Question 1

Net investment is

Accepted Answer

A)  what is left over from total new private investment after depreciation. 
B)  the total amount of private investment purchases, whether new or previously existing. 
C)  the total amount of new private investment purchases. 
D)  gross investment plus depreciation. 
A)  what is left over from total new private investment after depreciation. 
B)  the total amount of private investment purchases, whether new or previously existing. 
C)  the total amount of new private investment purchases. 
D)  gross investment plus depreciation.

Question 2

In the expanded circular flow diagram, the rest of the world interacts directly with

Accepted Answer

A)  households. 
B)  firms. 
C)  product markets. 
D)  factor markets. 
A)  households. 
B)  firms. 
C)  product markets. 
D)  factor markets.

Question 3

A trade surplus occurs when

Accepted Answer

A)  a country purchases more from abroad than other countries purchase from it. 
B)  a country sells more abroad than it purchases from abroad. 
C)  a country's firms open more stores abroad than foreign firms open in the country. 
D)  foreign firms open more stores in a country than the country opens in foreign countries. 
A)  a country purchases more from abroad than other countries purchase from it. 
B)  a country sells more abroad than it purchases from abroad. 
C)  a country's firms open more stores abroad than foreign firms open in the country. 
D)  foreign firms open more stores in a country than the country opens in foreign countries.

Question 4

If an economy produced 60 pounds of sushi at $12 per pound and 15 gallons of sake at $30 per gallon, the total value of these goods and services would be

Accepted Answer

A)  $450. 
B)  $720. 
C)  $1,170. 
D)  $2,700. 
A)  $450. 
B)  $720. 
C)  $1,170. 
D)  $2,700.

Question 5

As depicted in the circular flow diagram, firms

Accepted Answer

A)  demand the goods and services that households supply in product markets. 
B)  supply the goods and services that households demand in product markets. 
C)  demand the resources that households supply in product markets. 
D)  supply the resources that households demand in factor markets. 
A)  demand the goods and services that households supply in product markets. 
B)  supply the goods and services that households demand in product markets. 
C)  demand the resources that households supply in product markets. 
D)  supply the resources that households demand in factor markets.

Question 6

Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 100 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $5 and $11, respectively. In 2016, the economy produced 120 flashlights and 60 fishing lures, and the prices of flashlights and fishing lures were $7 and $14, respectively. respectively. What happened to nominal GDP from 2015 to 2016? What happened to real GDP?

Accepted Answer

Nominal GDP in 2015 was (100 × 5) + (50

Question 7

List and describe the four components of GDP.

Accepted Answer

Consumption expenditures are purchases b

Question 8

When gross domestic product (GDP) is adjusted by adding any income earned abroad by U.S. firms or residents which is sent back to the United States and by subtracting any income earned in the United States by non-U.S. corporations or foreign nationals which is sent back to their home countries, it is called

Accepted Answer

A)  depreciation. 
B)  subsidized income. 
C)  international GDP. 
D)  gross national product (GNP). 
A)  depreciation. 
B)  subsidized income. 
C)  international GDP. 
D)  gross national product (GNP).

Question 9

If in the third quarter of 2016 total investment spending was $4,768 billion and depreciation was $3,292 billion, then net investment was equal to

Accepted Answer

A)  $1,476 billion. 
B)  $3,292 billion. 
C)  $4,768 billion. 
D)  $8,060 billion. 
A)  $1,476 billion. 
B)  $3,292 billion. 
C)  $4,768 billion. 
D)  $8,060 billion.

Question 10

Nominal GDP is measured by calculating real GDP at constant prices.

Accepted Answer

A) True 
 B)False

Question 11

Compensation of employees is the largest component of national income.

Accepted Answer

A) True 
 B)False

Question 12

GDP calculations tend to exclude all of the following EXCEPT

Accepted Answer

A)  illegal transactions. 
B)  environmental quality. 
C)  work that people do for themselves in their own homes. 
D)  salaries paid to government employees. 
A)  illegal transactions. 
B)  environmental quality. 
C)  work that people do for themselves in their own homes. 
D)  salaries paid to government employees.

Question 13

Gross investment is

Accepted Answer

A)  what is left over from total new private investment after depreciation. 
B)  the total amount of private investment purchases, whether new or previously existing. 
C)  the total amount of new private investment purchases. 
D)  the wear and tear on private investment. 
A)  what is left over from total new private investment after depreciation. 
B)  the total amount of private investment purchases, whether new or previously existing. 
C)  the total amount of new private investment purchases. 
D)  the wear and tear on private investment.

