Question 1

Which of the following describe the United States economy in 2008 and and the start of 2009?

Accepted Answer

A) The economy was in an expansion. 
B) The economy was in a recession. 
C) Real GDP per person increased. 
D) Real GDP reached a peak. 
E) None of the above answers is correct. 
A) The economy was in an expansion. 
B) The economy was in a recession. 
C) Real GDP per person increased. 
D) Real GDP reached a peak. 
E) None of the above answers is correct.

Question 2

Which of the following is a final good or service?

Accepted Answer

A) tires purchased by Ford for use on one of their SUVs 
B) the new economics textbook you are using 
C) the hair gels used by a hair stylist at the local hair salon 
D) the butter used by a chef to make butter cream frosting 
E) the taco shells purchased by Taco Bell for use in their tacos 
A) tires purchased by Ford for use on one of their SUVs 
B) the new economics textbook you are using 
C) the hair gels used by a hair stylist at the local hair salon 
D) the butter used by a chef to make butter cream frosting 
E) the taco shells purchased by Taco Bell for use in their tacos

Question 3

The sum of all the income categories listed in the National Income and Product Accounts adds up to

Accepted Answer

A) gross domestic product. 
B) net national product. 
C) disposable income after taxes. 
D) net domestic product at factor cost. 
E) gross national product. 
A) gross domestic product. 
B) net national product. 
C) disposable income after taxes. 
D) net domestic product at factor cost. 
E) gross national product.

Question 4

-Based on the figure above, in which quarter or quarters did a trough 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 2006, 2nd quarter 
E) There are no troughs illustrated in the figure. 
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 2006, 2nd quarter 
E) There are no troughs illustrated in the figure.

Question 5

$$\begin{array} { l r } 
 { \text { Item } } & \text { Billions of dollars } \
\hline \text { Consumption expenditure } & 6,258 \
\text { Investment } & 1,623 \
\text { Government expenditure on goods and services } & 1,630 \
\text { Exports of goods and services } & 998 \
\text { Imports of goods and services } & 1,252
\end{array}$$
-The table above gives the values of different expenditures in the United States during 1999. Answer the following questions about the United States.
a. What was the value of net exports of goods and services in 1999?
b. What was (nominal)GDP equal to in 1999?
c. What was the (nominal)value of total production equal to in 1999?

Accepted Answer

a. Net exports of goods and services equ

Question 6

Which of the following is classified as an intermediate good?
i. the purchase of a Big Mac by a college student
ii. McDonald's purchase of pickles
iii. a McDonald's restaurant owner's interest payment for the loan on her building.

Accepted Answer

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

Question 7

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. Between 2012 and 2013, 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 8

$\begin{array}{lr}
{\text { Item }} & \text { Billions of dollars } \
\hline \text { Consumption expenditure } & 4,000 \
\text { Interest, rent, and profit } & 300 \
\text { Investment } & 1,000 \
\text { Deprediation } & 400 \
\text { Government expenditure on goods and services } & 1,000 \
\text { Net exports of goods and services } & 200
\end{array}$
-The table gives data for a nation. What is the amount of the country's GDP?

Accepted Answer

A) $6,000 billion 
B) $6,200 billion 
C) $6,600 billion 
D) $6,900 billion 
E) $5,800 billion 
A) $6,000 billion 
B) $6,200 billion 
C) $6,600 billion 
D) $6,900 billion 
E) $5,800 billion

Question 9

The underground economy ________.

Accepted Answer

A) is measured by government officials through tax returns 
B) is difficult to describe but easy to measure 
C) includes production that uses illegal workers who are paid less than minimum wage 
D) includes mining production 
E) is estimated by the government and the estimate is part of official GDP 
A) is measured by government officials through tax returns 
B) is difficult to describe but easy to measure 
C) includes production that uses illegal workers who are paid less than minimum wage 
D) includes mining production 
E) is estimated by the government and the estimate is part of official GDP

Question 10

Leisure time is ignored when calculating GDP because leisure time

Accepted Answer

A) does not effect our standard of living. 
B) has been declining over time. 
C) is not an economic good. 
D) is not bought in a market. 
E) is not productive. 
A) does not effect our standard of living. 
B) has been declining over time. 
C) is not an economic good. 
D) is not bought in a market. 
E) is not productive.

Question 11

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Accepted Answer

A) Real GDP fluctuates around potential GDP. 
B) Real GDP is always equal to potential GDP. 
C) Real GDP cannot be greater than potential GDP. 
D) Real GDP cannot be less than potential GDP. 
E) Real GDP cannot be equal to potential GDP. 
A) Real GDP fluctuates around potential GDP. 
B) Real GDP is always equal to potential GDP. 
C) Real GDP cannot be greater than potential GDP. 
D) Real GDP cannot be less than potential GDP. 
E) Real GDP cannot be equal to potential GDP.

Question 12

Which of the following is included in U.S. GDP?
i. the rental value of homes owned by U.S. citizens.
ii. the production of Suburban SUVs by GM in its plant in Mexico.
iii. Tickets sold by U2 for concerts held in the United States.

Accepted Answer

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

Question 13

$$\begin{array} { l c } 
 { \text { Item } } & \text { Billions of dollars } \
\hline \text { Consumption expenditure } & 7,500 \
\text { Investment } & 1,300 \
\text { Government expenditure on goods and services } & 1,400 \
\text { Net exports of goods and services } & - 200
\end{array}$$
-Based on the data in the table above, what does GDP equal?

Accepted Answer

A) $10,200 billion 
B) $10,400 billion 
C) $10,000 billion 
D) $9,800 billion 
E) $8,900 billion 
A) $10,200 billion 
B) $10,400 billion 
C) $10,000 billion 
D) $9,800 billion 
E) $8,900 billion

Question 14

Which of the following is true regarding the measurement of GDP?

Accepted Answer

A) Wages and profit income are used in the income approach to GDP. 
B) Wages and consumption are used in the expenditure approach to GDP. 
C) Consumption and investment are used in the income approach to GDP. 
D) Government expenditure is only counted in the income approach to GDP. 
E) Investment and wages are expenditures , and are therefore are used in the expenditure approach to GDP. 
A) Wages and profit income are used in the income approach to GDP. 
B) Wages and consumption are used in the expenditure approach to GDP. 
C) Consumption and investment are used in the income approach to GDP. 
D) Government expenditure is only counted in the income approach to GDP. 
E) Investment and wages are expenditures , and are therefore are used in the expenditure approach to GDP.

Question 15

$$\begin{array} { c c c c c } 
& { \text { Data for 2012 } } & & { \text { Data for } 2013 } \
\hline \text { Item } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Hot dogs } & 4 & \$ 1.50 & 6 & \$ 1.75 \
\text { Pepsi } & 2 & \$ 1.00 & 3 & \$ 1.25 \
\hline
\end{array}$$
-The table gives data on the production and prices in a small economy. Use 2012 as the base period.
a. What does nominal GDP equal in 2012?
b. What does real GDP equal in 2012?
c. What does nominal GDP equal in 2013?
d. Using the chained-price method, what does real GDP equal in 2013?

Accepted Answer

a. Nominal GDP in 2012 equals $8.00. Nom

Question 16

Total expenditure in the United States is equal to consumption expenditure plus investment

Accepted Answer

A) plus government expenditure on goods and services plus imports of goods and services. 
B) minus government expenditure on goods and services minus imports of goods and services. 
C) plus government expenditure on goods and services plus exports of goods and services. 
D) plus government expenditure on goods and services plus exports of goods and services minus imports of goods and services. 
E) plus government expenditure on goods and services plus exports of goods and services plus imports of goods and services. 
A) plus government expenditure on goods and services plus imports of goods and services. 
B) minus government expenditure on goods and services minus imports of goods and services. 
C) plus government expenditure on goods and services plus exports of goods and services. 
D) plus government expenditure on goods and services plus exports of goods and services minus imports of goods and services. 
E) plus government expenditure on goods and services plus exports of goods and services plus imports of goods and services.

Question 17

U.S. net exports include

Accepted Answer

A) sales of Hollywood movies to the rest of the world. 
B) the production of Ford Mustangs in China that are sold in China. 
C) Honda automobiles produced and sold in Japan. 
D) the sale of shares of Nike stock on the New York Stock Exchange. 
E) the sale of U.S. government securities to U.S. citizens. 
A) sales of Hollywood movies to the rest of the world. 
B) the production of Ford Mustangs in China that are sold in China. 
C) Honda automobiles produced and sold in Japan. 
D) the sale of shares of Nike stock on the New York Stock Exchange. 
E) the sale of U.S. government securities to U.S. citizens.

Question 18

Production by Honda, a Japanese firm, in the United States is included in ________ GDP and production by Nike Corporation, a U.S. firm, in Vietnam is included in ________ GDP.

Accepted Answer

A) Japanese; U.S. 
B) U.S.; Vietnamese 
C) U.S.; U.S. 
D) Japanese; Vietnamese 
E) U.S. and Japanese; U.S. and Vietnamese 
A) Japanese; U.S. 
B) U.S.; Vietnamese 
C) U.S.; U.S. 
D) Japanese; Vietnamese 
E) U.S. and Japanese; U.S. and Vietnamese

Question 19

Are sales and purchases of used goods counted as part of GDP?
 Why or why not?

Accepted Answer

Sales and purchases of used goods are no

Question 20

Household production, such as baking bread at home, is not included in GDP because it

Accepted Answer

A) has better quality than the bread in the store. 
B) has lower quality than the bread in the store. 
C) does not add anything of value to GDP. 
D) does not involve a market transaction. 
E) is not really production. 
A) has better quality than the bread in the store. 
B) has lower quality than the bread in the store. 
C) does not add anything of value to GDP. 
D) does not involve a market transaction. 
E) is not really production.

Which of the following describe the United States economy in 2008 and and the start of 2009?

Which of the following is a final good or service?

The sum of all the income categories listed in the National Income and Product Accounts adds up to

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

Which of the following is classified as an intermediate good? i. the purchase of a Big Mac by a college student ii. McDonald's purchase of pickles iii. a McDonald's restaurant owner's interest payment for the loan on her building.

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. Between 2012 and 2013, which grew more rapidly: Nominal GDP or real GDP?

Item Billions of dollars Consumption expenditure 4,000 Interest, rent, and profit 300 Investment 1,000 Deprediation 400 Government expenditure on goods and services 1,000 Net exports of goods and services 200 -The table gives data for a nation. What is the amount of the country's GDP?

The underground economy ________.

Leisure time is ignored when calculating GDP because leisure time

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Which of the following is included in U.S. GDP? i. the rental value of homes owned by U.S. citizens. ii. the production of Suburban SUVs by GM in its plant in Mexico. iii. Tickets sold by U2 for concerts held in the United States.

Item Billions of dollars Consumption expenditure 7,500 Investment 1,300 Government expenditure on goods and services 1,400 Net exports of goods and services -200 -Based on the data in the table above, what does GDP equal?

Which of the following is true regarding the measurement of GDP?

Total expenditure in the United States is equal to consumption expenditure plus investment

U.S. net exports include

Production by Honda, a Japanese firm, in the United States is included in GDP and production by Nike Corporation, a U.S. firm, in Vietnam is included in GDP.

Are sales and purchases of used goods counted as part of GDP? Why or why not?

Household production, such as baking bread at home, is not included in GDP because it

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

Which of the following describe the United States economy in 2008 and and the start of 2009?

Which of the following is a final good or service?

The sum of all the income categories listed in the National Income and Product Accounts adds up to

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

Which of the following is classified as an intermediate good? i. the purchase of a Big Mac by a college student ii. McDonald's purchase of pickles iii. a McDonald's restaurant owner's interest payment for the loan on her building.

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. Between 2012 and 2013, which grew more rapidly: Nominal GDP or real GDP?

Item Billions of dollars Consumption expenditure 4,000 Interest, rent, and profit 300 Investment 1,000 Deprediation 400 Government expenditure on goods and services 1,000 Net exports of goods and services 200 -The table gives data for a nation. What is the amount of the country's GDP?

The underground economy ________.

Leisure time is ignored when calculating GDP because leisure time

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Which of the following is included in U.S. GDP? i. the rental value of homes owned by U.S. citizens. ii. the production of Suburban SUVs by GM in its plant in Mexico. iii. Tickets sold by U2 for concerts held in the United States.

Item Billions of dollars Consumption expenditure 7,500 Investment 1,300 Government expenditure on goods and services 1,400 Net exports of goods and services -200 -Based on the data in the table above, what does GDP equal?

Which of the following is true regarding the measurement of GDP?

Total expenditure in the United States is equal to consumption expenditure plus investment

U.S. net exports include

Production by Honda, a Japanese firm, in the United States is included in ________ GDP and production by Nike Corporation, a U.S. firm, in Vietnam is included in ________ GDP.

Are sales and purchases of used goods counted as part of GDP? Why or why not?

Household production, such as baking bread at home, is not included in GDP because it

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

Production by Honda, a Japanese firm, in the United States is included in GDP and production by Nike Corporation, a U.S. firm, in Vietnam is included in GDP.