Question 1

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 2

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A)  If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B)  Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C)  Increases in average prices do not affect the calculation of nominal GDP. 
D)  If real GDP increases from one year to the next, we know that production of goods and services has risen. 
A)  If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B)  Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C)  Increases in average prices do not affect the calculation of nominal GDP. 
D)  If real GDP increases from one year to the next, we know that production of goods and services has risen.

Question 3

GDP is not a complete measure of well-being.

Accepted Answer

A) True 
 B)False

Question 4

"Household production" refers to

Accepted Answer

A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves. 
A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves.

Question 5

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Accepted Answer

A) True 
 B)False

Question 6

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Accepted Answer

A)  exports; foreign countries; the United States 
B)  exports; the United States; the United States 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; the United States 
A)  exports; foreign countries; the United States 
B)  exports; the United States; the United States 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; the United States

Question 7

Which of the following would increase GNP in the United States?

Accepted Answer

A)  an increase in the production of U.S.-owned General Motors cars made in Mexico 
B)  an increase in the production of Japanese-owned Toyota cars in Mexico 
C)  an increase in the production of Japanese-owned Toyota cars in the U.S. 
D)  an increase in the production of Mexican-owned Grupo Minsa corn in the U.S. 
A)  an increase in the production of U.S.-owned General Motors cars made in Mexico 
B)  an increase in the production of Japanese-owned Toyota cars in Mexico 
C)  an increase in the production of Japanese-owned Toyota cars in the U.S. 
D)  an increase in the production of Mexican-owned Grupo Minsa corn in the U.S.

Question 8

Why do we subtract import spending from total expenditures?

Accepted Answer

Import spending is defined as spending o

Question 9

Which of the following transactions would take place in the "underground economy"?

Accepted Answer

A)  Elizabeth tells her mother she's going to work but really goes to see a movie. 
B)  Paul buys 15 gallons of gasoline for $3.29 a gallon, not realizing that $1.50 per gallon of that price goes to the government as tax revenue. 
C)  John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes. 
D)  Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it. 
A)  Elizabeth tells her mother she's going to work but really goes to see a movie. 
B)  Paul buys 15 gallons of gasoline for $3.29 a gallon, not realizing that $1.50 per gallon of that price goes to the government as tax revenue. 
C)  John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes. 
D)  Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it.

Question 10

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 11

Economist Robert Higgs showed that World War II brought great increase in the number of consumer goods available to the typical person.

Accepted Answer

A) True 
 B)False

Question 12

An example of an intermediate good would be

Accepted Answer

A)  the bread that goes into a sub sandwich that is sold by Quiznos. 
B)  the soda pop sold by Quiznos. 
C)  a sub sandwich sold by Quiznos. 
D)  the potato chips sold by Quiznos. 
A)  the bread that goes into a sub sandwich that is sold by Quiznos. 
B)  the soda pop sold by Quiznos. 
C)  a sub sandwich sold by Quiznos. 
D)  the potato chips sold by Quiznos.

Question 13

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 the GDP deflator in 2011 if 2011 is the base year?

Accepted Answer

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

Question 14

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Accepted Answer

A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices. 
A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices.

Question 15

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Accepted Answer

Consider the value of an iPhone which co

Question 16

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Accepted Answer

A)  CPI; real GDP; nominal GDP 
B)  GDP deflator; real GDP; nominal GDP 
C)  GDP deflator; nominal GDP; real GDP 
D)  PPI; nominal GDP; real GDP 
E)  PPI; real GDP; nominal GDP 
A)  CPI; real GDP; nominal GDP 
B)  GDP deflator; real GDP; nominal GDP 
C)  GDP deflator; nominal GDP; real GDP 
D)  PPI; nominal GDP; real GDP 
E)  PPI; real GDP; nominal GDP

Question 17

Table 19-4
  
-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 18

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Accepted Answer

A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy 
A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy

Question 19

An inflation rate of 5% between 2011 and 2012 would be implied by a change in the GDP deflator from ________ in 2011 to ________ in 2012.

Accepted Answer

A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390 
A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390

Question 20

If nominal GDP is less than real GDP,then the GDP deflator will be greater than 100.

Accepted Answer

A) True 
 B)False

Gross domestic product is generally ________ national income.

Which of the following is a true statement about real and nominal GDP?

GDP is not a complete measure of well-being.

"Household production" refers to

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .

Which of the following would increase GNP in the United States?

Why do we subtract import spending from total expenditures?

Which of the following transactions would take place in the "underground economy"?

A final good is one that

Economist Robert Higgs showed that World War II brought great increase in the number of consumer goods available to the typical person.

An example of an intermediate good would be

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 the GDP deflator in 2011 if 2011 is the base year?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

Table 19-4 -If real GDP increases we know for sure that

In the circular flow diagram, supply the factors of production,and goods and services.

An inflation rate of 5% between 2011 and 2012 would be implied by a change in the GDP deflator from in 2011 to in 2012.

If nominal GDP is less than real GDP,then the GDP deflator will be greater than 100.

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

Gross domestic product is generally ________ national income.

Which of the following is a true statement about real and nominal GDP?

GDP is not a complete measure of well-being.

"Household production" refers to

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Which of the following would increase GNP in the United States?

Why do we subtract import spending from total expenditures?

Which of the following transactions would take place in the "underground economy"?

A final good is one that

Economist Robert Higgs showed that World War II brought great increase in the number of consumer goods available to the typical person.

An example of an intermediate good would be

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 the GDP deflator in 2011 if 2011 is the base year?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Table 19-4 -If real GDP increases we know for sure that

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

An inflation rate of 5% between 2011 and 2012 would be implied by a change in the GDP deflator from ________ in 2011 to ________ in 2012.

If nominal GDP is less than real GDP,then the GDP deflator will be greater than 100.

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

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

In the circular flow diagram, supply the factors of production,and goods and services.

An inflation rate of 5% between 2011 and 2012 would be implied by a change in the GDP deflator from in 2011 to in 2012.