Question 1

Which of the following items is included in U.S. GDP?

Accepted Answer

A) final goods and services that are purchased by the U.S. federal government 
B) intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period 
C) goods and services produced by foreign citizens working in the U.S. 
D) All of the above are included in U.S. GDP. 
A) final goods and services that are purchased by the U.S. federal government 
B) intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period 
C) goods and services produced by foreign citizens working in the U.S. 
D) All of the above are included in U.S. GDP.

Question 2

A Mexican company operates a restaurant in the U.S. The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A) U.S. GNP and Mexican GNP. 
B) U.S. GNP and Mexican GDP. 
C) U.S. GDP and Mexican GNP. 
D) U.S. GDP and Mexican GDP. 
A) U.S. GNP and Mexican GNP. 
B) U.S. GNP and Mexican GDP. 
C) U.S. GDP and Mexican GNP. 
D) U.S. GDP and Mexican GDP.

Question 3

Which of the following is always measured in prices from a base-year?

Accepted Answer

A) both nominal and real GDP 
B) nominal but not real GDP 
C) real but not nominal GDP 
D) neither nominal nor real GDP 
A) both nominal and real GDP 
B) nominal but not real GDP 
C) real but not nominal GDP 
D) neither nominal nor real GDP

Question 4

In a simple circular-flow diagram,

Accepted Answer

A) households spend all of their income. 
B) all goods and services are bought by households. 
C) expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. 
D) All of the above are correct. 
A) households spend all of their income. 
B) all goods and services are bought by households. 
C) expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. 
D) All of the above are correct.

Question 5

For an economy as a whole,

Accepted Answer

A) wages must equal profit. 
B) consumption must equal saving. 
C) income must equal expenditure. 
D) the number of buyers must equal the number of sellers. 
A) wages must equal profit. 
B) consumption must equal saving. 
C) income must equal expenditure. 
D) the number of buyers must equal the number of sellers.

Question 6

GDP is the market value of all final goods and services produced within a country in a given period of time.

Accepted Answer

A) True 
 B)False

Question 7

Macroeconomic statistics include GDP, the inflation rate, the unemployment rate, retail sales, and the trade deficit.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about GDP is correct?

Accepted Answer

A) GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money. 
C) GDP is generally regarded as the best single measure of a society's economic well-being. 
D) All of the above are correct. 
A) GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money. 
C) GDP is generally regarded as the best single measure of a society's economic well-being. 
D) All of the above are correct.

Question 9

Which of the following is included in U.S. GDP?

Accepted Answer

A) the value of production by a Singaporean working in the U.S. 
B) the value of production by an American working in Singapore 
C) Both (a) and (b) are correct. 
D) Neither (a) nor (b) is correct. 
A) the value of production by a Singaporean working in the U.S. 
B) the value of production by an American working in Singapore 
C) Both (a) and (b) are correct. 
D) Neither (a) nor (b) is correct.

Question 10

Unlike national income, personal income

Accepted Answer

A) includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government. 
B) excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government. 
C) excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government. 
D) includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government. 
A) includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government. 
B) excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government. 
C) excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government. 
D) includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government.

Question 11

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator ?

Accepted Answer

A) 25 
B) 40 
C) 250 
D) 400 
A) 25 
B) 40 
C) 250 
D) 400

Question 12

According to the circular-flow diagram GDP

Accepted Answer

A) can be computed as the total income paid by firms or as expenditures on final goods and services. 
B) can be computed as the total income paid by firms, but not as expenditures on final goods and services. 
C) can be computed as expenditures on final goods and services, but not as the total income paid by firms. 
D) cannot be computed as either total income paid by firms or expenditures on final goods and services. 
A) can be computed as the total income paid by firms or as expenditures on final goods and services. 
B) can be computed as the total income paid by firms, but not as expenditures on final goods and services. 
C) can be computed as expenditures on final goods and services, but not as the total income paid by firms. 
D) cannot be computed as either total income paid by firms or expenditures on final goods and services.

Question 13

Table 10-1
The table below contains data for Bahkan for the year 2010. $\begin{array}{|l|l|}
\hline \text { GDP } & \$ 110 \
\hline \text { Income earned by citizens abroad } & \$ 5 \
\hline \text { Income foreigners earn here } & \$ 15 \
\hline \text { Losses from depreciation } & \$ 4 \
\hline \text { Indirect business taxes } & \$ 6 \
\hline \text { Statistical discrepancy } & \$ 0 \
\hline \text { Retained earnings } & \$ 5 \
\hline \text { Corporate income taxes } & \$ 6 \
\hline \text { Social insurance contributions } & \$ 10 \
\hline \text { Interest paid to households by government } & \$ 5 \
\hline \text { Transfer payments to households from government } & \$ 15 \
\hline \text { Personal taxes } & \$ 30 \
\hline \text { Nontax payments to government } & \$ 5 \
\hline
\end{array}$

-Refer to Table 10-1. Net national product for Bahkan in 2010 is

Accepted Answer

A) $96 
B) $104 
C) $106 
D) $116 
A) $96 
B) $104 
C) $106 
D) $116

Question 14

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Accepted Answer

A) Both item (1) and item (2) are included in the consumption component of GDP. 
B) Item (1) is included in the consumption component of GDP, while item (2) is included in the investment component of GDP. 
C) Item (1) is included in the investment component of GDP, while item (2) is included in the consumption component of GDP. 
D) Only item (2) is included in GDP, and it is included in the investment component. 
A) Both item (1) and item (2) are included in the consumption component of GDP. 
B) Item (1) is included in the consumption component of GDP, while item (2) is included in the investment component of GDP. 
C) Item (1) is included in the investment component of GDP, while item (2) is included in the consumption component of GDP. 
D) Only item (2) is included in GDP, and it is included in the investment component.

Question 15

Which of the following transactions adds to U.S. GDP for 2010?

Accepted Answer

A) In 2010, Ashley sells a car that she bought in 2006 to William for $5,000. 
B) An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time. 
C) When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,600 per month. 
D) None of the above transactions adds to U.S. GDP for 2010. 
A) In 2010, Ashley sells a car that she bought in 2006 to William for $5,000. 
B) An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time. 
C) When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,600 per month. 
D) None of the above transactions adds to U.S. GDP for 2010.

Question 16

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 17

In the United States in 2009, purchases of capital equipment, inventories, and structures represented approximately

Accepted Answer

A) 3 percent of GDP. 
B) 7 percent of GDP. 
C) 11 percent of GDP. 
D) 15 percent of GDP. 
A) 3 percent of GDP. 
B) 7 percent of GDP. 
C) 11 percent of GDP. 
D) 15 percent of GDP.

Question 18

Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?

Accepted Answer

A) Unemployment rate rises from 5 percent to 5.5 percent. 
B) Real GDP grows by 3.1 percent in the third quarter. 
C) Retail sales at stores show large gains. 
D) The price of oranges rises after an early frost. 
A) Unemployment rate rises from 5 percent to 5.5 percent. 
B) Real GDP grows by 3.1 percent in the third quarter. 
C) Retail sales at stores show large gains. 
D) The price of oranges rises after an early frost.

Question 19

In the economy of Ukzten in 2010, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Ukzten's net exports in 2010?

Accepted Answer

A) -$200 
B) $200 
C) $1800 
D) Net exports cannot be calculated from the information given. 
A) -$200 
B) $200 
C) $1800 
D) Net exports cannot be calculated from the information given.

Question 20

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Accepted Answer

A) decreases. 
B) increases. 
C) doesn't change because both legal and illegal production are included in GDP. 
D) doesn't change because these activities are never included in GDP. 
A) decreases. 
B) increases. 
C) doesn't change because both legal and illegal production are included in GDP. 
D) doesn't change because these activities are never included in GDP.

Exam 10: Measuring a Nations Income

Which of the following items is included in U.S. GDP?

A Mexican company operates a restaurant in the U.S. The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

Which of the following is always measured in prices from a base-year?

In a simple circular-flow diagram,

For an economy as a whole,

GDP is the market value of all final goods and services produced within a country in a given period of time.

Macroeconomic statistics include GDP, the inflation rate, the unemployment rate, retail sales, and the trade deficit.

Which of the following statements about GDP is correct?

Which of the following is included in U.S. GDP?

Unlike national income, personal income

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator ?

According to the circular-flow diagram GDP

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Which of the following transactions adds to U.S. GDP for 2010?

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

In the United States in 2009, purchases of capital equipment, inventories, and structures represented approximately

Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?

In the economy of Ukzten in 2010, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Ukzten's net exports in 2010?

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, 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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