Question 1

Disposable personal income is equal to personal income minus personal tax payments.

Accepted Answer

A) True 
 B)False

Question 2

Table 12-6
 $\begin{array}{|l|r|c|}
\hline {\text { Product }} & \text { Quantity }& \text { Price per Unit } \
\hline \text { Coke } & 10,000 &\$2\
\hline \text { iPhones } & 2,000&150 \
\hline \text { Backpack.s } & 4,000 &25\
\hline \text { Hershey bars } & 8,000&1\
\hline
\end{array}$
-Refer to Table 12-6.Consider the table of production and price statistics for a small economy in 2018.If the economy only produces the four goods listed below,what is GDP for 2018?

Accepted Answer

A)  $428,000 
B)  $267,000 
C)  $24,000 
D)  $1,424 
A)  $428,000 
B)  $267,000 
C)  $24,000 
D)  $1,424

Question 3

Investment,as defined by economists,would include the purchase of a

Accepted Answer

A)  corporate bond. 
B)  government bond. 
C)  share of stock in ExxonMobil. 
D)  computer by an accounting firm. 
A)  corporate bond. 
B)  government bond. 
C)  share of stock in ExxonMobil. 
D)  computer by an accounting firm.

Question 4

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

Accepted Answer

A)  $185 billion. 
B)  $215 billion. 
C)  $220 billion. 
D)  $245 billion. 
A)  $185 billion. 
B)  $215 billion. 
C)  $220 billion. 
D)  $245 billion.

Question 5

National income equals gross national product minus

Accepted Answer

A)  imports. 
B)  depreciation. 
C)  inventories. 
D)  changes in inventories. 
A)  imports. 
B)  depreciation. 
C)  inventories. 
D)  changes in inventories.

Question 6

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 real GDP in 2018,using 2018 as the base year?

Accepted Answer

A)  $28,885 
B)  $11,790 
C)  $11,200 
D)  $10,275 
A)  $28,885 
B)  $11,790 
C)  $11,200 
D)  $10,275

Question 7

Table 12-25
 $\begin{array}{|l|l|l|}
\hline & \mathbf{2 0 1 7} & {\mathbf{2 0 1 8}} \
\hline \text { Nominal GDP } & \$ 10,000 & \$ 15,000 \
\hline \text { Real GDP } & 10,000 & 14,000 \
\hline
\end{array}$
-Refer to Table 12-25.Given the information above,calculate the GDP deflator for both 2017 and 2018.What does the value of the deflator in the year 2017 tell you about that year with respect to the base year? What happened to prices in 2018 as compared to 2017?

Accepted Answer

To calculate the GDP deflator for 2017 a

Question 8

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

Accepted Answer

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

Question 9

If prices in the economy rise,then

Accepted Answer

A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined. 
A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined.

Question 10

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Accepted Answer

A)  greater than their values without these measurements. 
B)  less than their values without these measurements. 
C)  unchanged from their values without these measurements. 
D)  meaningless, since GDP values without these measurements would no longer be of value. 
A)  greater than their values without these measurements. 
B)  less than their values without these measurements. 
C)  unchanged from their values without these measurements. 
D)  meaningless, since GDP values without these measurements would no longer be of value.

Question 11

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

Accepted Answer

A)  2018 
B)  2019 
C)  Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D)  The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP. 
A)  2018 
B)  2019 
C)  Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D)  The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP.

Question 12

The drawback to calculating real GDP using base-year prices is that

Accepted Answer

A)  real GDP in one year is not comparable to real GDP in another year. 
B)  relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C)  relative prices change over time and these changes are reflected in base-year prices. 
D)  quality changes are reflected in base-year prices. 
A)  real GDP in one year is not comparable to real GDP in another year. 
B)  relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. 
C)  relative prices change over time and these changes are reflected in base-year prices. 
D)  quality changes are reflected in base-year prices.

Question 13

Real 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 rises or the quantity of final 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 rises or the quantity of final goods and services produced rises.

Question 14

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

Accepted Answer

A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0. 
A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0.

Question 15

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Accepted Answer

A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy 
A)  households; sell 
B)  households; buy 
C)  firms; sell 
D)  firms; buy

Question 16

Table 12-19
 $\begin{array}{|l|c|r|}
\hline & \mathbf{2 0 1 7} & {\mathbf{2 0 1 8}} \
\hline \text { Nominal GDP } & \$ 10,000 & \$ 12,000 \
\hline \text { Real GDP } & 9,500 & 10,500 \
\hline
\end{array}$
-Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2018.

Accepted Answer

A)  114 
B)  105 
C)  95 
D)  87 
A)  114 
B)  105 
C)  95 
D)  87

Question 17

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Accepted Answer

The largest category of expenditures is

Question 18

National income is defined as

Accepted Answer

A)  gross national product plus transfer payments. 
B)  gross national product less retained earnings plus transfer payments. 
C)  gross domestic product less retained earnings plus transfer payments. 
D)  gross domestic product less the consumption of fixed capital. 
A)  gross national product plus transfer payments. 
B)  gross national product less retained earnings plus transfer payments. 
C)  gross domestic product less retained earnings plus transfer payments. 
D)  gross domestic product less the consumption of fixed capital.

Question 19

The "underground economy" is also referred to as

Accepted Answer

A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy. 
A)  the informal sector. 
B)  the formal sector. 
C)  the halfway economy. 
D)  the net domestic product economy.

Question 20

To calculate GDP by the expenditure method,one must add

Accepted Answer

A)  wages, rents, interest, and profits. 
B)  consumption spending, investment spending, government purchases, and net exports. 
C)  consumption spending, investment spending, government purchases, and exports. 
D)  labor, natural resources, entrepreneurship, and capital. 
A)  wages, rents, interest, and profits. 
B)  consumption spending, investment spending, government purchases, and net exports. 
C)  consumption spending, investment spending, government purchases, and exports. 
D)  labor, natural resources, entrepreneurship, and capital.

Disposable personal income is equal to personal income minus personal tax payments.

Table 12-6 Product Quantity Price per Unit Coke 10,000 \2 iPhones 2,000 150 Backpack.s 4,000 25 Hershey bars 8,000 1 -Refer to Table 12-6.Consider the table of production and price statistics for a small economy in 2018.If the economy only produces the four goods listed below,what is GDP for 2018?

Investment,as defined by economists,would include the purchase of a

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

National income equals gross national product minus

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

If prices in the economy rise,then

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

The drawback to calculating real GDP using base-year prices is that

Real GDP will increase

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

In the circular flow diagram, supply the factors of production,and goods and services.

Table 12-19 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2018.

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

National income is defined as

The "underground economy" is also referred to as

To calculate GDP by the expenditure method,one must add

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

Disposable personal income is equal to personal income minus personal tax payments.

Table 12-6 Product Quantity Price per Unit Coke 10,000 \2 iPhones 2,000 150 Backpack.s 4,000 25 Hershey bars 8,000 1 -Refer to Table 12-6.Consider the table of production and price statistics for a small economy in 2018.If the economy only produces the four goods listed below,what is GDP for 2018?

Investment,as defined by economists,would include the purchase of a

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

National income equals gross national product minus

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

If prices in the economy rise,then

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

The drawback to calculating real GDP using base-year prices is that

Real GDP will increase

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Table 12-19 Nominal GDP \ 10,000 \ 12,000 Real GDP 9,500 10,500 -Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2018.

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

National income is defined as

The "underground economy" is also referred to as

To calculate GDP by the expenditure method,one must add

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

In the circular flow diagram, supply the factors of production,and goods and services.