Question 1

Which of the following equations correctly measures GDP in an economy?

Accepted Answer

A)  GDP = C + I + G + X 
B)  GDP = C + net I + G + NX 
C)  GDP = C + I + G + NX 
D)  GDP = C + G + I - taxes 
A)  GDP = C + I + G + X 
B)  GDP = C + net I + G + NX 
C)  GDP = C + I + G + NX 
D)  GDP = C + G + I - taxes C

Question 2

Table 19-6
   
A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above.
-Refer to Table 19-6. What is nominal GDP in 2011 when 2008 is 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 B

Question 3

If a U.S.firm produces cars in Mexico,that production should count towards

Accepted Answer

A)  U.S. GNP. 
B)  Mexico's GNP. 
C)  U.S. GDP. 
D)  It will not affect either U.S. GNP or U.S. GDP. 
A)  U.S. GNP. 
B)  Mexico's GNP. 
C)  U.S. GDP. 
D)  It will not affect either U.S. GNP or U.S. GDP. A

Question 4

Table 19-4
  
-If prices are rising on average,then

Accepted Answer

A)  real GDP will always be equal to nominal GDP. 
B)  real GDP will be greater than nominal GDP in the years after the base year. 
C)  real GDP will be less than nominal GDP in the years before the base year. 
D)  real GDP will be greater than nominal GDP in the years before the base year. 
A)  real GDP will always be equal to nominal GDP. 
B)  real GDP will be greater than nominal GDP in the years after the base year. 
C)  real GDP will be less than nominal GDP in the years before the base year. 
D)  real GDP will be greater than nominal GDP in the years before the base year.

Question 5

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 6

Table 19-2
  
-Refer to Table 19-2.Suppose that the above table represents the goods and services produced in a very simple economy in 2011.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2011.

Accepted Answer

First,we must decide which goods to incl

Question 7

In an "underground economy",the production of goods and services

Accepted Answer

A)  are not measured nor included in GDP. 
B)  are not measured but are included in GDP. 
C)  are measured and included in GDP. 
D)  are usually too insignificant to be included in GDP. 
A)  are not measured nor included in GDP. 
B)  are not measured but are included in GDP. 
C)  are measured and included in GDP. 
D)  are usually too insignificant to be included in GDP.

Question 8

Which of the following transactions would be included in the official calculation of GDP?

Accepted Answer

A)  A student buys a used textbook at the bookstore. 
B)  Firestone sells $2 million worth of tires to General Motors. 
C)  You wash and wax your father's car as a favor to him. 
D)  You buy a new iPod. 
E)  You illegally download music off the Internet to put on your new iPod. 
A)  A student buys a used textbook at the bookstore. 
B)  Firestone sells $2 million worth of tires to General Motors. 
C)  You wash and wax your father's car as a favor to him. 
D)  You buy a new iPod. 
E)  You illegally download music off the Internet to put on your new iPod.

Question 9

If a German firm produces cars in the United States,that production should count towards

Accepted Answer

A)  U.S. GNP. 
B)  German GDP. 
C)  U.S. GDP. 
D)  both U.S. GNP and German GDP. 
A)  U.S. GNP. 
B)  German GDP. 
C)  U.S. GDP. 
D)  both U.S. GNP and German GDP.

Question 10

Table 19-1
  
-Refer to Table 19-1.Consider the table of production and price statistics for a small economy in 2011.If the economy only produces the four goods listed below,what is GDP for 2011?

Accepted Answer

A)  $428,000 
B)  $267,000 
C)  $24,000 
D)  $1,424 
A)  $428,000 
B)  $267,000 
C)  $24,000 
D)  $1,424

Question 11

In comparing China to Canada,China's relatively ________ growth rate in GDP would make you more likely to take a job in China,and China's relatively ________ level of GDP would make you less likely to take a job in China.

Accepted Answer

A)  high; low 
B)  high; high 
C)  low; low 
D)  low; high 
A)  high; low 
B)  high; high 
C)  low; low 
D)  low; high

Question 12

Table 19-6
   
A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above.
-Refer to Table 19-6.What is real GDP in 2011,using 2008 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 13

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 14

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 15

Table 19-4
  
-In periods when prices are falling,on average,

Accepted Answer

A)  real GDP will grow slower than nominal GDP. 
B)  real GDP will grow faster than nominal GDP. 
C)  real GDP will grow as fast as nominal GDP. 
D)  one cannot calculate real GDP. 
A)  real GDP will grow slower than nominal GDP. 
B)  real GDP will grow faster than nominal GDP. 
C)  real GDP will grow as fast as nominal GDP. 
D)  one cannot calculate real GDP.

Question 16

Table 19-14
  
-Refer to Table 19-14.Based on the table above,what is national income for this economy?

Accepted Answer

A)  $4,700 billion 
B)  $4,000 billion 
C)  $3,150 billion 
D)  $2,450 billion 
A)  $4,700 billion 
B)  $4,000 billion 
C)  $3,150 billion 
D)  $2,450 billion

Question 17

If a country passes a labor law limiting the number of hours of work per week,GDP would ________ and leisure would ________.

Accepted Answer

A)  decrease; increase 
B)  increase; increase 
C)  decrease; decrease 
D)  increase; decrease 
A)  decrease; increase 
B)  increase; increase 
C)  decrease; decrease 
D)  increase; decrease

Question 18

Table 19-9
  
-Refer to Table 19-9.Suppose that a very simple economy produces three goods: pizzas,haircuts,and backpacks.Suppose the quantities produced and their corresponding prices for 2007 and 2011 are shown in the table above.Use the information to compute real GDP in the year 2007 and 2011.Assume that 2007 is the base year.Is output higher in 2011 or 2007? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 19

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 20

National income is derived from gross domestic product by

Accepted Answer

A)  subtracting retained earnings from gross domestic product. 
B)  adding personal taxes and depreciation to gross domestic product. 
C)  subtracting depreciation from gross domestic product. 
D)  adding personal income and transfer payments to gross domestic product. 
A)  subtracting retained earnings from gross domestic product. 
B)  adding personal taxes and depreciation to gross domestic product. 
C)  subtracting depreciation from gross domestic product. 
D)  adding personal income and transfer payments to gross domestic product.

Which of the following equations correctly measures GDP in an economy?

Table 19-6 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above. -Refer to Table 19-6. What is nominal GDP in 2011 when 2008 is the base year?

If a U.S.firm produces cars in Mexico,that production should count towards

Table 19-4 -If prices are rising on average,then

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

Table 19-2 -Refer to Table 19-2.Suppose that the above table represents the goods and services produced in a very simple economy in 2011.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2011.

In an "underground economy",the production of goods and services

Which of the following transactions would be included in the official calculation of GDP?

If a German firm produces cars in the United States,that production should count towards

Table 19-1 -Refer to Table 19-1.Consider the table of production and price statistics for a small economy in 2011.If the economy only produces the four goods listed below,what is GDP for 2011?

In comparing China to Canada,China's relatively growth rate in GDP would make you more likely to take a job in China,and China's relatively level of GDP would make you less likely to take a job in China.

Table 19-6 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above. -Refer to Table 19-6.What is real GDP in 2011,using 2008 as the base year?

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 .

An example of an intermediate good would be

Table 19-4 -In periods when prices are falling,on average,

Table 19-14 -Refer to Table 19-14.Based on the table above,what is national income for this economy?

If a country passes a labor law limiting the number of hours of work per week,GDP would and leisure would .

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

National income is derived from gross domestic product by

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 8: Gdp: Measuring Total Production and Income

Which of the following equations correctly measures GDP in an economy?

Table 19-6 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above. -Refer to Table 19-6. What is nominal GDP in 2011 when 2008 is the base year?

If a U.S.firm produces cars in Mexico,that production should count towards

Table 19-4 -If prices are rising on average,then

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

Table 19-2 -Refer to Table 19-2.Suppose that the above table represents the goods and services produced in a very simple economy in 2011.Assume that steel is used as an input in the production of autos.Using that information,calculate GDP for the year 2011.

In an "underground economy",the production of goods and services

Which of the following transactions would be included in the official calculation of GDP?

If a German firm produces cars in the United States,that production should count towards

Table 19-1 -Refer to Table 19-1.Consider the table of production and price statistics for a small economy in 2011.If the economy only produces the four goods listed below,what is GDP for 2011?

In comparing China to Canada,China's relatively ________ growth rate in GDP would make you more likely to take a job in China,and China's relatively ________ level of GDP would make you less likely to take a job in China.

Table 19-6 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2011 are shown in the table above. -Refer to Table 19-6.What is real GDP in 2011,using 2008 as the base year?

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 ________.

An example of an intermediate good would be

Table 19-4 -In periods when prices are falling,on average,

Table 19-14 -Refer to Table 19-14.Based on the table above,what is national income for this economy?

If a country passes a labor law limiting the number of hours of work per week,GDP would ________ and leisure would ________.

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

National income is derived from gross domestic product by

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In comparing China to Canada,China's relatively growth rate in GDP would make you more likely to take a job in China,and China's relatively level of GDP would make you less likely to take a job in China.

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 a country passes a labor law limiting the number of hours of work per week,GDP would and leisure would .