Question 1

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following values would be included in U.S. GDP for 2009?

Accepted Answer

A) the rent that Sean, an American citizen, would have paid on his home in New York in 2009 had he not owned that home 
B) the rent that John, an American citizen, paid on his apartment in San Francisco in 2009 
C) the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in Houston and practiced law there in 2009 
D) All of the above would be included in U.S. GDP for 2009. 
A) the rent that Sean, an American citizen, would have paid on his home in New York in 2009 had he not owned that home 
B) the rent that John, an American citizen, paid on his apartment in San Francisco in 2009 
C) the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in Houston and practiced law there in 2009 
D) All of the above would be included in U.S. GDP for 2009.

Question 3

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

Accepted Answer

A) included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B) included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C) included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it. 
D) not included in GDP whether Susan pays Speedy lube to change it or she changes it herself. 
A) included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B) included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C) included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it. 
D) not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Question 4

Spots, Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called

Accepted Answer

A) an inventory good. 
B) a transitory good. 
C) a final good. 
D) an intermediate good. 
A) an inventory good. 
B) a transitory good. 
C) a final good. 
D) an intermediate good.

Question 5

In the equation Y = C + I + G + NX,

Accepted Answer

A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct. 
A) Y represents the economy's total expenditure. 
B) C represents household expenditures on services and durable goods. 
C) all of the variables are always positive numbers. 
D) All of the above are correct.

Question 6

U.S. GDP and U.S. GNP are related as follows:

Accepted Answer

A) GNP = GDP + Value of exported goods - Value of imported goods. 
B) GNP = GDP - Value of exported goods + Value of imported goods. 
C) GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad. 
D) GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad. 
A) GNP = GDP + Value of exported goods - Value of imported goods. 
B) GNP = GDP - Value of exported goods + Value of imported goods. 
C) GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad. 
D) GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.

Question 7

GDP is equal to

Accepted Answer

A) the market value of all final goods and services produced within a country in a given period of time. 
B) Y. 
C) C + I + G + NX. 
D) All of the above are correct. 
A) the market value of all final goods and services produced within a country in a given period of time. 
B) Y. 
C) C + I + G + NX. 
D) All of the above are correct.

Question 8

In a simple circular-flow diagram, total income and total expenditure are

Accepted Answer

A) never equal because total income always exceeds total expenditure. 
B) seldom equal because of the ongoing changes in an economy's unemployment rate. 
C) equal only when the government purchases no goods or services. 
D) always equal because every transaction has a buyer and a seller. 
A) never equal because total income always exceeds total expenditure. 
B) seldom equal because of the ongoing changes in an economy's unemployment rate. 
C) equal only when the government purchases no goods or services. 
D) always equal because every transaction has a buyer and a seller.

Question 9

Table 10-1
The table below contains data for country A for the year 2010. $\begin{array}{|l|l|}
\hline \text { Household purchases of durable goods } & \$ 1293 \
\hline \text { Household purchases of nondurable goods } & \$ 1717 \
\hline \text { Household purchases of services } & \$ 301 \
\hline \text { Household purchases of new housing } & \$ 704 \
\hline \text { Purchases of capital equipment } & \$ 310 \
\hline \text { Inventory changes } & \$ 374 \
\hline \text { Purchases of new structures } & \$ 611 \
\hline \text { Depreciation } & \$ 117 \
\hline \text { Salaries of government workers } & \$ 1422 \
\hline \text { Government expenditures on public works } & \$ 553 \
\hline \text { Transfer payments } & \$ 777 \
\hline \text { Foreign purchases of domestically produced goods } & \$ 88 \
\hline \text { Domestic purchases of foreign goods } & \$ 120 \
\hline
\end{array}$

-Refer to Table 10-1. What was country A's consumption in 2010?

Accepted Answer

A) $2018 
B) $3010 
C) $3311 
D) $4015 
A) $2018 
B) $3010 
C) $3311 
D) $4015

Question 10

Which of the following is included in the investment component of GDP?

Accepted Answer

A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP. 
A) spending to build new houses 
B) spending to build new factories 
C) spending on business equipment such as welding equipment 
D) All of the above are included in the investment component of GDP.

Question 11

Grapes are considered intermediate goods

Accepted Answer

A) whether the purchaser uses them to make wine to sell or eats them. 
B) if the purchaser uses them to make wine to sell others but not if the purchaser eats them. 
C) if the purchaser eats them, but not if the purchaser uses to them to make wine to sell. 
D) None of the above is correct. 
A) whether the purchaser uses them to make wine to sell or eats them. 
B) if the purchaser uses them to make wine to sell others but not if the purchaser eats them. 
C) if the purchaser eats them, but not if the purchaser uses to them to make wine to sell. 
D) None of the above is correct.

Question 12

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell. 
A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell.

Question 13

Macroeconomic statistics tell us about a particular household, firm, or market.

Accepted Answer

A) True 
 B)False

Question 14

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Accepted Answer

A) True 
 B)False

Question 15

Gross domestic product includes all

Accepted Answer

A) legal and illegal final goods, but it excludes all legal and illegal final services. 
B) legal and illegal final goods and all legal and illegal final services. 
C) legal final goods and services, but it excludes illegal final goods and services. 
D) legal and illegal final goods and legal final services, but it excludes illegal final services. 
A) legal and illegal final goods, but it excludes all legal and illegal final services. 
B) legal and illegal final goods and all legal and illegal final services. 
C) legal final goods and services, but it excludes illegal final goods and services. 
D) legal and illegal final goods and legal final services, but it excludes illegal final services.

Question 16

The investment component of GDP refers to financial investment in stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 17

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell. 
A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell.

Question 18

Which of the following is included in the consumption component of GDP?

Accepted Answer

A) household purchases of appliances. 
B) household purchases of medical care. 
C) household purchases of food. 
D) All of the above are included in the consumption component of GDP. 
A) household purchases of appliances. 
B) household purchases of medical care. 
C) household purchases of food. 
D) All of the above are included in the consumption component of GDP.

Question 19

U.S. GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 20

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur

Exam 10: Measuring a Nations Income

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Which of the following values would be included in U.S. GDP for 2009?

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

Spots, Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called

In the equation Y = C + I + G + NX,

U.S. GDP and U.S. GNP are related as follows:

GDP is equal to

In a simple circular-flow diagram, total income and total expenditure are

Which of the following is included in the investment component of GDP?

Grapes are considered intermediate goods

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Macroeconomic statistics tell us about a particular household, firm, or market.

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Gross domestic product includes all

The investment component of GDP refers to financial investment in stocks and bonds.

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Which of the following is included in the consumption component of GDP?

U.S. GDP excludes the production of most illegal goods.

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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