Question 1

Which of the following accurately describes an effect of hurricane Katrina on GDP?

Accepted Answer

A)  GDP would decrease reflecting the costs of cleanup. 
B)  GDP would increase reflecting the costs of cleanup. 
C)  GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D)  GDP would increase well-being. 
A)  GDP would decrease reflecting the costs of cleanup. 
B)  GDP would increase reflecting the costs of cleanup. 
C)  GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D)  GDP would increase well-being.

Question 2

The "underground economy" is also referred to as

Accepted Answer

A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy. 
A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy.

Question 3

Which of the following is a true statement about the impact of World War II on the U.S.economy?

Accepted Answer

A)  U.S. GDP decreased dramatically from 1941 to 1945. 
B)  The war time years were a period of prosperity for U.S. consumers. 
C)  Less than 10% of the labor force was in the military or producing war goods. 
D)  Increased production of tanks, ships, planes, and munitions accounted for most of the increase in GDP. 
A)  U.S. GDP decreased dramatically from 1941 to 1945. 
B)  The war time years were a period of prosperity for U.S. consumers. 
C)  Less than 10% of the labor force was in the military or producing war goods. 
D)  Increased production of tanks, ships, planes, and munitions accounted for most of the increase in GDP.

Question 4

The largest component of spending in GDP is

Accepted Answer

A)  consumption spending. 
B)  investment spending. 
C)  government spending. 
D)  net export spending. 
A)  consumption spending. 
B)  investment spending. 
C)  government spending. 
D)  net export spending.

Question 5

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 6

Which component of consumption spending is the greatest in a typical economy?

Accepted Answer

A)  services 
B)  durable goods 
C)  nondurable goods 
D)  new housing 
A)  services 
B)  durable goods 
C)  nondurable goods 
D)  new housing

Question 7

In a small economy,consumption spending in 2012 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2012?

Accepted Answer

A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700 
A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700

Question 8

GDP is not a perfect measure of well-being because

Accepted Answer

A)  the value of leisure is included in GDP. 
B)  GDP is not adjusted for pollution. 
C)  GDP is adjusted for changes in crime rates. 
D)  GDP is adjusted for increases in drug addiction. 
A)  the value of leisure is included in GDP. 
B)  GDP is not adjusted for pollution. 
C)  GDP is adjusted for changes in crime rates. 
D)  GDP is adjusted for increases in drug addiction.

Question 9

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 2011 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 10

If the GDP deflator is 142,by how much have prices changed since the base year?

Accepted Answer

A)  Prices have increased by 42%. 
B)  Prices have increased by 142%. 
C)  Prices have decreased by 4.2%. 
D)  Prices have increased by 58%. 
A)  Prices have increased by 42%. 
B)  Prices have increased by 142%. 
C)  Prices have decreased by 4.2%. 
D)  Prices have increased by 58%.

Question 11

________ is/are the payment for the factor of production ________.

Accepted Answer

A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital 
A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital

Question 12

The drawback to calculating real GDP using base-year prices is that

Accepted Answer

A)  real GDP in one year is not comparable to real GDP in another year. 
B)  relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C)  relative prices change over time and these changes are reflected in base-year prices. 
D)  quality changes are reflected in base-year prices. 
A)  real GDP in one year is not comparable to real GDP in another year. 
B)  relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C)  relative prices change over time and these changes are reflected in base-year prices. 
D)  quality changes are reflected in base-year prices.

Question 13

Export growth in Canada will help increase Canadian GDP because

Accepted Answer

A)  an increase in exports will increase net exports, assuming no change in imports. 
B)  growth in exports indicates a decline in imports. 
C)  exports are added to imports when calculating GDP, causing GDP to increase. 
D)  exports are subtracted from imports when calculating GDP. 
A)  an increase in exports will increase net exports, assuming no change in imports. 
B)  growth in exports indicates a decline in imports. 
C)  exports are added to imports when calculating GDP, causing GDP to increase. 
D)  exports are subtracted from imports when calculating GDP.

Question 14

Table 19-5
   
A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006 and 2011 are shown in the table above.
-Refer to Table 19-5.What is real GDP in 2011,using 2006 as the base year?

Accepted Answer

A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035 
A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035

Question 15

Government spending ________ is included in gross domestic product.

Accepted Answer

A)  at federal, state, and local levels of government 
B)  at the federal level of government only 
C)  at state and local levels of government only 
D)  on defense goods only 
A)  at federal, state, and local levels of government 
B)  at the federal level of government only 
C)  at state and local levels of government only 
D)  on defense goods only

Question 16

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Accepted Answer

The underground economy is that part of

Question 17

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 18

Table 19-10
  
-Refer to Table 19-10.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. Calculate real GDP in 2011 assuming the base year is 2007. Do the same calculation assuming the base year is 2011.Are the calculations different? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 19

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago,

Accepted Answer

A)  workers in the United States are worse off than they were over 100 years ago. 
B)  workers in the United States earn less income than they did over 100 years ago. 
C)  GDP is lower than it would be if U.S. workers worked the same workweek they had 100 years ago. 
D)  GDP is higher than it would be if U.S. workers worked the same workweek they had 100 years ago. 
A)  workers in the United States are worse off than they were over 100 years ago. 
B)  workers in the United States earn less income than they did over 100 years ago. 
C)  GDP is lower than it would be if U.S. workers worked the same workweek they had 100 years ago. 
D)  GDP is higher than it would be if U.S. workers worked the same workweek they had 100 years ago.

Question 20

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.

Which of the following accurately describes an effect of hurricane Katrina on GDP?

The "underground economy" is also referred to as

Which of the following is a true statement about the impact of World War II on the U.S.economy?

The largest component of spending in GDP is

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

Which component of consumption spending is the greatest in a typical economy?

In a small economy,consumption spending in 2012 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2012?

GDP is not a perfect measure of well-being because

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 2011 as the base year?

If the GDP deflator is 142,by how much have prices changed since the base year?

is/are the payment for the factor of production .

The drawback to calculating real GDP using base-year prices is that

Export growth in Canada will help increase Canadian GDP because

Table 19-5 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006 and 2011 are shown in the table above. -Refer to Table 19-5.What is real GDP in 2011,using 2006 as the base year?

Government spending ________ is included in gross domestic product.

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

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

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago,

An example of a transfer payment is

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 accurately describes an effect of hurricane Katrina on GDP?

The "underground economy" is also referred to as

Which of the following is a true statement about the impact of World War II on the U.S.economy?

The largest component of spending in GDP is

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

Which component of consumption spending is the greatest in a typical economy?

In a small economy,consumption spending in 2012 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2012?

GDP is not a perfect measure of well-being because

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 2011 as the base year?

If the GDP deflator is 142,by how much have prices changed since the base year?

________ is/are the payment for the factor of production ________.

The drawback to calculating real GDP using base-year prices is that

Export growth in Canada will help increase Canadian GDP because

Table 19-5 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006 and 2011 are shown in the table above. -Refer to Table 19-5.What is real GDP in 2011,using 2006 as the base year?

Government spending ________ is included in gross domestic product.

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

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

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago,

An example of a transfer payment is

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

is/are the payment for the factor of production .