Question 1

What are the differences between national income,personal income,and disposable personal income?

Accepted Answer

National income is gross domestic produc

Question 2

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Accepted Answer

A)  GDP will decrease. 
B)  GDP will increase. 
C)  GDP will not change. 
D)  GDP may increase or may decrease depending on inflation. 
A)  GDP will decrease. 
B)  GDP will increase. 
C)  GDP will not change. 
D)  GDP may increase or may decrease depending on inflation.

Question 3

Japan experienced periods of deflation-a declining price level-during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

Accepted Answer

Real GDP would be higher,as long as the

Question 4

Nominal GDP will increase

Accepted Answer

A)  only if the price level rises. 
B)  only if the price level falls. 
C)  only if the quantity of final goods and services produced rises. 
D)  if either the price level or the quantity of goods and services produced rises. 
A)  only if the price level rises. 
B)  only if the price level falls. 
C)  only if the quantity of final goods and services produced rises. 
D)  if either the price level or the quantity of goods and services produced rises.

Question 5

In 2018,Kendall Ford,an automobile dealership,spent $20,000 on a new car lift for its repair shop,$2,000 on a new copy machine for its sales division,and $600,000 on Ford Motor company stock.Unsold cars and trucks were valued at $400,000 on January 1,2018 and unsold cars and trucks were valued at $900,000 on December 31,2018.What is Kendall Ford's total investment spending in 2018?

Accepted Answer

A)  $22,000 
B)  $322,000 
C)  $522,000 
D)  $1,022,000 
A)  $22,000 
B)  $322,000 
C)  $522,000 
D)  $1,022,000

Question 6

Which of the following is not a durable good?

Accepted Answer

A)  furniture 
B)  automobile 
C)  clothing 
D)  refrigerator 
A)  furniture 
B)  automobile 
C)  clothing 
D)  refrigerator

Question 7

If real GDP in 2018 (using 2009 prices)is lower than nominal GDP of 2017,then

Accepted Answer

A)  prices in 2018 are lower than prices in 2017. 
B)  nominal GDP in 2018 equals nominal GDP in 2017. 
C)  prices in 2018 are higher than prices in 2017. 
D)  real GDP in 2018 is larger than real GDP in 2017. 
A)  prices in 2018 are lower than prices in 2017. 
B)  nominal GDP in 2018 equals nominal GDP in 2017. 
C)  prices in 2018 are higher than prices in 2017. 
D)  real GDP in 2018 is larger than real GDP in 2017.

Question 8

The U.S.work week has declined from 60 hours in 1890 to fewer than 40 hours today.The impact of the decline in working hours

Accepted Answer

A)  increases U.S. GDP and increases the well-being of a typical working person in the U.S. 
B)  increases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
C)  decreases U.S. GDP and increases the well-being of a typical working person in the U.S. 
D)  decreases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
A)  increases U.S. GDP and increases the well-being of a typical working person in the U.S. 
B)  increases U.S. GDP and decreases the well-being of a typical working person in the U.S. 
C)  decreases U.S. GDP and increases the well-being of a typical working person in the U.S. 
D)  decreases U.S. GDP and decreases the well-being of a typical working person in the U.S.

Question 9

________ is/are the payment for the factor of production ________.

Accepted Answer

A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital 
A)  Wages; capital 
B)  Interest; labor 
C)  Profit; entrepreneurship 
D)  Rent; capital

Question 10

Refer to the Article Summary.Including spending on healthcare,tourism,and the "new economy" for the first time in its GDP calculations will likely result in Chinese GDP growth rates that are ________ the growth rates that would have been measured without the inclusion of this spending.

Accepted Answer

A)  higher than 
B)  lower than 
C)  equal to 
D)  negative compared to 
A)  higher than 
B)  lower than 
C)  equal to 
D)  negative compared to

Question 11

Table 12-18
 $\begin{array}{|c|c|c|c|c|}
\hline & 2013 & & 2018 & \
\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Camera } & 100 & \$ 10 & 120 & \$ 12 \
\hline \text { Legal services } & 50 & 15 & 45 & 20 \
\hline \text { Books } & 200 & 40 & 210 & 45 \
\hline
\end{array}$ A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 12-18.What is the GDP deflator in 2018 if 2018 is the base year?

Accepted Answer

A)  120 
B)  118 
C)  100 
D)  87 
A)  120 
B)  118 
C)  100 
D)  87

Question 12

Which of the following transactions would be included in the official calculation of GDP?

Accepted Answer

A)  A student buys a used textbook at the bookstore. 
B)  Firestone sells $2 million worth of tires to General Motors. 
C)  You wash and wax your father's car as a favor to him. 
D)  You buy a new iPod. 
E)  You illegally download music off the Internet to put on your new iPod. 
A)  A student buys a used textbook at the bookstore. 
B)  Firestone sells $2 million worth of tires to General Motors. 
C)  You wash and wax your father's car as a favor to him. 
D)  You buy a new iPod. 
E)  You illegally download music off the Internet to put on your new iPod.

