Question 1

How are final goods and services valued when measuring nominal GDP?

Accepted Answer

A) At producer cost 
B) At factor market prices 
C) At foreign exchange parity 
D) At current market prices 
E) At base-year prices 
A) At producer cost 
B) At factor market prices 
C) At foreign exchange parity 
D) At current market prices 
E) At base-year prices

Question 2

A new technology is discovered which results in all new cars producing 50 per cent less pollution.Which of the following is true?

Accepted Answer

A) GDP increases anytime pollution is reduced. 
B) GDP will increase to reflect the fact that the air we breathe is cleaner. 
C) GDP will increase if there is an increase in the production cost and price of the car. 
D) Real GDP increases because the air is cleaner,but nominal GDP does not change since air is free. 
E) GDP will decrease. 
A) GDP increases anytime pollution is reduced. 
B) GDP will increase to reflect the fact that the air we breathe is cleaner. 
C) GDP will increase if there is an increase in the production cost and price of the car. 
D) Real GDP increases because the air is cleaner,but nominal GDP does not change since air is free. 
E) GDP will decrease.

Question 3

Goods and services such as environmental quality,leisure time and household production are not included in GDP because they are not

Accepted Answer

A) really durable goods. 
B) for consumption. 
C) made for profit. 
D) bought in markets. 
E) productive activities. 
A) really durable goods. 
B) for consumption. 
C) made for profit. 
D) bought in markets. 
E) productive activities.

Question 4

Which of the following is a final good or service?

Accepted Answer

A) A new replacement muffler installed by Midas Mufflers. 
B) The CPUs purchased by Dell to be used in their computers. 
C) The fertiliser purchased by farmers to produce wheat. 
D) The chicken purchased by Nandos for use in their Peri Peri Chicken. 
E) The CDs purchased by JB Hi Fi for sale to their customers. 
A) A new replacement muffler installed by Midas Mufflers. 
B) The CPUs purchased by Dell to be used in their computers. 
C) The fertiliser purchased by farmers to produce wheat. 
D) The chicken purchased by Nandos for use in their Peri Peri Chicken. 
E) The CDs purchased by JB Hi Fi for sale to their customers.

Question 5

The expenditure approach to measuring GDP is done by using data on only

Accepted Answer

A) consumption expenditure and investment. 
B) consumption expenditure,investment,government expenditure on goods and services,and net exports of goods and services. 
C) consumption expenditure,investment and government expenditures. 
D) consumption expenditure. 
E) wages,rent,interest and profit. 
A) consumption expenditure and investment. 
B) consumption expenditure,investment,government expenditure on goods and services,and net exports of goods and services. 
C) consumption expenditure,investment and government expenditures. 
D) consumption expenditure. 
E) wages,rent,interest and profit.

Question 6

The calculation of GDP excludes the value of

Accepted Answer

A) expenditure on durable goods. 
B) businesses' purchases of new machine tools. 
C) a family member painting the family home. 
D) government expenditure on office supplies. 
E) households' purchases of shampoo. 
A) expenditure on durable goods. 
B) businesses' purchases of new machine tools. 
C) a family member painting the family home. 
D) government expenditure on office supplies. 
E) households' purchases of shampoo.

Question 7

Which of the following is classified as a final good or service?
i.Oranges bought by Boost Juice to use in fresh juices.
ii.Software to be installed in a new Dell computer.
iii.Your purchase of an online subscription to The Australian newspaper.

Accepted Answer

A) iii only 
B) ii only 
C) i,ii and iii 
D) i and ii 
E) ii and iii 
A) iii only 
B) ii only 
C) i,ii and iii 
D) i and ii 
E) ii and iii

Question 8

Gross domestic product is equal to the market value of all the final goods and services ________ in a given period of time.

Accepted Answer

A) produced and consumed within a country 
B) consumed within a country 
C) consumed by the citizens of a country 
D) produced within a country 
E) produced by the citizens of a country 
A) produced and consumed within a country 
B) consumed within a country 
C) consumed by the citizens of a country 
D) produced within a country 
E) produced by the citizens of a country

Question 9

Which of the following would NOT be directly included in Australia's GDP in 2016?

Accepted Answer

A) The market value of restaurant meals sold in 2016. 
B) Legal services provided to first-time home buyers during 2016. 
C) The purchase of a new apartment in Docklands,Melbourne in 2016. 
D) The value of the Falcons produced in 2016 at the Ford plant located in Geelong,Victoria. 
E) The market value of the jet fuel bought by Qantas to use for its flights in 2016. 
A) The market value of restaurant meals sold in 2016. 
B) Legal services provided to first-time home buyers during 2016. 
C) The purchase of a new apartment in Docklands,Melbourne in 2016. 
D) The value of the Falcons produced in 2016 at the Ford plant located in Geelong,Victoria. 
E) The market value of the jet fuel bought by Qantas to use for its flights in 2016.

