Question 1

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Accepted Answer

The underground economy is that part of

Question 2

Table 12-24
 $\begin{array}{c}
 \quad \quad \quad \quad \quad2007   \quad \quad \quad \quad 2013\
\begin{array}{|l|c|c|c|r|}
\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Pizzas } & 100 & \$ 10 & 120 & \$ 12 \
\hline \text { Haircuts } & 50 & 15 & 45 & 20 \
\hline \text { Backpacks } & 200 & 40 & 210 & 45 \
\hline
\end{array}\end{array}$
-Refer to Table 12-24.Suppose that a very simple economy produces three goods: pizzas,haircuts,and backpacks.Suppose the quantities produced and their corresponding prices for 2007 and 2013 are shown in the table above.Use the information to compute real GDP in the year 2007 and 2013.Calculate real GDP in 2013 assuming the base year is 2007.Do the same calculation assuming the base year is 2013.Are the calculations different? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 3

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Accepted Answer

GDP stands for gross domestic product an

Question 4

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

Accepted Answer

A) investment 
B) consumption 
C) depreciation 
D) intermediate goods 
A) investment 
B) consumption 
C) depreciation 
D) intermediate goods

Question 5

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Accepted Answer

A) GDP will decrease. 
B) GDP will increase. 
C) GDP will not change. 
D) GDP may increase or may decrease depending on inflation. 
A) GDP will decrease. 
B) GDP will increase. 
C) GDP will not change. 
D) GDP may increase or may decrease depending on inflation.

Question 6

Table 12-18
 $$\begin{array} { | l | c | r | r | r | } 
\hline &  { \mathbf { 2 0 0 8 } } & & { \mathbf { 2 0 1 3 } } & \
\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Camera } & 100 & \$ 10 & 120 & \$ 12 \
\hline \text { Legal services } & 50 & 15 & 45 & 20 \
\hline \text { Books } & 200 & 40 & 210 & 45 \
\hline
\end{array}$$ 
A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above.
-Refer to Table 12-18.What is real GDP in 2013,using 2013 as the base year?

Accepted Answer

A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275

Question 7

During a business cycle expansion,total production ________ and total employment ________.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases

Question 8

An increase in national income could by caused by which of the following?

Accepted Answer

A) an increase in depreciation 
B) an increase in personal taxes 
C) a decrease in personal income 
D) an increase in gross domestic product 
A) an increase in depreciation 
B) an increase in personal taxes 
C) a decrease in personal income 
D) an increase in gross domestic product

Question 9

The table below describes the value added in the production of a gallon of gasoline by each stage of production.(The values are hypothetical.)

Accepted Answer

The answer of The table below describes the value added...

Question 10

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production. 
A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production.

Question 11

An example of an intermediate good would be

Accepted Answer

A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car. 
A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car.

Question 12

If real GDP increases we know for sure that

Accepted Answer

A) output has risen. 
B) prices have risen. 
C) prices have risen but output has remained constant. 
D) prices have remained constant. 
A) output has risen. 
B) prices have risen. 
C) prices have risen but output has remained constant. 
D) prices have remained constant.

Question 13

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Accepted Answer

A) 270% 
B) 50% 
C) 5% 
D) 2.7% 
A) 270% 
B) 50% 
C) 5% 
D) 2.7%

Question 14

Table 12-14
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal } \
\text { GDP }
\end{array} & \text { Real GDP } \
\hline 2012 & 14,078 & 13,254 \
\hline 2013 & 14,441 & 13,312 \
\hline
\end{array}$$
-Refer to Table 12-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2013 equals

Accepted Answer

A) 92.2. 
B) 102.6. 
C) 108.5. 
D) 109.1. 
A) 92.2. 
B) 102.6. 
C) 108.5. 
D) 109.1.

Question 15

Gross national product,GNP,of the United States is the market value of all final goods and services

Accepted Answer

A) produced within the United States. 
B) consumed within the United States. 
C) produced by citizens of the United States anywhere in the world. 
D) consumed by citizens of the United States anywhere in the world. 
A) produced within the United States. 
B) consumed within the United States. 
C) produced by citizens of the United States anywhere in the world. 
D) consumed by citizens of the United States anywhere in the world.

Question 16

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

Accepted Answer

A) 5% higher in year 2 than in year 1. 
B) 105% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2. 
A) 5% higher in year 2 than in year 1. 
B) 105% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2.

Question 17

If the GDP deflator is less than 100,then for that year nominal GDP ________ real GDP.

Accepted Answer

A) equals 
B) is greater than 
C) is less than 
D) may be greater than or less than 
A) equals 
B) is greater than 
C) is less than 
D) may be greater than or less than

Question 18

A final good is one that

Accepted Answer

A) is used in the production of another good. 
B) is a natural resource used to produce a good. 
C) is purchased as an input in the production process. 
D) is purchased by its final user. 
A) is used in the production of another good. 
B) is a natural resource used to produce a good. 
C) is purchased as an input in the production process. 
D) is purchased by its final user.

Question 19

If prices in the economy rise,then

Accepted Answer

A) the purchasing power of a dollar rises. 
B) the purchasing power of a dollar stays constant. 
C) the purchasing power of a dollar declines. 
D) the purchasing power of a dollar cannot be determined. 
A) the purchasing power of a dollar rises. 
B) the purchasing power of a dollar stays constant. 
C) the purchasing power of a dollar declines. 
D) the purchasing power of a dollar cannot be determined.

Question 20

Table 12-17
 $$\begin{array} { | l | c | c | c | c | } 
\hline & { \mathbf { 2 0 0 6 } } && \mathbf { 2 0 1 3 } & \
\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Movies } & 20 & \$ 6.00 & 30 & \$ 7.00 \
\hline \text { Burgers } & 100 & 2.00 & 90 & 2.50 \
\hline \text { Bikes } & 3 & 1,000.00 & 6 & 1,100.00 \
\hline
\end{array}$$ 
A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2006 and 2013 are shown in the table above.
-Refer to Table 12-17.What is nominal GDP in 2013?

Accepted Answer

A) $3,320 
B) $3,690 
C) $6,360 
D) $7,035 
A) $3,320 
B) $3,690 
C) $6,360 
D) $7,035

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

During a business cycle expansion,total production and total employment .

An increase in national income could by caused by which of the following?

The table below describes the value added in the production of a gallon of gasoline by each stage of production.(The values are hypothetical.)

Gross domestic product understates the total production of final goods and services because of the omission of

An example of an intermediate good would be

If real GDP increases we know for sure that

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Table 12-14 Year Nominal GDP Real GDP 2012 14,078 13,254 2013 14,441 13,312 -Refer to Table 12-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2013 equals

Gross national product,GNP,of the United States is the market value of all final goods and services

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

If the GDP deflator is less than 100,then for that year nominal GDP ________ real GDP.

A final good is one that

If prices in the economy rise,then

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 12: Gdp: Measuring Total Production and Income

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

During a business cycle expansion,total production ________ and total employment ________.

An increase in national income could by caused by which of the following?

The table below describes the value added in the production of a gallon of gasoline by each stage of production.(The values are hypothetical.)

Gross domestic product understates the total production of final goods and services because of the omission of

An example of an intermediate good would be

If real GDP increases we know for sure that

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Table 12-14 Year Nominal GDP Real GDP 2012 14,078 13,254 2013 14,441 13,312 -Refer to Table 12-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2013 equals

Gross national product,GNP,of the United States is the market value of all final goods and services

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

If the GDP deflator is less than 100,then for that year nominal GDP ________ real GDP.

A final good is one that

If prices in the economy rise,then

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

During a business cycle expansion,total production and total employment .