Question 13

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Accepted Answer

A)  $75 
B)  $1,425 
C)  $1,500 
D)  $4,425 
A)  $75 
B)  $1,425 
C)  $1,500 
D)  $4,425

Question 14

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Accepted Answer

A)  exports; foreign countries; the United States 
B)  exports; the United States; the United States 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; the United States 
A)  exports; foreign countries; the United States 
B)  exports; the United States; the United States 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; the United States

Question 15

Table 12-28
 $\begin{array}{|l|c|} 
\hline & \begin{array}{c}
\text { Billions of } \
\text { Dollars }
\end{array} \
\hline \text { GDP } & \$ 5,250 \
\hline \text { Transfer Payments } & 50 \
\hline \text { Retained earnings } & 700 \
\hline \text { Depreciation } & 1,250 \
\hline
\end{array}$
-Refer to Table 12-28.Based on the table above,what is national income for this economy?

Accepted Answer

A)  $4,700 billion 
B)  $4,000 billion 
C)  $3,150 billion 
D)  $2,450 billion 
A)  $4,700 billion 
B)  $4,000 billion 
C)  $3,150 billion 
D)  $2,450 billion

Question 16

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

Accepted Answer

A)  reinforces previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
B)  reinforces previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
C)  contradicts previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
D)  contradicts previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
A)  reinforces previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
B)  reinforces previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
C)  contradicts previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
D)  contradicts previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels.

Question 17

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Accepted Answer

A)  270% 
B)  50% 
C)  5% 
D)  2.7% 
A)  270% 
B)  50% 
C)  5% 
D)  2.7%

Question 18

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Accepted Answer

A)  the sale of a used door to a homeowner 
B)  the sale of a new door to homeowner 
C)  the sale of a used door to TapKon construction for installation into a new home 
D)  the sale of a new door to TapKon construction for installation into a new home 
A)  the sale of a used door to a homeowner 
B)  the sale of a new door to homeowner 
C)  the sale of a used door to TapKon construction for installation into a new home 
D)  the sale of a new door to TapKon construction for installation into a new home

Question 19

Which of the following would increase disposable personal income?

Accepted Answer

A)  a decrease in transfer payments received 
B)  a decrease in taxes paid 
C)  a decrease in personal income 
D)  All of the above would increase disposable income. 
A)  a decrease in transfer payments received 
B)  a decrease in taxes paid 
C)  a decrease in personal income 
D)  All of the above would increase disposable income.

Question 20

In an "underground economy," the production of goods and services

Accepted Answer

A)  is not measured or included in GDP. 
B)  is not measured but is included in GDP. 
C)  is measured and included in GDP. 
D)  is usually too insignificant to be included in GDP. 
A)  is not measured or included in GDP. 
B)  is not measured but is included in GDP. 
C)  is measured and included in GDP. 
D)  is usually too insignificant to be included in GDP.

What are the differences between national income,personal income,and disposable personal income?

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Japan experienced periods of deflation-a declining price level-during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

Nominal GDP will increase

Which of the following is not a durable good?

If real GDP in 2018 (using 2009 prices)is lower than nominal GDP of 2017,then

The U.S.work week has declined from 60 hours in 1890 to fewer than 40 hours today.The impact of the decline in working hours

is/are the payment for the factor of production .

Refer to the Article Summary.Including spending on healthcare,tourism,and the "new economy" for the first time in its GDP calculations will likely result in Chinese GDP growth rates that are ________ the growth rates that would have been measured without the inclusion of this spending.

Which of the following transactions would be included in the official calculation of GDP?

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .

Table 12-28 Billions of Dollars GDP \ 5,250 Transfer Payments 50 Retained earnings 700 Depreciation 1,250 -Refer to Table 12-28.Based on the table above,what is national income for this economy?

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Which of the following would increase disposable personal income?

In an "underground economy," the production of goods and services

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 12: GDP: Measuring Total Production and Income

What are the differences between national income,personal income,and disposable personal income?

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Japan experienced periods of deflation-a declining price level-during the 1990s.During a deflationary period,which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.

Nominal GDP will increase

Which of the following is not a durable good?

If real GDP in 2018 (using 2009 prices)is lower than nominal GDP of 2017,then

The U.S.work week has declined from 60 hours in 1890 to fewer than 40 hours today.The impact of the decline in working hours

________ is/are the payment for the factor of production ________.

Refer to the Article Summary.Including spending on healthcare,tourism,and the "new economy" for the first time in its GDP calculations will likely result in Chinese GDP growth rates that are ________ the growth rates that would have been measured without the inclusion of this spending.

Which of the following transactions would be included in the official calculation of GDP?

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Table 12-28 Billions of Dollars GDP \ 5,250 Transfer Payments 50 Retained earnings 700 Depreciation 1,250 -Refer to Table 12-28.Based on the table above,what is national income for this economy?

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Which of the following would increase disposable personal income?

In an "underground economy," the production of goods and services

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

is/are the payment for the factor of production .

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .