Question 1

Statistics on real GDP during World War II may give a misleading indication of whether World War II was a period of prosperity because

Accepted Answer

A) inflation may have been considerably higher than estimated. 
B) most of the increased production was for military goods, not consumption goods. 
C) government agents purposely inflated the production numbers to maintain American support for the war. 
D) government agencies were shorthanded and did a particularly poor job of collecting data. 
A) inflation may have been considerably higher than estimated. 
B) most of the increased production was for military goods, not consumption goods. 
C) government agents purposely inflated the production numbers to maintain American support for the war. 
D) government agencies were shorthanded and did a particularly poor job of collecting data.

Question 2

Nominal GDP measures the value of all final goods and services at base-year prices.

Accepted Answer

A) True 
 B)False

Question 3

An example of a transfer payment is

Accepted Answer

A) a teacher's paycheck. 
B) a paycheck for a member of the National Guard. 
C) a welfare payment. 
D) a purchase of a new bridge in Alaska. 
A) a teacher's paycheck. 
B) a paycheck for a member of the National Guard. 
C) a welfare payment. 
D) a purchase of a new bridge in Alaska.

Question 4

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Accepted Answer

The largest category of expenditures is

Question 5

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Accepted Answer

A) True 
 B)False

Question 6

Suppose that nominal GDP in 2013 was less than real GDP in 2013.Given this information,we know for certain that

Accepted Answer

A) the price level in 2013 was greater than the price level in the base year. 
B) the price level in 2013 was less than the price level in the base year. 
C) real GDP in 2013 was less than real GDP in the base year. 
D) real GDP in 2013 was greater than real GDP in the base year. 
A) the price level in 2013 was greater than the price level in the base year. 
B) the price level in 2013 was less than the price level in the base year. 
C) real GDP in 2013 was less than real GDP in the base year. 
D) real GDP in 2013 was greater than real GDP in the base year.

Question 7

Which of the following transactions represents the purchase of a final good?

Accepted Answer

A) Starbucks purchases coffee beans. 
B) Delta buys a new European-made jetliner. 
C) Apple computer buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower. 
A) Starbucks purchases coffee beans. 
B) Delta buys a new European-made jetliner. 
C) Apple computer buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower.

Question 8

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Accepted Answer

A) crime rate increased. 
B) percentage of people addicted to illegal drugs increased. 
C) amount of pollution decreased. 
D) average hours worked per week decreased. 
A) crime rate increased. 
B) percentage of people addicted to illegal drugs increased. 
C) amount of pollution decreased. 
D) average hours worked per week decreased.

Question 9

Japan experienced periods of deflation - a declining price level - during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

Accepted Answer

Real GDP would be higher,as long as the

Question 10

In 2012,which component of GDP had a negative value?

Accepted Answer

A) consumption 
B) investment 
C) government spending 
D) net exports 
A) consumption 
B) investment 
C) government spending 
D) net exports

Question 11

Which of the following goods is directly counted in GDP?

Accepted Answer

A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches 
A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches

Question 12

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 the GDP deflator in 2013 if 2013 is the base year?

Accepted Answer

A) 120 
B) 118 
C) 100 
D) 87 
A) 120 
B) 118 
C) 100 
D) 87

Question 13

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

Accepted Answer

A) U)S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP. 
A) U)S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP.

Question 14

Scenario 12-1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 12-1.The value added of CANOES-R-US for each canoe equals

Accepted Answer

A) $1,200. 
B) $800. 
C) $500. 
D) $400. 
A) $1,200. 
B) $800. 
C) $500. 
D) $400.

Question 15

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

Accepted Answer

A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. 
A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.

Question 16

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Accepted Answer

A) True 
 B)False

Question 17

Total income in an economy is equal to

Accepted Answer

A) GDP minus net exports. 
B) income minus taxes. 
C) the sum of wages, interest, rent, and profit. 
D) firm revenues. 
A) GDP minus net exports. 
B) income minus taxes. 
C) the sum of wages, interest, rent, and profit. 
D) firm revenues.

Question 18

Disposable personal income is equal to personal income minus personal tax payments.

Accepted Answer

A) True 
 B)False

Question 19

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Accepted Answer

A) GDP would increase reflecting the fact that the environment would be cleaner. 
B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. 
C) GDP would increase as the citizens of China were made happier as the environment was cleaned up. 
D) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP. 
A) GDP would increase reflecting the fact that the environment would be cleaner. 
B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. 
C) GDP would increase as the citizens of China were made happier as the environment was cleaned up. 
D) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP.

Question 20

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

Accepted Answer

A) $25 million 
B) $20 million 
C) $500,000 
D) $50,000 
A) $25 million 
B) $20 million 
C) $500,000 
D) $50,000

Statistics on real GDP during World War II may give a misleading indication of whether World War II was a period of prosperity because

Nominal GDP measures the value of all final goods and services at base-year prices.

An example of a transfer payment is

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Suppose that nominal GDP in 2013 was less than real GDP in 2013.Given this information,we know for certain that

Which of the following transactions represents the purchase of a final good?

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Japan experienced periods of deflation - a declining price level - during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

In 2012,which component of GDP had a negative value?

Which of the following goods is directly counted in GDP?

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Total income in an economy is equal to

Disposable personal income is equal to personal income minus personal tax payments.

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

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

Statistics on real GDP during World War II may give a misleading indication of whether World War II was a period of prosperity because

Nominal GDP measures the value of all final goods and services at base-year prices.

An example of a transfer payment is

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Suppose that nominal GDP in 2013 was less than real GDP in 2013.Given this information,we know for certain that

Which of the following transactions represents the purchase of a final good?

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Japan experienced periods of deflation - a declining price level - during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

In 2012,which component of GDP had a negative value?

Which of the following goods is directly counted in GDP?

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Total income in an economy is equal to

Disposable personal income is equal to personal income minus personal tax payments.

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

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