Question 1

The measure of production that values production using current prices is called

Accepted Answer

A) value-added GDP. 
B) nominal GDP. 
C) real GDP. 
D) underground GDP. 
A) value-added GDP. 
B) nominal GDP. 
C) real GDP. 
D) underground GDP.

Question 2

Depreciation is

Accepted Answer

A) the value of worn-out equipment, machinery, and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market, net of dividends. 
A) the value of worn-out equipment, machinery, and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market, net of dividends.

Question 3

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

Accepted Answer

A) True 
 B)False

Question 4

Gross domestic product is calculated by summing up

Accepted Answer

A) the total quantity of goods and services in the economy. 
B) the total quantity of goods and services produced in the economy during a period of time. 
C) the total market value of goods and services in the economy. 
D) the total market value of final goods and services produced in the economy during a period of time. 
A) the total quantity of goods and services in the economy. 
B) the total quantity of goods and services produced in the economy during a period of time. 
C) the total market value of goods and services in the economy. 
D) the total market value of final goods and services produced in the economy during a period of time.

Question 5

Nominal GDP is another term for

Accepted Answer

A) inflation-adjusted GDP. 
B) real GDP. 
C) constant-dollar GDP. 
D) current-dollar GDP. 
A) inflation-adjusted GDP. 
B) real GDP. 
C) constant-dollar GDP. 
D) current-dollar GDP.

Question 6

The underground economy- the informal sector -can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

Accepted Answer

Entrepreneurs of the firms in the inform

Question 7

The total value of production from Ford's manufacturing plant in Cologne,Germany would be included in Germany's gross national product.

Accepted Answer

A) True 
 B)False

Question 8

Table 12-1
 $$\begin{array} { | c | c | c | } 
\hline  { \text { Product } } & \text { Quantity } & \text { Price } \
\hline \text { Sweatshirts } & 50 & \$ 35.00 \
\hline \text { Dental examinations } & 40 & 75.00 \
\hline \text { Coffee drinks } & 1,000 & 4.00 \
\hline \text { Coffee beans } & 2,000 & 0.50 \
\hline
\end{array}$$
-Refer to Table 12-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals

Accepted Answer

A) 3,090 units. 
B) $7,250. 
C) $8,750. 
D) $9,750. 
A) 3,090 units. 
B) $7,250. 
C) $8,750. 
D) $9,750.

Question 9

To calculate GDP by the expenditure method,one must add

Accepted Answer

A) wages, rents, interest, and profits. 
B) consumption spending, investment spending, government spending and net exports. 
C) consumption spending, investment spending, government spending and exports. 
D) labor, natural resources, entrepreneurship, and capital. 
A) wages, rents, interest, and profits. 
B) consumption spending, investment spending, government spending and net exports. 
C) consumption spending, investment spending, government spending and exports. 
D) labor, natural resources, entrepreneurship, and capital.

Question 10

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Accepted Answer

A) True 
 B)False

Question 11

To calculate GDP using the value-added method,one would add up

Accepted Answer

A) the market value of final goods and services produced during a particular period. 
B) only the value added by the underground economy. 
C) the value added by each firm involved in the production of final goods and services. 
D) the market value of intermediate goods and services produced during a particular period. 
A) the market value of final goods and services produced during a particular period. 
B) only the value added by the underground economy. 
C) the value added by each firm involved in the production of final goods and services. 
D) the market value of intermediate goods and services produced during a particular period.

Question 12

Macroeconomics,as opposed to microeconomics,includes the study of what determines the

Accepted Answer

A) average price levels of goods and services in the economy. 
B) price charged for laptop computers by Dell. 
C) wages paid to employees by Dell. 
D) quantity of Dell employees. 
A) average price levels of goods and services in the economy. 
B) price charged for laptop computers by Dell. 
C) wages paid to employees by Dell. 
D) quantity of Dell employees.

Question 13

Gross domestic product is generally ________ national income.

Accepted Answer

A) greater than 
B) less than 
C) equal to 
D) unrelated to 
A) greater than 
B) less than 
C) equal to 
D) unrelated to

Question 14

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

Accepted Answer

A) GNP is much larger than GDP. 
B) GDP is much larger than GNP. 
C) GDP is equal to GNP. 
D) GDP is not comparable to GDP. 
A) GNP is much larger than GDP. 
B) GDP is much larger than GNP. 
C) GDP is equal to GNP. 
D) GDP is not comparable to GDP.

Question 15

The measure of production that values output using base-year prices is called

Accepted Answer

A) real GDP. 
B) nominal GDP. 
C) value-added GDP. 
D) underground GDP. 
A) real GDP. 
B) nominal GDP. 
C) value-added GDP. 
D) underground GDP.

Question 16

Marla is an architect who is designing a home for Chuck.Chuck is paying Marla $150 per hour to design his new home.When Chuck and Marla get married,Marla continues to work on designing the home,but she no longer charges Chuck for her work.As a result,GDP ________ because ________.

Accepted Answer

A) falls; Marla's work takes place in the underground economy once she's married 
B) falls; Marla's work becomes less valuable once she's married 
C) falls; Marla's architectural design services are no longer bought by Chuck once they're married 
D) rises; Marla becomes more productive once she's married 
A) falls; Marla's work takes place in the underground economy once she's married 
B) falls; Marla's work becomes less valuable once she's married 
C) falls; Marla's architectural design services are no longer bought by Chuck once they're married 
D) rises; Marla becomes more productive once she's married

Question 17

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2013,the sale of her car contributes $3,500 to 2013 GDP.

Accepted Answer

A) True 
 B)False

Question 18

High-income countries such as the United States spend a greater amount on services as compared to goods.

Accepted Answer

A) True 
 B)False

Question 19

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Accepted Answer

A) True 
 B)False

Question 20

Table 12-19
 $$\begin{array} { | l | r | r | } 
\hline & \mathbf { 2 0 1 2 } &  { \mathbf { 2 0 1 3 } } \
\hline \text { Nominal GDP } & \$ 10,000 & \$ 12,000 \
\hline \text { Real GDP } & 9,500 & 10,500 \
\hline
\end{array}$$
-Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2013.

Accepted Answer

A) 114 
B) 105 
C) 95 
D) 87 
A) 114 
B) 105 
C) 95 
D) 87

The measure of production that values production using current prices is called

Depreciation is

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

Gross domestic product is calculated by summing up

Nominal GDP is another term for

The underground economy- the informal sector -can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

The total value of production from Ford's manufacturing plant in Cologne,Germany would be included in Germany's gross national product.

To calculate GDP by the expenditure method,one must add

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

To calculate GDP using the value-added method,one would add up

Macroeconomics,as opposed to microeconomics,includes the study of what determines the

Gross domestic product is generally ________ national income.

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

The measure of production that values output using base-year prices is called

Marla is an architect who is designing a home for Chuck.Chuck is paying Marla $150 per hour to design his new home.When Chuck and Marla get married,Marla continues to work on designing the home,but she no longer charges Chuck for her work.As a result,GDP because .

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2013,the sale of her car contributes $3,500 to 2013 GDP.

High-income countries such as the United States spend a greater amount on services as compared to goods.

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Table 12-19 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2013.

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

The measure of production that values production using current prices is called

Depreciation is

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

Gross domestic product is calculated by summing up

Nominal GDP is another term for

The underground economy- the informal sector -can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

The total value of production from Ford's manufacturing plant in Cologne,Germany would be included in Germany's gross national product.

To calculate GDP by the expenditure method,one must add

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

To calculate GDP using the value-added method,one would add up

Macroeconomics,as opposed to microeconomics,includes the study of what determines the

Gross domestic product is generally ________ national income.

A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where

The measure of production that values output using base-year prices is called

Marla is an architect who is designing a home for Chuck.Chuck is paying Marla $150 per hour to design his new home.When Chuck and Marla get married,Marla continues to work on designing the home,but she no longer charges Chuck for her work.As a result,GDP ________ because ________.

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2013,the sale of her car contributes $3,500 to 2013 GDP.

High-income countries such as the United States spend a greater amount on services as compared to goods.

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Table 12-19 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2013.

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

Marla is an architect who is designing a home for Chuck.Chuck is paying Marla $150 per hour to design his new home.When Chuck and Marla get married,Marla continues to work on designing the home,but she no longer charges Chuck for her work.As a result,GDP because .