Question 14

If GDP included the value of leisure time, the value of U.S. GDP would most likely increase.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following should be included in U.S. GDP?

Accepted Answer

A)  a 3D television manufactured in Thailand and sold in the United States 
B)  a 3D television manufactured in Thailand by a U.S. firm and sold in the United States 
C)  a 3D television manufactured in the United States and sold in Thailand 
D)  a used 3D television manufactured in the United States and sold in Thailand 
A)  a 3D television manufactured in Thailand and sold in the United States 
B)  a 3D television manufactured in Thailand by a U.S. firm and sold in the United States 
C)  a 3D television manufactured in the United States and sold in Thailand 
D)  a used 3D television manufactured in the United States and sold in Thailand

Question 16

Personal disposable income is pre-tax income that flows directly to households.

Accepted Answer

A) True 
 B)False

Question 17

In the determination of production of goods or services with respect to GDP, transfer payments are included.

Accepted Answer

A) True 
 B)False

Question 18

Gross domestic product calculations count only final goods and services because

Accepted Answer

A)  these are the only goods and services that are purchased in an economy. 
B)  counting all goods and services would lead to double-counting of many activities. 
C)  it is difficult to measure the prices of intermediate goods produced. 
D)  one cannot calculate the quantities of intermediate goods produced. 
A)  these are the only goods and services that are purchased in an economy. 
B)  counting all goods and services would lead to double-counting of many activities. 
C)  it is difficult to measure the prices of intermediate goods produced. 
D)  one cannot calculate the quantities of intermediate goods produced.

Question 19

When real GDP falls for two consecutive quarters the economy is in a

Accepted Answer

A)  depression. 
B)  recession. 
C)  peak. 
D)  trough. 
A)  depression. 
B)  recession. 
C)  peak. 
D)  trough.

Question 20

Use the following information to answer the next several questions:
Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively.
-Based on the information in Scenario 1, real GDP in 2016 (in 2015 dollars) in this economy was

Accepted Answer

A)  $830. 
B)  $1,025. 
C)  $1,090. 
D)  $1,345. 
A)  $830. 
B)  $1,025. 
C)  $1,090. 
D)  $1,345.

Net investment is

In the expanded circular flow diagram, the rest of the world interacts directly with

A trade surplus occurs when

If an economy produced 60 pounds of sushi at $12 per pound and 15 gallons of sake at $30 per gallon, the total value of these goods and services would be

As depicted in the circular flow diagram, firms

List and describe the four components of GDP.

If in the third quarter of 2016 total investment spending was $4,768 billion and depreciation was $3,292 billion, then net investment was equal to

Nominal GDP is measured by calculating real GDP at constant prices.

Compensation of employees is the largest component of national income.

GDP calculations tend to exclude all of the following EXCEPT

Gross investment is

If GDP included the value of leisure time, the value of U.S. GDP would most likely increase.

Which of the following should be included in U.S. GDP?

Personal disposable income is pre-tax income that flows directly to households.

In the determination of production of goods or services with respect to GDP, transfer payments are included.

Gross domestic product calculations count only final goods and services because

When real GDP falls for two consecutive quarters the economy is in a

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters

Exam 11: Measuring a Nations Production and Income

Net investment is

In the expanded circular flow diagram, the rest of the world interacts directly with

A trade surplus occurs when

If an economy produced 60 pounds of sushi at $12 per pound and 15 gallons of sake at $30 per gallon, the total value of these goods and services would be

As depicted in the circular flow diagram, firms

List and describe the four components of GDP.

If in the third quarter of 2016 total investment spending was $4,768 billion and depreciation was $3,292 billion, then net investment was equal to

Nominal GDP is measured by calculating real GDP at constant prices.

Compensation of employees is the largest component of national income.

GDP calculations tend to exclude all of the following EXCEPT

Gross investment is

If GDP included the value of leisure time, the value of U.S. GDP would most likely increase.

Which of the following should be included in U.S. GDP?

Personal disposable income is pre-tax income that flows directly to households.

In the determination of production of goods or services with respect to GDP, transfer payments are included.

Gross domestic product calculations count only final goods and services because

When real GDP falls for two consecutive quarters the economy is in a

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters