Question 1

When the value of nominal GDP increases from one year to the next, we know that one or two things must have happened during that time

Accepted Answer

A)  The nation produced fewer goods and services and/or prices fell for goods and services. 
B)  Consumption expenditure increased and/or corporate profits increased. 
C)  Investment increased and/or payments to employees increased. 
D)  The nation produced more goods and services and/or prices rose for goods and services. 
E)  the value of real GDP must have increased and/or the price level must have decreased. 
A)  The nation produced fewer goods and services and/or prices fell for goods and services. 
B)  Consumption expenditure increased and/or corporate profits increased. 
C)  Investment increased and/or payments to employees increased. 
D)  The nation produced more goods and services and/or prices rose for goods and services. 
E)  the value of real GDP must have increased and/or the price level must have decreased.

Question 2

The expenditure approach to measuring GDP is based on summing

Accepted Answer

A)  wages, interest, rent, and profit. 
B)  each industry's production. 
C)  the total values of final goods, intermediate goods and services, used goods, and financial assets. 
D)  consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services. 
E)  consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services minus wages, interest, rent, and profit. 
A)  wages, interest, rent, and profit. 
B)  each industry's production. 
C)  the total values of final goods, intermediate goods and services, used goods, and financial assets. 
D)  consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services. 
E)  consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services minus wages, interest, rent, and profit.

Question 3

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2010 and 2011 are given in the table above.Between 2010 and 2011, which grew more rapidly: Nominal GDP or real GDP?

Accepted Answer

A)  nominal GDP grew more rapidly 
B)  real GDP grew more rapidly 
C)  both grew at the same rate 
D)  Because real GDP and nominal GDP use different prices, it is not possible to determine which grew most rapidly. 
E)  More information is needed to determine which grew more rapidly. 
A)  nominal GDP grew more rapidly 
B)  real GDP grew more rapidly 
C)  both grew at the same rate 
D)  Because real GDP and nominal GDP use different prices, it is not possible to determine which grew most rapidly. 
E)  More information is needed to determine which grew more rapidly.

Question 4

When measuring GDP,

Accepted Answer

A)  the government sector is not included because it is the public sector not the private sector. 
B)  the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue. 
C)  only the federal government's expenditure on goods and services are included. 
D)  the expenditure on goods and services by all levels of government are included. 
E)  the government sector is not counted because it does not produce goods and services. 
A)  the government sector is not included because it is the public sector not the private sector. 
B)  the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue. 
C)  only the federal government's expenditure on goods and services are included. 
D)  the expenditure on goods and services by all levels of government are included. 
E)  the government sector is not counted because it does not produce goods and services.

Question 5

An example of household production excluded from GDP is

Accepted Answer

A)  household cleaning services provided by Merry Maids Incorporated. 
B)  child care provided by a certified nanny. 
C)  tree trimming you provide at your parent's home. 
D)  plumbing work completed by Joe Fix-it. 
E)  lawn care provided by a local lawn care company. 
A)  household cleaning services provided by Merry Maids Incorporated. 
B)  child care provided by a certified nanny. 
C)  tree trimming you provide at your parent's home. 
D)  plumbing work completed by Joe Fix-it. 
E)  lawn care provided by a local lawn care company.

Question 6

Recently, the government made adjustments to how GDP is calculated that included placing software purchases into the category of

Accepted Answer

A)  intermediate goods because software is not a final good. 
B)  inventory and now software purchases are not directly counted as part of GDP. 
C)  investment and now directly counts software purchases as part of GDP. 
D)  net exports of goods and services because most software is written abroad. 
E)  net operating surplus. 
A)  intermediate goods because software is not a final good. 
B)  inventory and now software purchases are not directly counted as part of GDP. 
C)  investment and now directly counts software purchases as part of GDP. 
D)  net exports of goods and services because most software is written abroad. 
E)  net operating surplus.

Question 7

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in the United States

Accepted Answer

A)  government expenditure on goods and services is the largest category. 
B)  investment is the largest category. 
C)  investment is much larger than government expenditure on goods and services. 
D)  investment is about the same size as government expenditure on goods and services. 
E)  investment, government expenditure on goods and services, and consumption expenditure are all about the same size. 
A)  government expenditure on goods and services is the largest category. 
B)  investment is the largest category. 
C)  investment is much larger than government expenditure on goods and services. 
D)  investment is about the same size as government expenditure on goods and services. 
E)  investment, government expenditure on goods and services, and consumption expenditure are all about the same size.

Question 8

The income approach to measuring GDP is based on summing

Accepted Answer

A)  the production of each industry. 
B)  wages, interest, rent, and profits. 
C)  the values of final goods, intermediate goods and services, used goods, and financial assets. 
D)  consumption expenditure, investment, government expenditures on goods and services, and net exports of goods and services. 
E)  consumption expenditure and wages. 
A)  the production of each industry. 
B)  wages, interest, rent, and profits. 
C)  the values of final goods, intermediate goods and services, used goods, and financial assets. 
D)  consumption expenditure, investment, government expenditures on goods and services, and net exports of goods and services. 
E)  consumption expenditure and wages.

Question 9

The largest expenditure category in the United States is

Accepted Answer

A)  consumption expenditure. 
B)  investment. 
C)  government expenditure on goods and services. 
D)  net exports of goods and services. 
E)  wages. 
A)  consumption expenditure. 
B)  investment. 
C)  government expenditure on goods and services. 
D)  net exports of goods and services. 
E)  wages.

Question 10

Which of the following is NOT part of the business cycle?

Accepted Answer

A)  recession 
B)  peak 
C)  inflation 
D)  trough 
E)  expansion 
A)  recession 
B)  peak 
C)  inflation 
D)  trough 
E)  expansion

Question 11

Nominal GDP increases

Accepted Answer

A)  only if total production increases. 
B)  only if prices increase. 
C)  if either prices and/or total production increase. 
D)  only if the productivity of resources increase. 
E)  only if depreciation decreases. 
A)  only if total production increases. 
B)  only if prices increase. 
C)  if either prices and/or total production increase. 
D)  only if the productivity of resources increase. 
E)  only if depreciation decreases.

Question 12

Investment, as included in GDP, consists of what?

Accepted Answer

Investment is the purchase of new capita

Question 13

Real GDP measures the value of goods and services produced in a given year using

Accepted Answer

A)  base year prices. 
B)  prices of that same year. 
C)  no prices. 
D)  future prices. 
E)  government approved prices. 
A)  base year prices. 
B)  prices of that same year. 
C)  no prices. 
D)  future prices. 
E)  government approved prices.

Question 14

As measured, GDP omits which of the following?
i. Illegal sales of goods and services.
ii. Changes in the amount of leisure time.
iii. Household production of goods and services.

Accepted Answer

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

When the value of nominal GDP increases from one year to the next, we know that one or two things must have happened during that time

The expenditure approach to measuring GDP is based on summing

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2010 and 2011 are given in the table above.Between 2010 and 2011, which grew more rapidly: Nominal GDP or real GDP?

When measuring GDP,

An example of household production excluded from GDP is

Recently, the government made adjustments to how GDP is calculated that included placing software purchases into the category of

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in the United States

The income approach to measuring GDP is based on summing

The largest expenditure category in the United States is

Which of the following is NOT part of the business cycle?

Nominal GDP increases

Investment, as included in GDP, consists of what?

Real GDP measures the value of goods and services produced in a given year using

As measured, GDP omits which of the following? i. Illegal sales of goods and services. ii. Changes in the amount of leisure time. iii. Household production of goods and services.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

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

When the value of nominal GDP increases from one year to the next, we know that one or two things must have happened during that time

The expenditure approach to measuring GDP is based on summing

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2010 and 2011 are given in the table above.Between 2010 and 2011, which grew more rapidly: Nominal GDP or real GDP?

When measuring GDP,

An example of household production excluded from GDP is

Recently, the government made adjustments to how GDP is calculated that included placing software purchases into the category of

In comparing the magnitudes of the components of GDP according to the expenditure approach, we see that in the United States

The income approach to measuring GDP is based on summing

The largest expenditure category in the United States is

Which of the following is NOT part of the business cycle?

Nominal GDP increases

Investment, as included in GDP, consists of what?

Real GDP measures the value of goods and services produced in a given year using

As measured, GDP omits which of the following? i. Illegal sales of goods and services. ii. Changes in the amount of leisure time. iii. Household production of goods and services.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters