Question 1

If the size of the underground economy is large

Accepted Answer

A)  government agencies have difficulty measuring nominal and real GDP. 
B)  it is relatively easy to gather productivity data on many businesses. 
C)  measuring nominal GDP is relatively easy, but measuring real GDP is difficult. 
D)  measuring real GDP is relatively easy, but measuring nominal GDP is difficult. 
A)  government agencies have difficulty measuring nominal and real GDP. 
B)  it is relatively easy to gather productivity data on many businesses. 
C)  measuring nominal GDP is relatively easy, but measuring real GDP is difficult. 
D)  measuring real GDP is relatively easy, but measuring nominal GDP is difficult.

Question 2

The measure of production that values production using current prices is called

Accepted Answer

A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground GDP. 
A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground GDP.

Question 3

Legalizing all forms of illegal activities

Accepted Answer

A)  reduces GDP and reduces the size of the underground economy. 
B)  reduces GDP and increases the size of the underground economy. 
C)  increases GDP and reduces the size of the underground economy. 
D)  increases GDP and increases the size of the underground economy. 
A)  reduces GDP and reduces the size of the underground economy. 
B)  reduces GDP and increases the size of the underground economy. 
C)  increases GDP and reduces the size of the underground economy. 
D)  increases GDP and increases the size of the underground economy.

Question 4

Total income in an economy is equal to

Accepted Answer

A)  GDP minus net exports. 
B)  income minus taxes. 
C)  the sum of wages, interest, rent, and profit. 
D)  firm revenues. 
A)  GDP minus net exports. 
B)  income minus taxes. 
C)  the sum of wages, interest, rent, and profit. 
D)  firm revenues.

Question 5

Table 12-29
 $\begin{array}{|l|c|}
\hline & \begin{array}{c}
\text { Billions of } \
\text { Dollars }
\end{array} \
\hline \text { GDP } & \$ 3,250 \
\hline \text { Depreciation } & 300 \
\hline \text { Retained earnings } & 1,000 \
\hline \text { Personal tax payments } & 500 \
\hline \text { Transfer payments } & 80 \
\hline
\end{array}$
-Refer to Table 12-29.Based on the table above,what is personal income for this economy?

Accepted Answer

A)  $1,950 billion 
B)  $2,030 billion 
C)  $2,450 billion 
D)  $5,130 billion 
A)  $1,950 billion 
B)  $2,030 billion 
C)  $2,450 billion 
D)  $5,130 billion

Question 6

An increase in national income could by caused by which of the following?

Accepted Answer

A)  an increase in depreciation 
B)  an increase in personal taxes 
C)  a decrease in personal income 
D)  an increase in gross domestic product 
A)  an increase in depreciation 
B)  an increase in personal taxes 
C)  a decrease in personal income 
D)  an increase in gross domestic product

Question 7

In 2016,which component of GDP had a negative value?

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  net exports 
A)  consumption 
B)  investment 
C)  government purchases 
D)  net exports

Question 8

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Accepted Answer

A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices. 
A)  chained-weighted prices. 
B)  fixed-weight prices. 
C)  current-year prices. 
D)  fixed base-year prices.

Question 9

Which of the following would result in GDP for an economy equal to $10 trillion?

Accepted Answer

A)  C = $6 trillion I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion 
B)  C = $7 trillion I = $2 trillion
G = $4 trillion
NX = $3 trillion 
C)  C = $5 trillion I = $5 trillion
G = $2 trillion
NX = -$2 trillion 
D)  C = $4 trillion I = $3 trillion
G = $2 trillion
NX = -$1 trillion 
A)  C = $6 trillion I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion 
B)  C = $7 trillion I = $2 trillion
G = $4 trillion
NX = $3 trillion 
C)  C = $5 trillion I = $5 trillion
G = $2 trillion
NX = -$2 trillion 
D)  C = $4 trillion I = $3 trillion
G = $2 trillion
NX = -$1 trillion

Question 10

Emily is a writer,and uses her tablet computer to write a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

Accepted Answer

A)  $25 million 
B)  $20 million 
C)  $500,000 
D)  $50,000 
A)  $25 million 
B)  $20 million 
C)  $500,000 
D)  $50,000

Question 11

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Accepted Answer

A)  equals 
B)  is greater than 
C)  is less than 
D)  is sometimes greater than and other times less than 
A)  equals 
B)  is greater than 
C)  is less than 
D)  is sometimes greater than and other times less than

Question 12

In a small economy,consumption spending is $6,000,government purchases are $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Accepted Answer

A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700 
A)  $9,700 
B)  $9,800 
C)  $10,800 
D)  $11,700

Question 13

Which of the following goods is directly counted in GDP?

Accepted Answer

A)  the lettuce that Subway purchases for its sandwiches 
B)  the bread that Subway purchases for its sandwiches 
C)  a 12-inch Subway sandwich purchased by a student 
D)  the plastic bags that Subway purchases to wrap its sandwiches 
A)  the lettuce that Subway purchases for its sandwiches 
B)  the bread that Subway purchases for its sandwiches 
C)  a 12-inch Subway sandwich purchased by a student 
D)  the plastic bags that Subway purchases to wrap its sandwiches

Question 14

"Household production" refers to

Accepted Answer

A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves. 
A)  the manufacturing of durable household products. 
B)  the home building sector of the economy. 
C)  home-based craft businesses. 
D)  goods and services people produce for themselves.

Question 15

U.S.gross national product is defined as

Accepted Answer

A)  the value of final goods and services produced within the United States. 
B)  the value of final goods and services produced outside of the United States. 
C)  the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States. 
D)  the value of final goods and services produced within the United States, by United States residents. 
A)  the value of final goods and services produced within the United States. 
B)  the value of final goods and services produced outside of the United States. 
C)  the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States. 
D)  the value of final goods and services produced within the United States, by United States residents.

Question 16

The values of real GDP and real GNP are almost the same for the United States.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is considered a durable good?

Accepted Answer

A)  medical care 
B)  clothing 
C)  food 
D)  a washing machine 
A)  medical care 
B)  clothing 
C)  food 
D)  a washing machine

Question 18

Table 12-17
 $\begin{array}{|c|c|c|c|c|}
\hline & 2013 & & 2018 & \
\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Movies } & 20 & \$ 6.00 & 30 & \$ 7.00 \
\hline \text { Burgers } & 100 & 2.00 & 90 & 2.50 \
\hline \text { Bikes } & 3 & 1,000.00 & 6 & 1,100.00 \
\hline
\end{array}$ A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 12-17.What is real GDP in 2018,using 2013 as the base year?

Accepted Answer

A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035 
A)  $3,320 
B)  $3,690 
C)  $6,360 
D)  $7,035

Question 19

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

Accepted Answer

Disagree.It depends on whether the year

Question 20

The factors of production include

Accepted Answer

A)  wages. 
B)  capital. 
C)  investment. 
D)  transfers. 
A)  wages. 
B)  capital. 
C)  investment. 
D)  transfers.

If the size of the underground economy is large

The measure of production that values production using current prices is called

Legalizing all forms of illegal activities

Total income in an economy is equal to

Table 12-29 Billions of Dollars GDP \ 3,250 Depreciation 300 Retained earnings 1,000 Personal tax payments 500 Transfer payments 80 -Refer to Table 12-29.Based on the table above,what is personal income for this economy?

An increase in national income could by caused by which of the following?

In 2016,which component of GDP had a negative value?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Which of the following would result in GDP for an economy equal to $10 trillion?

Emily is a writer,and uses her tablet computer to write a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

In a small economy,consumption spending is $6,000,government purchases are $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Which of the following goods is directly counted in GDP?

"Household production" refers to

U.S.gross national product is defined as

The values of real GDP and real GNP are almost the same for the United States.

Which of the following is considered a durable good?

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

The factors of production include

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

If the size of the underground economy is large

The measure of production that values production using current prices is called

Legalizing all forms of illegal activities

Total income in an economy is equal to

Table 12-29 Billions of Dollars GDP \ 3,250 Depreciation 300 Retained earnings 1,000 Personal tax payments 500 Transfer payments 80 -Refer to Table 12-29.Based on the table above,what is personal income for this economy?

An increase in national income could by caused by which of the following?

In 2016,which component of GDP had a negative value?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Which of the following would result in GDP for an economy equal to $10 trillion?

Emily is a writer,and uses her tablet computer to write a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each,what is the contribution to GDP of Emily's novel?

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

In a small economy,consumption spending is $6,000,government purchases are $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Which of the following goods is directly counted in GDP?

"Household production" refers to

U.S.gross national product is defined as

The values of real GDP and real GNP are almost the same for the United States.

Which of the following is considered a durable good?

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

The factors of production include

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