Question 10

Excluding household and underground production leads to

Accepted Answer

A) underestimation of both real GDP and nominal GDP. 
B) overestimation of real GDP but not nominal GDP. 
C) underestimation of real GDP and overestimation of nominal GDP. 
D) underestimation of real GDP but not nominal GDP. 
E) overestimation of both real GDP and nominal GDP. 
A) underestimation of both real GDP and nominal GDP. 
B) overestimation of real GDP but not nominal GDP. 
C) underestimation of real GDP and overestimation of nominal GDP. 
D) underestimation of real GDP but not nominal GDP. 
E) overestimation of both real GDP and nominal GDP.

Question 11

Nominal GDP can change

Accepted Answer

A) only if prices and the quantities of the goods and services change. 
B) only if prices increase. 
C) only if prices change. 
D) only if the quantities of goods and services change. 
E) if either prices or the quantities of goods and services change. 
A) only if prices and the quantities of the goods and services change. 
B) only if prices increase. 
C) only if prices change. 
D) only if the quantities of goods and services change. 
E) if either prices or the quantities of goods and services change.

Question 12

In 1959/60,real GDP totaled $244 billion and in 2013/14 it totaled $1,558 billion.Between 1959/60 and 2013/14,the population increased from 10 million to 23.5 million.Between 1959/60 and 2013/14,the standard of living based on real GDP per person

Accepted Answer

A) decreased by 9 per cent. 
B) decreased from $125,500 to $28,750. 
C) increased by over 400 per cent. 
D) increased by about 118 per cent. 
E) increased from $23,700 to $66,343. 
A) decreased by 9 per cent. 
B) decreased from $125,500 to $28,750. 
C) increased by over 400 per cent. 
D) increased by about 118 per cent. 
E) increased from $23,700 to $66,343.

Question 13

Pat gives up a $40,000 per year job to stay at home and take care of the house.By so doing,Pat saves $15,000 in child care and house cleaning services which he now performs himself.The direct effect on GDP from Pat's decision is a decrease of

Accepted Answer

A) $25,000. 
B) $30,000. 
C) $40,000. 
D) $15,000. 
E) $55,000. 
A) $25,000. 
B) $30,000. 
C) $40,000. 
D) $15,000. 
E) $55,000.

Question 14

Investment is defined as the purchase of

Accepted Answer

A) financial assets and inventories only. 
B) new capital goods but not additions to inventories. 
C) any financial asset only. 
D) additions to inventories only. 
E) new capital goods and additions to inventories. 
A) financial assets and inventories only. 
B) new capital goods but not additions to inventories. 
C) any financial asset only. 
D) additions to inventories only. 
E) new capital goods and additions to inventories.

Question 15

The income approach values goods and services at factor cost.To get market values we must add

Accepted Answer

A) subsidies and subtract indirect taxes. 
B) wages. 
C) net operating surplus. 
D) indirect taxes and subtract subsidies. 
E) interest,rent and profit. 
A) subsidies and subtract indirect taxes. 
B) wages. 
C) net operating surplus. 
D) indirect taxes and subtract subsidies. 
E) interest,rent and profit.

Question 16

In 2013,the United Nations Human Development Index ranked Australia

Accepted Answer

A) second. 
B) last. 
C) third. 
D) tenth. 
E) first. 
A) second. 
B) last. 
C) third. 
D) tenth. 
E) first.

Question 17

Kelly's Surf Shop orders 5,000 new surfboards at the beginning of the year but only sells 4,500 by the end of the year.How are the 500 unsold surfboards accounted for in gross domestic product?

Accepted Answer

A) They will be included in the government spending category of GDP. 
B) They will be included in the durable consumption category of GDP. 
C) They will be included in the inventory investment category of GDP. 
D) They will be included in the nondurable consumption category of GDP. 
E) They will be included in the residential investment category of GDP. 
A) They will be included in the government spending category of GDP. 
B) They will be included in the durable consumption category of GDP. 
C) They will be included in the inventory investment category of GDP. 
D) They will be included in the nondurable consumption category of GDP. 
E) They will be included in the residential investment category of GDP.

Question 18

Suppose that business firms spend $500 million on new capital equipment this year.Of this $500 million,$300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital.All else being equal,these transactions contribute ________ to GDP.

Accepted Answer

A) $800 million 
B) $0 
C) $500 million 
D) $200 million 
E) $300 million 
A) $800 million 
B) $0 
C) $500 million 
D) $200 million 
E) $300 million

Question 19

The value of leisure time is

Accepted Answer

A) excluded from GDP. 
B) directly included in GDP but,in recent years,has become a decreasing large part of GDP. 
C) directly included in GDP and,in recent years,has not changed much as a fraction of GDP. 
D) zero. 
E) included in GDP and,in recent years,has become an increasing large part of GDP. 
A) excluded from GDP. 
B) directly included in GDP but,in recent years,has become a decreasing large part of GDP. 
C) directly included in GDP and,in recent years,has not changed much as a fraction of GDP. 
D) zero. 
E) included in GDP and,in recent years,has become an increasing large part of GDP.

Question 20

If we use GDP to measure our standard of living,then our procedure is

Accepted Answer

A) inaccurate because our standard of living has nothing to do with goods and services. 
B) inaccurate because our standard of living does not depend only on goods and services. 
C) inaccurate because our standard of living only depends on used goods and services. 
D) accurate only if we use nominal GDP rather than real GDP. 
E) accurate because our standard of living depends solely on goods and services. 
A) inaccurate because our standard of living has nothing to do with goods and services. 
B) inaccurate because our standard of living does not depend only on goods and services. 
C) inaccurate because our standard of living only depends on used goods and services. 
D) accurate only if we use nominal GDP rather than real GDP. 
E) accurate because our standard of living depends solely on goods and services.

How are final goods and services valued when measuring nominal GDP?

A new technology is discovered which results in all new cars producing 50 per cent less pollution.Which of the following is true?

Goods and services such as environmental quality,leisure time and household production are not included in GDP because they are not

Which of the following is a final good or service?

The expenditure approach to measuring GDP is done by using data on only

The calculation of GDP excludes the value of

Which of the following is classified as a final good or service? i.Oranges bought by Boost Juice to use in fresh juices. ii.Software to be installed in a new Dell computer. iii.Your purchase of an online subscription to The Australian newspaper.

Gross domestic product is equal to the market value of all the final goods and services ________ in a given period of time.

Which of the following would NOT be directly included in Australia's GDP in 2016?

Excluding household and underground production leads to

Nominal GDP can change

In 1959/60,real GDP totaled $244 billion and in 2013/14 it totaled $1,558 billion.Between 1959/60 and 2013/14,the population increased from 10 million to 23.5 million.Between 1959/60 and 2013/14,the standard of living based on real GDP per person

Pat gives up a $40,000 per year job to stay at home and take care of the house.By so doing,Pat saves $15,000 in child care and house cleaning services which he now performs himself.The direct effect on GDP from Pat's decision is a decrease of

Investment is defined as the purchase of

The income approach values goods and services at factor cost.To get market values we must add

In 2013,the United Nations Human Development Index ranked Australia

Kelly's Surf Shop orders 5,000 new surfboards at the beginning of the year but only sells 4,500 by the end of the year.How are the 500 unsold surfboards accounted for in gross domestic product?

Suppose that business firms spend $500 million on new capital equipment this year.Of this $500 million,$300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital.All else being equal,these transactions contribute ________ to GDP.

The value of leisure time is

If we use GDP to measure our standard of living,then our procedure is

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance,saving and Investment

Money,the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Trade Off

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 5: Gdp: a Measure of Total Production and Income

How are final goods and services valued when measuring nominal GDP?

A new technology is discovered which results in all new cars producing 50 per cent less pollution.Which of the following is true?

Goods and services such as environmental quality,leisure time and household production are not included in GDP because they are not

Which of the following is a final good or service?

The expenditure approach to measuring GDP is done by using data on only

The calculation of GDP excludes the value of

Which of the following is classified as a final good or service? i.Oranges bought by Boost Juice to use in fresh juices. ii.Software to be installed in a new Dell computer. iii.Your purchase of an online subscription to The Australian newspaper.

Gross domestic product is equal to the market value of all the final goods and services ________ in a given period of time.

Which of the following would NOT be directly included in Australia's GDP in 2016?

Excluding household and underground production leads to

Nominal GDP can change

In 1959/60,real GDP totaled $244 billion and in 2013/14 it totaled $1,558 billion.Between 1959/60 and 2013/14,the population increased from 10 million to 23.5 million.Between 1959/60 and 2013/14,the standard of living based on real GDP per person

Pat gives up a $40,000 per year job to stay at home and take care of the house.By so doing,Pat saves $15,000 in child care and house cleaning services which he now performs himself.The direct effect on GDP from Pat's decision is a decrease of

Investment is defined as the purchase of

The income approach values goods and services at factor cost.To get market values we must add

In 2013,the United Nations Human Development Index ranked Australia

Kelly's Surf Shop orders 5,000 new surfboards at the beginning of the year but only sells 4,500 by the end of the year.How are the 500 unsold surfboards accounted for in gross domestic product?

Suppose that business firms spend $500 million on new capital equipment this year.Of this $500 million,$300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital.All else being equal,these transactions contribute ________ to GDP.

The value of leisure time is

If we use GDP to measure our standard of living,then our procedure is

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance,saving and Investment

Money,the Price Level and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Trade Off

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters