Question 1

According to the expenditure approach to measuring GDP, in the United States , the largest component of GDP 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 2

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

Question 3

Which of the following is NOT directly included in Canadian GDP?

Accepted Answer

A)  The purchase of tickets to a Kanye West concert in Montreal. 
B)  The sale of tickets to the Vancouver Oympics to U.S.citizens. 
C)  Gasoline purchased by a tour bus operator in Quebec. 
D)  Bus tickets sold to tourists for a tour bus ride in Montreal. 
E)  All of the items would be included in Canadian GDP. 
A)  The purchase of tickets to a Kanye West concert in Montreal. 
B)  The sale of tickets to the Vancouver Oympics to U.S.citizens. 
C)  Gasoline purchased by a tour bus operator in Quebec. 
D)  Bus tickets sold to tourists for a tour bus ride in Montreal. 
E)  All of the items would be included in Canadian GDP.

Question 4

-Based on the figure above, in which quarter or quarters did a recession occur?

Accepted Answer

A)  between 2004, 2nd quarter to 2005, 2nd quarter and also between 2006, 2nd quarter to the end of the figure 
B)  in 2005, 2nd quarter 
C)  between 2005, 2nd quarter to 2006, 2nd quarter 
D)  in 2005, 2nd quarter. 
E)  after 2005, 2nd quarter 
A)  between 2004, 2nd quarter to 2005, 2nd quarter and also between 2006, 2nd quarter to the end of the figure 
B)  in 2005, 2nd quarter 
C)  between 2005, 2nd quarter to 2006, 2nd quarter 
D)  in 2005, 2nd quarter. 
E)  after 2005, 2nd quarter

Question 5

A south sea island produces only coconuts.In 2008, the price of a coconut is $1 and the quantity produced is 200.In 2009, the price of a coconut is $1.50 and the quantity produced is 250.2008 is the base year.Real GDP in 2009 is ________.

Accepted Answer

A)  $375 
B)  $350 
C)  $200 
D)  $250 
E)  $1.50 
A)  $375 
B)  $350 
C)  $200 
D)  $250 
E)  $1.50

Question 6

When calculating real GDP, the reference base year

Accepted Answer

A)  allows us to account for changes in GNP compared to GDP. 
B)  always reduces the value of GDP compared to GNP. 
C)  allows us to calculate the value of the goods and services in terms of prices of that base year. 
D)  usually increases the value of GNP compared to GDP. 
E)  allows us to increase the value of goods and services. 
A)  allows us to account for changes in GNP compared to GDP. 
B)  always reduces the value of GDP compared to GNP. 
C)  allows us to calculate the value of the goods and services in terms of prices of that base year. 
D)  usually increases the value of GNP compared to GDP. 
E)  allows us to increase the value of goods and services.

Question 7

Nominal GDP is GDP

Accepted Answer

A)  using current market values. 
B)  during a recession. 
C)  minus depreciation. 
D)  after adjusting for any price changes. 
E)  that ignores depreciation. 
A)  using current market values. 
B)  during a recession. 
C)  minus depreciation. 
D)  after adjusting for any price changes. 
E)  that ignores depreciation.

Question 8

Once the categories of income are totaled, the sum is called

Accepted Answer

A)  "GDP measured by the income approach." 
B)  "net domestic product at factor cost" and is not equal to GDP. 
C)  "net domestic product at factor cost" and is equal to GDP. 
D)  "total income earned" and is equal to GDP. 
E)  GNP and is not equal to GDP. 
A)  "GDP measured by the income approach." 
B)  "net domestic product at factor cost" and is not equal to GDP. 
C)  "net domestic product at factor cost" and is equal to GDP. 
D)  "total income earned" and is equal to GDP. 
E)  GNP and is not equal to GDP.

Question 9

List and discuss various types of goods and services omitted from measured GDP.

Accepted Answer

Household production, such as preparing

Question 10

Explain how the United Nations uses the Human Development Index (HDI) to better measure the standard of living around the globe.

Accepted Answer

Economists have long realized that the l

Question 11

This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars.Which of the following is true?

Accepted Answer

A)  GDP for this year will increase by $100 million. 
B)  GDP for this year will increase by $102 million. 
C)  Inventory investment will increase by $2 million. 
D)  GDP for this year will increase by $202 million. 
E)  The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period. 
A)  GDP for this year will increase by $100 million. 
B)  GDP for this year will increase by $102 million. 
C)  Inventory investment will increase by $2 million. 
D)  GDP for this year will increase by $202 million. 
E)  The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period.

Question 12

The calculation of GDP excludes the value of

Accepted Answer

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

Question 13

What must be done to net domestic product at factor cost in order to transform it to gross domestic product?
 Explain why these adjustments are necessary.

Accepted Answer

Several adjustments must be made to net

Question 14

Net exports of goods and services is equal to the value of

Accepted Answer

A)  exports plus the value of imports. 
B)  imports minus the value of exports. 
C)  domestic consumption minus the value of imports. 
D)  exports minus the value of imports. 
E)  domestic consumption minus the value of exports. 
A)  exports plus the value of imports. 
B)  imports minus the value of exports. 
C)  domestic consumption minus the value of imports. 
D)  exports minus the value of imports. 
E)  domestic consumption minus the value of exports.

Question 15

In order to measure gross domestic product, we can follow

Accepted Answer

A)  only one approach: the circular flow approach. 
B)  only one approach: the national accounts approach. 
C)  two approaches: the expenditure approach and the income approach. 
D)  three approaches: the expenditure approach, the income approach, and the production approach. 
E)  three approaches: the expenditure approach, the income approach, and the market-based approach. 
A)  only one approach: the circular flow approach. 
B)  only one approach: the national accounts approach. 
C)  two approaches: the expenditure approach and the income approach. 
D)  three approaches: the expenditure approach, the income approach, and the production approach. 
E)  three approaches: the expenditure approach, the income approach, and the market-based approach.

Question 16

$\begin{array}{lr}
{\text { Item }} & \text { Billions of dollars } \
\hline \text { Wages } & 5,000 \
\text { Consumption expenditure } & 3,500 \
\text { Interest, rent, and profit } & 1,500 \
\text { Investment } & 1,200 \
\text { Statistical discrepancy } & 0 \
\text { Net exports } & -300 \
\text { Indirect taxes minus subsidies } & 500 \
\text { Depreciation } & 800
\end{array}$
-The table above has information about an economy.Using this information, GDP equals

Accepted Answer

A)  $6,500 billion. 
B)  $7,800 billion. 
C)  $7,000 billion. 
D)  $8,500 billion. 
E)  some amount that cannot be calculated without information on the amount of government expenditures. 
A)  $6,500 billion. 
B)  $7,800 billion. 
C)  $7,000 billion. 
D)  $8,500 billion. 
E)  some amount that cannot be calculated without information on the amount of government expenditures.

Question 17

Which of the following are included in interest income?
i. payments made for the use of land
ii. income paid to households for loans they make
iii. payments made by households for their borrowing

Accepted Answer

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

Question 18

Is it possible for nominal GDP to increase while real GDP does not change?

Accepted Answer

Yes, it is possible for nominal GDP to i

Question 19

If nominal GDP increases this year, then real GDP

Accepted Answer

A)  must decrease. 
B)  must increase. 
C)  must not change. 
D)  could increase, decrease, or not change. 
E)  could either increase or not change but cannot decrease. 
A)  must decrease. 
B)  must increase. 
C)  must not change. 
D)  could increase, decrease, or not change. 
E)  could either increase or not change but cannot decrease.

Question 20

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

Accepted Answer

They are all equal.The value of producti

According to the expenditure approach to measuring GDP, in the United States , the largest component of GDP is

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

Which of the following is NOT directly included in Canadian GDP?

-Based on the figure above, in which quarter or quarters did a recession occur?

A south sea island produces only coconuts.In 2008, the price of a coconut is $1 and the quantity produced is 200.In 2009, the price of a coconut is $1.50 and the quantity produced is 250.2008 is the base year.Real GDP in 2009 is ________.

When calculating real GDP, the reference base year

Nominal GDP is GDP

Once the categories of income are totaled, the sum is called

List and discuss various types of goods and services omitted from measured GDP.

Explain how the United Nations uses the Human Development Index (HDI) to better measure the standard of living around the globe.

This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars.Which of the following is true?

The calculation of GDP excludes the value of

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

Net exports of goods and services is equal to the value of

In order to measure gross domestic product, we can follow

Item Billions of dollars Wages 5,000 Consumption expenditure 3,500 Interest, rent, and profit 1,500 Investment 1,200 Statistical discrepancy 0 Net exports -300 Indirect taxes minus subsidies 500 Depreciation 800 -The table above has information about an economy.Using this information, GDP equals

Which of the following are included in interest income? i. payments made for the use of land ii. income paid to households for loans they make iii. payments made by households for their borrowing

Is it possible for nominal GDP to increase while real GDP does not change?

If nominal GDP increases this year, then real GDP

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

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

According to the expenditure approach to measuring GDP, in the United States , the largest component of GDP is

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

Which of the following is NOT directly included in Canadian GDP?

-Based on the figure above, in which quarter or quarters did a recession occur?

A south sea island produces only coconuts.In 2008, the price of a coconut is $1 and the quantity produced is 200.In 2009, the price of a coconut is $1.50 and the quantity produced is 250.2008 is the base year.Real GDP in 2009 is ________.

When calculating real GDP, the reference base year

Nominal GDP is GDP

Once the categories of income are totaled, the sum is called

List and discuss various types of goods and services omitted from measured GDP.

Explain how the United Nations uses the Human Development Index (HDI) to better measure the standard of living around the globe.

This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars.Which of the following is true?

The calculation of GDP excludes the value of

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

Net exports of goods and services is equal to the value of

In order to measure gross domestic product, we can follow

Item Billions of dollars Wages 5,000 Consumption expenditure 3,500 Interest, rent, and profit 1,500 Investment 1,200 Statistical discrepancy 0 Net exports -300 Indirect taxes minus subsidies 500 Depreciation 800 -The table above has information about an economy.Using this information, GDP equals

Which of the following are included in interest income? i. payments made for the use of land ii. income paid to households for loans they make iii. payments made by households for their borrowing

Is it possible for nominal GDP to increase while real GDP does not change?

If nominal GDP increases this year, then real GDP

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

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