Question 1

Gross Domestic Product is defined to be the market value of all the final goods and services produced during a given time period

Accepted Answer

A) within a country. 
B) within and outside a country by that country's citizens. 
C) by citizens of the country, regardless of their place of residence. 
D) by only legal residents of the country. 
E) within a county minus the market value of all the final goods and services produced by that country's citizens outside the country. 
A) within a country. 
B) within and outside a country by that country's citizens. 
C) by citizens of the country, regardless of their place of residence. 
D) by only legal residents of the country. 
E) within a county minus the market value of all the final goods and services produced by that country's citizens outside the country.

Question 2

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

Accepted Answer

The basic point is that nothing escapes

Question 3

Consumption expenditure includes spending

Accepted Answer

A) on intermediate goods and services by firms. 
B) on office supplies by firms. 
C) by households. 
D) by households and spending on office supplies by firms. 
E) by governments when they are buying goods and services that consumers also buy. 
A) on intermediate goods and services by firms. 
B) on office supplies by firms. 
C) by households. 
D) by households and spending on office supplies by firms. 
E) by governments when they are buying goods and services that consumers also buy.

Question 4

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 5

If you buy a five-year-old TV from a friend, the amount you paid for the TV is

Accepted Answer

A) always added to consumption expenditures but not investment. 
B) always added to investment but not consumption. 
C) not included in this year's GDP. 
D) added to investment if the TV is expected to last more than 5 additional years and added to consumption if the TV is expected to last less than 5 additional years. 
E) included in this year's GDP only if the TV set was manufactured in the United States. 
A) always added to consumption expenditures but not investment. 
B) always added to investment but not consumption. 
C) not included in this year's GDP. 
D) added to investment if the TV is expected to last more than 5 additional years and added to consumption if the TV is expected to last less than 5 additional years. 
E) included in this year's GDP only if the TV set was manufactured in the United States.

Question 6

To calculate GDP it is necessary to add up the market value of all the ________ produced within a country during a year.

Accepted Answer

A) goods but not services produced 
B) goods and services produced 
C) intermediate goods and services produced 
D) final goods and services produced 
E) intermediate goods and services produced and all the final goods and services produced 
A) goods but not services produced 
B) goods and services produced 
C) intermediate goods and services produced 
D) final goods and services produced 
E) intermediate goods and services produced and all the final goods and services produced

Question 7

Which of the following is classified as a final good or service?
I. tires bought by GM to put on new Tahoes
Ii. mustard bought by Subway to put on its sub sandwiches
Iii. your purchase of online access to the Wall Street Journal

Accepted Answer

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

Question 8

The sum of the components of incomes is called ________.

Accepted Answer

A) net domestic product at market prices 
B) gross domestic product at market prices 
C) gross domestic product at factor cost 
D) net domestic product at factor cost 
E) GNP 
A) net domestic product at market prices 
B) gross domestic product at market prices 
C) gross domestic product at factor cost 
D) net domestic product at factor cost 
E) GNP

Question 9

The abbreviation "GDP" stands for

Accepted Answer

A) Gross Domestic Product. 
B) Gross Domestic Prices. 
C) General Domestic Prices. 
D) Great Domestic Prices. 
E) Government's Domestic Politics. 
A) Gross Domestic Product. 
B) Gross Domestic Prices. 
C) General Domestic Prices. 
D) Great Domestic Prices. 
E) Government's Domestic Politics.

Question 10

In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person

Accepted Answer

A) increased from $11,500 to $12,550. 
B) increased by over 300 percent. 
C) increased by about 118 percent. 
D) decreased from $125,500 to $28,750. 
E) decreased by 9 percent. 
A) increased from $11,500 to $12,550. 
B) increased by over 300 percent. 
C) increased by about 118 percent. 
D) decreased from $125,500 to $28,750. 
E) decreased by 9 percent.

Question 11

If nominal GDP increases from one year to the next, then

Accepted Answer

A) production must have increased. 
B) production could have increased, decreased, or stayed the same. 
C) prices must have increased. 
D) prices and production must both have increased. 
E) prices and production must both have decreased. 
A) production must have increased. 
B) production could have increased, decreased, or stayed the same. 
C) prices must have increased. 
D) prices and production must both have increased. 
E) prices and production must both have decreased.

Question 12

Although imperfect, which of the following is used as a measure of the standard of living?

Accepted Answer

A) real GDP ÷ population 
B) real GDP × population 
C) nominal GDP × population 
D) nominal GNP ÷ population 
E) nominal GNP × population 
A) real GDP ÷ population 
B) real GDP × population 
C) nominal GDP × population 
D) nominal GNP ÷ population 
E) nominal GNP × population

Question 13

If both the production of goods and services increase and prices rise, then the change in nominal GDP

Accepted Answer

A) definitely understates the change in production. 
B) definitely accurately reflect the change in production. 
C) definitely overstates the change in production. 
D) either understates or might accurately reflect the change in production. 
E) More information is needed to determine how the change in nominal GDP compares to the change in production. 
A) definitely understates the change in production. 
B) definitely accurately reflect the change in production. 
C) definitely overstates the change in production. 
D) either understates or might accurately reflect the change in production. 
E) More information is needed to determine how the change in nominal GDP compares to the change in production.

Question 14

Data for 2009 Data for 2010
 Item
Bread
Soda 
 $$\begin{array} { c c c c } 
\text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline 50 & \$ 4.00 & 70 & \$ 3.00 \
50 & \$ 5.00 & 50 & \$ 6.00 \
\hline
\end{array}$$
-The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is nominal GDP in 2009?

Accepted Answer

A) $410 
B) $450 
C) $900 
D) $550 
E) $460 
A) $410 
B) $450 
C) $900 
D) $550 
E) $460

Question 15

Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using ________, Wobet has GDP equal to ________.

Accepted Answer

A) market value; 30 units 
B) a market basket; 30 units 
C) market value; $120 
D) real value; $120 
E) a price index; $120 
A) market value; 30 units 
B) a market basket; 30 units 
C) market value; $120 
D) real value; $120 
E) a price index; $120

Question 16

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. Real GDP in 2012 is equal to

Accepted Answer

A) $800. 
B) $640. 
C) $625. 
D) $500. 
E) $200. 
A) $800. 
B) $640. 
C) $625. 
D) $500. 
E) $200.

Question 17

In 2009 in the United States, net domestic product at factor cost was $11,091 billion. Additionally, rent was $2,000 billion, profits were $1,000 billion, and interest was $358 billion. Hence wages were

Accepted Answer

A) $7,733 billion. 
B) $9,091 billion. 
C) $10,091 billion. 
D) $8,091 billion. 
E) $12,091 billion. 
A) $7,733 billion. 
B) $9,091 billion. 
C) $10,091 billion. 
D) $8,091 billion. 
E) $12,091 billion.

Question 18

When total output, income, employment, and trade decline for 6 to 12 months, the economy is in what part of the business cycle?

Accepted Answer

When these real vari

Question 19

Goods and services such as environmental quality, leisure time, and household production are not included in GDP because they are not

Accepted Answer

A) productive activities. 
B) for consumption. 
C) bought in markets. 
D) made for profit. 
E) really durable goods. 
A) productive activities. 
B) for consumption. 
C) bought in markets. 
D) made for profit. 
E) really durable goods.

Question 20

Which of the following goods and services are omitted from GDP?

Accepted Answer

A) household production 
B) capital goods 
C) expenditure on resources used to protect the environment 
D) government weather satellites 
E) services such as hair stylings 
A) household production 
B) capital goods 
C) expenditure on resources used to protect the environment 
D) government weather satellites 
E) services such as hair stylings

Gross Domestic Product is defined to be the market value of all the final goods and services produced during a given time period

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

Consumption expenditure includes spending

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?

If you buy a five-year-old TV from a friend, the amount you paid for the TV is

To calculate GDP it is necessary to add up the market value of all the ________ produced within a country during a year.

Which of the following is classified as a final good or service? I. tires bought by GM to put on new Tahoes Ii. mustard bought by Subway to put on its sub sandwiches Iii. your purchase of online access to the Wall Street Journal

The sum of the components of incomes is called ________.

The abbreviation "GDP" stands for

In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person

If nominal GDP increases from one year to the next, then

Although imperfect, which of the following is used as a measure of the standard of living?

If both the production of goods and services increase and prices rise, then the change in nominal GDP

Data for 2009 Data for 2010 Item Bread Soda Quantity Price Quantity Price 50 \ 4.00 70 \ 3.00 50 \ 5.00 50 \ 6.00 -The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is nominal GDP in 2009?

Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using , Wobet has GDP equal to .

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. Real GDP in 2012 is equal to

In 2009 in the United States, net domestic product at factor cost was $11,091 billion. Additionally, rent was $2,000 billion, profits were $1,000 billion, and interest was $358 billion. Hence wages were

When total output, income, employment, and trade decline for 6 to 12 months, the economy is in what part of the business cycle?

Goods and services such as environmental quality, leisure time, and household production are not included in GDP because they are not

Which of the following goods and services are omitted from GDP?

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

Gross Domestic Product is defined to be the market value of all the final goods and services produced during a given time period

Use the idea of the circular flow diagram to explain why the value of production equals total income equals total expenditure.

Consumption expenditure includes spending

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?

If you buy a five-year-old TV from a friend, the amount you paid for the TV is

To calculate GDP it is necessary to add up the market value of all the ________ produced within a country during a year.

Which of the following is classified as a final good or service? I. tires bought by GM to put on new Tahoes Ii. mustard bought by Subway to put on its sub sandwiches Iii. your purchase of online access to the Wall Street Journal

The sum of the components of incomes is called ________.

The abbreviation "GDP" stands for

In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person

If nominal GDP increases from one year to the next, then

Although imperfect, which of the following is used as a measure of the standard of living?

If both the production of goods and services increase and prices rise, then the change in nominal GDP

Data for 2009 Data for 2010 Item Bread Soda Quantity Price Quantity Price 50 \ 4.00 70 \ 3.00 50 \ 5.00 50 \ 6.00 -The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is nominal GDP in 2009?

Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using ________, Wobet has GDP equal to ________.

-Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. Real GDP in 2012 is equal to

In 2009 in the United States, net domestic product at factor cost was $11,091 billion. Additionally, rent was $2,000 billion, profits were $1,000 billion, and interest was $358 billion. Hence wages were

When total output, income, employment, and trade decline for 6 to 12 months, the economy is in what part of the business cycle?

Goods and services such as environmental quality, leisure time, and household production are not included in GDP because they are not

Which of the following goods and services are omitted from GDP?

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

Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using , Wobet has GDP equal to .