Question 1

A standard definition of recession is

Accepted Answer

A) a period of expansion in many sectors of the economy. 
B) an increase in GDP that lasts for at least 6 months. 
C) a decrease in GDP that lasts for at least 6 months. 
D) an increase in unemployment from one month to the next. 
E) a period of time when the unemployment rate exceeds 6.5 percent. 
A) a period of expansion in many sectors of the economy. 
B) an increase in GDP that lasts for at least 6 months. 
C) a decrease in GDP that lasts for at least 6 months. 
D) an increase in unemployment from one month to the next. 
E) a period of time when the unemployment rate exceeds 6.5 percent.

Question 2

A business cycle has two turning points, which are the

Accepted Answer

A) recession and trough. 
B) peak and recession. 
C) trough and peak. 
D) expansion and recession. 
E) peak and expansion. 
A) recession and trough. 
B) peak and recession. 
C) trough and peak. 
D) expansion and recession. 
E) peak and expansion.

Question 3

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was

Accepted Answer

A) $24.5 billion. 
B) $34.5 billion. 
C) $36.5 billion. 
D) $34 billion. 
E) undetermined without information about imports. 
A) $24.5 billion. 
B) $34.5 billion. 
C) $36.5 billion. 
D) $34 billion. 
E) undetermined without information about imports.

Question 4

Explain how GDP is measured according to the expenditure and income approaches.

Accepted Answer

GDP can be measured using the expenditur

Question 5

A south sea island produces only coconuts. In 2012, the price of a coconut is $1 and the quantity produced is 200. In 2013, the price of a coconut is $1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 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

Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and imports of goods and services from foreigners is $1.5 million. Calculate this nation's GDP.

Accepted Answer

The nation's GDP equals the sum of consu

Question 7

Consumption goods and services include

Accepted Answer

A) washing machines and tickets to football games. 
B) new homes and existing homes (as long as improvements have been made to the existing home). 
C) tickets to concerts and medical care provided to veterans by the government. 
D) new and used textbooks as long as they are sold via stores or online. 
E) vacation time accumulated by workers. 
A) washing machines and tickets to football games. 
B) new homes and existing homes (as long as improvements have been made to the existing home). 
C) tickets to concerts and medical care provided to veterans by the government. 
D) new and used textbooks as long as they are sold via stores or online. 
E) vacation time accumulated by workers.

Question 8

Is every product produced in the United States included in U.S. gross domestic product?

Accepted Answer

No, not every product produced is includ

Question 9

After calculating net domestic product at factor cost, to calculate GDP using the income approach, in part we must add

Accepted Answer

A) wages. 
B) net operating surplus. 
C) indirect taxes and depreciation. 
D) interest, rent, and profit. 
E) subsidies. 
A) wages. 
B) net operating surplus. 
C) indirect taxes and depreciation. 
D) interest, rent, and profit. 
E) subsidies.

Question 10

Which of the following is included in Germany's GDP?
I. BMWs produced in a German-owned factory in South Carolina
Ii. the value of the stocks sold on the German stock exchange, the Frankfurt Stock Exchange
Iii. china produced by the English-owned Wedgewood Company at a factory in Berlin, Germany

Accepted Answer

A) i and iii 
B) ii only 
C) iii only 
D) i and ii 
E) None of the above answers are correct. 
A) i and iii 
B) ii only 
C) iii only 
D) i and ii 
E) None of the above answers are correct.

Question 11

________ is most likely to contribute to an improvement in our living standard.

Accepted Answer

A) An increase in real GDP 
B) An increase in the price level 
C) A decrease in nominal GDP 
D) An increase in depreciation 
E) An increase in the GDP deflator combined with a decrease in nominal GDP 
A) An increase in real GDP 
B) An increase in the price level 
C) A decrease in nominal GDP 
D) An increase in depreciation 
E) An increase in the GDP deflator combined with a decrease in nominal GDP

Question 12

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 parents' 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 parents' home. 
D) plumbing work completed by Joe Fix-it. 
E) lawn care provided by a local lawn care company.

Question 13

If the statistical discrepancy is zero, in order to calculate GDP from the value of net domestic product at factor cost, we must add

Accepted Answer

A) the value of intermediate goods and subtract the value of imports. 
B) direct taxes, subtract corporate profit, and add investment. 
C) indirect taxes, subtract subsidies, and add depreciation. 
D) subsidies, subtract indirect taxes and depreciation. 
E) indirect taxes, subsidies, and depreciation. 
A) the value of intermediate goods and subtract the value of imports. 
B) direct taxes, subtract corporate profit, and add investment. 
C) indirect taxes, subtract subsidies, and add depreciation. 
D) subsidies, subtract indirect taxes and depreciation. 
E) indirect taxes, subsidies, and depreciation.

Question 14

Bob's Funky T-shirts began the year with 1,000 shirts in inventory, produced 10,000 shirts during the year and ended the year with 1,100 shirts in inventory. The 100 shirts added to his inventory will be classified as

Accepted Answer

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

Question 15

Adding wages, interest, rent, and profits yields

Accepted Answer

A) gross domestic product. 
B) gross domestic product at factor cost. 
C) net domestic product at factor cost. 
D) GNP. 
E) total expenditure. 
A) gross domestic product. 
B) gross domestic product at factor cost. 
C) net domestic product at factor cost. 
D) GNP. 
E) total expenditure.

Question 16

Which of the following is NOT part of the income used in the income approach to measuring GDP?

