Question 1

National income is derived from gross domestic product by

Accepted Answer

A) subtracting retained earnings from gross domestic product. 
B) adding personal taxes and depreciation to gross domestic product. 
C) subtracting depreciation from gross domestic product. 
D) adding personal income and transfer payments to gross domestic product. 
A) subtracting retained earnings from gross domestic product. 
B) adding personal taxes and depreciation to gross domestic product. 
C) subtracting depreciation from gross domestic product. 
D) adding personal income and transfer payments to gross domestic product.

Question 2

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

Accepted Answer

A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices,multiplies them by the quantity produced,and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices,multiplies them by the quantity produced,and then adds them up. 
A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices,multiplies them by the quantity produced,and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices,multiplies them by the quantity produced,and then adds them up.

Question 3

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

Accepted Answer

A) Avocado prices rise due to a late frost in California. 
B) The United Auto Workers sign a contract raising wages and benefits 7% over the next 3 years. 
C) Real GDP grows by 2.3% in the second quarter. 
D) Airlines raise ticket prices in response to rising fuel costs. 
A) Avocado prices rise due to a late frost in California. 
B) The United Auto Workers sign a contract raising wages and benefits 7% over the next 3 years. 
C) Real GDP grows by 2.3% in the second quarter. 
D) Airlines raise ticket prices in response to rising fuel costs.

Question 4

High-income countries such as the United States spend a greater amount on services as compared to goods.

Accepted Answer

A) True 
 B)False

Question 5

To examine how the total production of an economy has changed over time,it would be better to examine

Accepted Answer

A) real GDP. 
B) nominal GDP. 
C) GDP at current prices. 
D) the GDP deflator. 
A) real GDP. 
B) nominal GDP. 
C) GDP at current prices. 
D) the GDP deflator.

Question 6

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

Accepted Answer

A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D) GDP would increase well-being. 
A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D) GDP would increase well-being.

Question 7

Table 8-17
   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 8-17.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 8

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

Accepted Answer

A) reinforces previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
B) reinforces previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
C) contradicts previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
D) contradicts previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
A) reinforces previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
B) reinforces previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels. 
C) contradicts previously gathered data that most of the basic activities of government are conducted at the state and local levels rather than at the federal level. 
D) contradicts previously gathered data that most of the basic activities of government are conducted at the federal level rather than at state and local levels.

Question 9

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 10

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Accepted Answer

A) equals 
B) is greater than 
C) is less than 
D) may be greater than or less than 
A) equals 
B) is greater than 
C) is less than 
D) may be greater than or less than

Question 11

Which of the following transactions represents the purchase of a final good?

Accepted Answer

A) Starbucks purchases coffee beans. 
B) Delta buys a new European-made jetliner. 
C) Apple computer buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower. 
A) Starbucks purchases coffee beans. 
B) Delta buys a new European-made jetliner. 
C) Apple computer buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower.

Question 12

Table 8-18
   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 8-18.What is the GDP deflator in 2018 if 2018 is the base year?

Accepted Answer

A) 120 
B) 118 
C) 100 
D) 87 
A) 120 
B) 118 
C) 100 
D) 87

Question 13

Which of the following is included in gross domestic product for an economy in a given year?

Accepted Answer

A) the value of intermediate goods produced in that year 
B) the value of used goods sold in that year 
C) the value of final goods produced in that year 
D) All of the above would be included in gross domestic product for an economy in a given year. 
A) the value of intermediate goods produced in that year 
B) the value of used goods sold in that year 
C) the value of final goods produced in that year 
D) All of the above would be included in gross domestic product for an economy in a given year.

Question 14

Which of the following transactions would be included in the official calculation of GDP?

Accepted Answer

A) A student buys a used textbook at the bookstore. 
B) Firestone sells $2 million worth of tires to General Motors. 
C) You wash and wax your father's car as a favor to him. 
D) You buy a new iPod. 
E) You illegally download music off the Internet to put on your new iPod. 
A) A student buys a used textbook at the bookstore. 
B) Firestone sells $2 million worth of tires to General Motors. 
C) You wash and wax your father's car as a favor to him. 
D) You buy a new iPod. 
E) You illegally download music off the Internet to put on your new iPod.

Question 15

How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

Accepted Answer

A negative value added means that the co

Question 16

The size of the underground economy would tend to increase if the government of a country

Accepted Answer

A) decreased government regulations on businesses. 
B) increased income tax rates. 
C) legalized prostitution. 
D) legalized marijuana. 
A) decreased government regulations on businesses. 
B) increased income tax rates. 
C) legalized prostitution. 
D) legalized marijuana.

Question 17

Consumption expenditures do not include household purchases of

Accepted Answer

A) medical care. 
B) education. 
C) new houses. 
D) durable goods. 
A) medical care. 
B) education. 
C) new houses. 
D) durable goods.

Question 18

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Accepted Answer

GDP stands for gross domestic product an

Question 19

Investment spending includes spending on

Accepted Answer

A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments. 
A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments.

Question 20

An example of business fixed investment spending is

Accepted Answer

A) a purchase of a home by a household. 
B) a purchase of a computer by an accounting firm. 
C) a purchase of a bond by General Electric Corporation. 
D) $200 million of unsold cars at a car dealership. 
A) a purchase of a home by a household. 
B) a purchase of a computer by an accounting firm. 
C) a purchase of a bond by General Electric Corporation. 
D) $200 million of unsold cars at a car dealership.

National income is derived from gross domestic product by

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

High-income countries such as the United States spend a greater amount on services as compared to goods.

To examine how the total production of an economy has changed over time,it would be better to examine

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

Table 8-17 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 8-17.What is real GDP in 2018,using 2013 as the base year?

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

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?

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Which of the following transactions represents the purchase of a final good?

Table 8-18 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 8-18.What is the GDP deflator in 2018 if 2018 is the base year?

Which of the following is included in gross domestic product for an economy in a given year?

Which of the following transactions would be included in the official calculation of GDP?

How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

The size of the underground economy would tend to increase if the government of a country

Consumption expenditures do not include household purchases of

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Investment spending includes spending on

An example of business fixed investment spending is

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 8: GDP: Measuring Total Production and Income

National income is derived from gross domestic product by

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

High-income countries such as the United States spend a greater amount on services as compared to goods.

To examine how the total production of an economy has changed over time,it would be better to examine

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

Table 8-17 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 8-17.What is real GDP in 2018,using 2013 as the base year?

Steve Ballmer organized government spending data on the basis of four "missions" for government that he identified in the preamble to the U.S.Constitution.The data

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?

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Which of the following transactions represents the purchase of a final good?

Table 8-18 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 8-18.What is the GDP deflator in 2018 if 2018 is the base year?

Which of the following is included in gross domestic product for an economy in a given year?

Which of the following transactions would be included in the official calculation of GDP?

How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

The size of the underground economy would tend to increase if the government of a country

Consumption expenditures do not include household purchases of

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Investment spending includes spending on

An example of business fixed investment spending is

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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