included in current period GDP as consumption. 
A) counted as intermediate goods and so are not included in current period GDP. 
B) counted in current GDP only if the firm that produced them sells them to another firm. 
C) included in current period GDP as inventory investment. 
D) included in current period GDP as consumption.

Question 5

In a certain small country,the unit of currency is the huck.That country's government recently announced that "GDP amounted to 400 million hucks in the quarter that just ended." Assuming this country has adopted American GDP accounting conventions,this statement means that GDP,

Accepted Answer

A) without seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. 
B) with seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. 
C) without seasonal adjustment, amounted to 400 million hucks in the quarter that just ended. 
D) with seasonal adjustment, amounted to 400 million hucks in the quarter that just ended. 
A) without seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. 
B) with seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. 
C) without seasonal adjustment, amounted to 400 million hucks in the quarter that just ended. 
D) with seasonal adjustment, amounted to 400 million hucks in the quarter that just ended.

Question 6

In 2004,GDP per person in the United States was about

Accepted Answer

A) $22,000. 
B) $31,000. 
C) $40,000. 
D) $57,000. 
A) $22,000. 
B) $31,000. 
C) $40,000. 
D) $57,000.

Question 7

Table 23-1. The data pertain to the nation of Simplia for the year 2006.
  
-Refer to Table 23-1.GNP for Simplia is

Accepted Answer

A) $96. 
B) $100. 
C) $105. 
D) $110. 
A) $96. 
B) $100. 
C) $105. 
D) $110.

Question 8

Which of the following items is included in GDP?

Accepted Answer

A) the sale of stocks and bonds 
B) the sale of used goods 
C) the sale of services such as those performed by a doctor 
D) All of the above are included in GDP. 
A) the sale of stocks and bonds 
B) the sale of used goods 
C) the sale of services such as those performed by a doctor 
D) All of the above are included in GDP.

Question 9

In 2004,U.S.GDP was almost

Accepted Answer

A) $8 trillion. 
B) $12 trillion. 
C) $24 trillion. 
D) $44 trillion. 
A) $8 trillion. 
B) $12 trillion. 
C) $24 trillion. 
D) $44 trillion.

Question 10

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A) the value of unpaid housework 
B) the value of vegetables and other foods that people grow in their gardens 
C) the estimated rental value of owner-occupied homes 
D) All of the above are included. 
A) the value of unpaid housework 
B) the value of vegetables and other foods that people grow in their gardens 
C) the estimated rental value of owner-occupied homes 
D) All of the above are included.

Question 11

Countries in which the underground or "shadow" economy has been estimated to account for more than 50 percent of GDP include

Accepted Answer

A) Georgia, Bolivia, and Zimbabwe. 
B) Thailand, Mexico, and Argentina. 
C) Japan, Bolivia, and Argentina. 
D) Peru, Mexico, and the United States. 
A) Georgia, Bolivia, and Zimbabwe. 
B) Thailand, Mexico, and Argentina. 
C) Japan, Bolivia, and Argentina. 
D) Peru, Mexico, and the United States.

Question 12

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Accepted Answer

A) necessarily raises GDP. 
B) necessarily decreases GDP. 
C) doesn't change GDP because gambling is never included in GDP. 
D) doesn't change GDP because in either case his income is included. 
A) necessarily raises GDP. 
B) necessarily decreases GDP. 
C) doesn't change GDP because gambling is never included in GDP. 
D) doesn't change GDP because in either case his income is included.

Question 13

Which of the following statements about nominal GDP and real GDP is accurate?

Accepted Answer

A) Nominal GDP is a better gauge of economic well-being than is real GDP. 
B) Real GDP is a better gauge of economic well-being than is nominal GDP. 
C) Real GDP and nominal GDP are equally good measures of economic well-being. 
D) Whether real GDP or nominal GDP is a better measure of economic well-being depends on the mix of goods and services. 
A) Nominal GDP is a better gauge of economic well-being than is real GDP. 
B) Real GDP is a better gauge of economic well-being than is nominal GDP. 
C) Real GDP and nominal GDP are equally good measures of economic well-being. 
D) Whether real GDP or nominal GDP is a better measure of economic well-being depends on the mix of goods and services.

Question 14

In a certain economy in 2005,households spent $1,000 on goods and services;purchases of capital equipment,inventories,and structures amounted to $350;government spent $450 on goods and services;and the value of imports exceeded the value of exports by $50.It follows that 2005 GDP for this economy was

Accepted Answer

A) $1,750. 
B) $1,850. 
C) $1,950. 
D) $2,100. 
A) $1,750. 
B) $1,850. 
C) $1,950. 
D) $2,100.

Question 15

U.S.GDP includes estimates of things such as unpaid housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 16

GDP may be calculated as either the production of,or the income generated by,the value of final goods and services produced within an economy.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is included in the consumption component of U.S.GDP?

Accepted Answer

A) purchases of staplers, paper clips, and telephones by U.S.business firms 
B) purchases of natural gas by U.S.households 
C) purchases of newly constructed homes by U.S households 
D) All of the above are correct. 
A) purchases of staplers, paper clips, and telephones by U.S.business firms 
B) purchases of natural gas by U.S.households 
C) purchases of newly constructed homes by U.S households 
D) All of the above are correct.

Question 18

The information below was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A) Japan, Switzerland, United States 
B) Japan, United States, Switzerland 
C) United States, Switzerland, Japan 
D) United States, Japan, Switzerland 
A) Japan, Switzerland, United States 
B) Japan, United States, Switzerland 
C) United States, Switzerland, Japan 
D) United States, Japan, Switzerland

Question 19

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Accepted Answer

A) personal income and personal disposable income. 
B) total household payments to the government and taxes paid to the government. 
C) the income and expenditure approaches to the calculation of GDP. 
D) the quarterly and annual approaches to the calculation of GDP. 
A) personal income and personal disposable income. 
B) total household payments to the government and taxes paid to the government. 
C) the income and expenditure approaches to the calculation of GDP. 
D) the quarterly and annual approaches to the calculation of GDP.

Question 20

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

Accepted Answer

A) the unemployment rate 
B) the inflation rate 
C) gross domestic product 
D) the trade deficit 
A) the unemployment rate 
B) the inflation rate 
C) gross domestic product 
D) the trade deficit

Exam 23: Measuring a Nations Income

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006.In 2007 it sells all 25 cars.Which of the following statements is correct?

Which of the following items is included in GDP?

When economists talk about growth in the economy,they measure that growth with the

Goods that go into inventory and are not sold during the current period are

In a certain small country,the unit of currency is the huck.That country's government recently announced that "GDP amounted to 400 million hucks in the quarter that just ended." Assuming this country has adopted American GDP accounting conventions,this statement means that GDP,

In 2004,GDP per person in the United States was about

Table 23-1. The data pertain to the nation of Simplia for the year 2006. -Refer to Table 23-1.GNP for Simplia is

Which of the following items is included in GDP?

In 2004,U.S.GDP was almost

Estimates of the values of which of the following non-market goods or services are included in GDP?

Countries in which the underground or "shadow" economy has been estimated to account for more than 50 percent of GDP include

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Which of the following statements about nominal GDP and real GDP is accurate?

U.S.GDP includes estimates of things such as unpaid housework and car maintenance.

GDP may be calculated as either the production of,or the income generated by,the value of final goods and services produced within an economy.

Which of the following is included in the consumption component of U.S.GDP?

The information below was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest?

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

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

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: 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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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