Accepted Answer

A) wages 
B) rent 
C) interest 
D) taxes paid by persons 
E) profit 
A) wages 
B) rent 
C) interest 
D) taxes paid by persons 
E) profit

Question 17

Which of the following is directly included in the U.S. GDP for 2013?
I. a 2013 Cadillac Escalade produced and sold as a new car in the United States in 2031
Ii. tires produced in the United States, purchased by General Motors, and installed on a new Cadillac Escalade sold in 2013
Iii. General Motors cars produced in Canada because General Motors is an American corporation

Accepted Answer

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

Question 18

The value of leisure time is

Accepted Answer

A) included in GDP and, in recent years, has become an increasing large part of GDP. 
B) excluded from GDP. 
C) zero. 
D) directly included in GDP but, in recent years, has become a decreasing large part of GDP. 
E) directly included in GDP and, in recent years, has not changed much as a fraction of GDP. 
A) included in GDP and, in recent years, has become an increasing large part of GDP. 
B) excluded from GDP. 
C) zero. 
D) directly included in GDP but, in recent years, has become a decreasing large part of GDP. 
E) directly included in GDP and, in recent years, has not changed much as a fraction of GDP.

Question 19

You hire some of your friends to help you move to a new house. You pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true?

Accepted Answer

A) The $200 should be counted as part of GDP but not the dinner at Pizza Hut. 
B) If your friends do not report the $200 on their tax forms, it becomes part of the underground economy. 
C) The dinner at Pizza Hut should be counted as part of GDP but not the $200. 
D) Hiring your friends is an illegal activity and should not be counted in GDP. 
E) Neither the $200 nor the dinner should be counted in GDP because both are household production. 
A) The $200 should be counted as part of GDP but not the dinner at Pizza Hut. 
B) If your friends do not report the $200 on their tax forms, it becomes part of the underground economy. 
C) The dinner at Pizza Hut should be counted as part of GDP but not the $200. 
D) Hiring your friends is an illegal activity and should not be counted in GDP. 
E) Neither the $200 nor the dinner should be counted in GDP because both are household production.

Question 20

To calculate GDP using the income approach, one of the adjustments made to net domestic product at factor cost is to

Accepted Answer

A) add depreciation. 
B) add investment. 
C) subtract investment. 
D) add consumption expenditure. 
E) subtract indirect taxes less subsidies. 
A) add depreciation. 
B) add investment. 
C) subtract investment. 
D) add consumption expenditure. 
E) subtract indirect taxes less subsidies.

A standard definition of recession is

A business cycle has two turning points, which are the

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was

Explain how GDP is measured according to the expenditure and income approaches.

A south sea island produces only coconuts. In 2012, the price of a coconut is $1 and the quantity produced is 200. In 2013, the price of a coconut is $1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 is ________.

Consumption goods and services include

Is every product produced in the United States included in U.S. gross domestic product?

After calculating net domestic product at factor cost, to calculate GDP using the income approach, in part we must add

Which of the following is included in Germany's GDP? I. BMWs produced in a German-owned factory in South Carolina Ii. the value of the stocks sold on the German stock exchange, the Frankfurt Stock Exchange Iii. china produced by the English-owned Wedgewood Company at a factory in Berlin, Germany

________ is most likely to contribute to an improvement in our living standard.

An example of household production excluded from GDP is

If the statistical discrepancy is zero, in order to calculate GDP from the value of net domestic product at factor cost, we must add

Bob's Funky T-shirts began the year with 1,000 shirts in inventory, produced 10,000 shirts during the year and ended the year with 1,100 shirts in inventory. The 100 shirts added to his inventory will be classified as

Adding wages, interest, rent, and profits yields

Which of the following is NOT part of the income used in the income approach to measuring GDP?

The value of leisure time is

You hire some of your friends to help you move to a new house. You pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true?

To calculate GDP using the income approach, one of the adjustments made to net domestic product at factor cost is to

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 14: Gdp: a Measure of Total Production and Income

A standard definition of recession is

A business cycle has two turning points, which are the

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was

Explain how GDP is measured according to the expenditure and income approaches.

A south sea island produces only coconuts. In 2012, the price of a coconut is $1 and the quantity produced is 200. In 2013, the price of a coconut is $1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 is ________.

Consumption goods and services include

Is every product produced in the United States included in U.S. gross domestic product?

After calculating net domestic product at factor cost, to calculate GDP using the income approach, in part we must add

Which of the following is included in Germany's GDP? I. BMWs produced in a German-owned factory in South Carolina Ii. the value of the stocks sold on the German stock exchange, the Frankfurt Stock Exchange Iii. china produced by the English-owned Wedgewood Company at a factory in Berlin, Germany

________ is most likely to contribute to an improvement in our living standard.

An example of household production excluded from GDP is

If the statistical discrepancy is zero, in order to calculate GDP from the value of net domestic product at factor cost, we must add

Bob's Funky T-shirts began the year with 1,000 shirts in inventory, produced 10,000 shirts during the year and ended the year with 1,100 shirts in inventory. The 100 shirts added to his inventory will be classified as

Adding wages, interest, rent, and profits yields

Which of the following is NOT part of the income used in the income approach to measuring GDP?

The value of leisure time is

You hire some of your friends to help you move to a new house. You pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true?

To calculate GDP using the income approach, one of the adjustments made to net domestic product at factor cost is to

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters