Question 1

Describe briefly how the final value of an iPhone which costs $700 must be equal to the sum of incomes generated by the production of the iPhone.

Accepted Answer

Consider the value of an iPhone which co

Question 2

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 3

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 4

Table 8-13
   Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 8-13.Nominal GDP for Vicuna for 2016 equals

Accepted Answer

A) $4,920. 
B) $5,100. 
C) $5,300. 
D) $5,850. 
A) $4,920. 
B) $5,100. 
C) $5,300. 
D) $5,850.

Question 5

Which of the following is counted in GDP?

Accepted Answer

A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure 
A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure

Question 6

What is the largest component of spending in the United States?

Accepted Answer

A) consumption spending 
B) investment spending 
C) government purchases 
D) net investment spending 
A) consumption spending 
B) investment spending 
C) government purchases 
D) net investment spending

Question 7

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago

Accepted Answer

A) workers in the United States are worse off than they were over 100 years ago. 
B) workers in the United States earn less income than they did over 100 years ago. 
C) GDP is lower than it would be if U.S.workers worked the same workweek they had 100 years ago. 
D) GDP is higher than it would be if U.S.workers worked the same workweek they had 100 years ago. 
A) workers in the United States are worse off than they were over 100 years ago. 
B) workers in the United States earn less income than they did over 100 years ago. 
C) GDP is lower than it would be if U.S.workers worked the same workweek they had 100 years ago. 
D) GDP is higher than it would be if U.S.workers worked the same workweek they had 100 years ago.

Question 8

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 real GDP in 2018,using 2013 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 9

Value added equals the market price of the firm's product minus

Accepted Answer

A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment. 
A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment.

Question 10

The GDP deflator is the

Accepted Answer

A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP divided by 100. 
C) ratio of real GDP to nominal GDP multiplied by 100. 
D) ratio of nominal GDP to real GDP multiplied by 100. 
A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP divided by 100. 
C) ratio of real GDP to nominal GDP multiplied by 100. 
D) ratio of nominal GDP to real GDP multiplied by 100.

Question 11

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 nominal GDP in 2018 when 2013 is 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 12

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

Accepted Answer

A) produce goods and services no one wants. 
B) sell their goods and services to citizens in other countries. 
C) do not pay taxes to the government. 
D) employ illegal immigrants from other countries. 
A) produce goods and services no one wants. 
B) sell their goods and services to citizens in other countries. 
C) do not pay taxes to the government. 
D) employ illegal immigrants from other countries.

Question 13

If the quantity of goods and services produced in the economy decreases,

Accepted Answer

A) it may be possible for real GDP to increase. 
B) real GDP would certainly increase. 
C) it may be possible for nominal GDP to increase. 
D) nominal GDP would certainly increase. 
A) it may be possible for real GDP to increase. 
B) real GDP would certainly increase. 
C) it may be possible for nominal GDP to increase. 
D) nominal GDP would certainly increase.

Question 14

If nominal GDP rises we can say that

Accepted Answer

A) production has risen and prices remain constant. 
B) prices have risen and production remains constant. 
C) production has risen or prices have risen or both have risen. 
D) production has fallen and prices have risen. 
A) production has risen and prices remain constant. 
B) prices have risen and production remains constant. 
C) production has risen or prices have risen or both have risen. 
D) production has fallen and prices have risen.

Question 15

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Accepted Answer

A) $75 
B) $1,425 
C) $1,500 
D) $4,425 
A) $75 
B) $1,425 
C) $1,500 
D) $4,425

Question 16

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

Accepted Answer

Disagree.It depends on whether the year

Question 17

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Accepted Answer

A) GDP will decrease. 
B) GDP will increase. 
C) GDP will not change. 
D) GDP may increase or may decrease depending on inflation. 
A) GDP will decrease. 
B) GDP will increase. 
C) GDP will not change. 
D) GDP may increase or may decrease depending on inflation.

Question 18

If prices are rising on average,then

Accepted Answer

A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year. 
A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year.

Question 19

Table 8-14
  
-Refer to Table 8-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2018 equals

Accepted Answer

A) 92.2. 
B) 102.6. 
C) 108.5. 
D) 109.1. 
A) 92.2. 
B) 102.6. 
C) 108.5. 
D) 109.1.

Question 20

When Ford increases the production of cars in Romania,which of the following occurs?

Accepted Answer

A) GDP in the United States rises. 
B) GNP in the United States rises. 
C) GNP in Romania rises. 
D) Both A and C occur. 
A) GDP in the United States rises. 
B) GNP in the United States rises. 
C) GNP in Romania rises. 
D) Both A and C occur.

Describe briefly how the final value of an iPhone which costs $700 must be equal to the sum of incomes generated by the production of the iPhone.

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

National income equals gross national product minus

Table 8-13 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 8-13.Nominal GDP for Vicuna for 2016 equals

Which of the following is counted in GDP?

What is the largest component of spending in the United States?

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago

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 real GDP in 2018,using 2013 as the base year?

Value added equals the market price of the firm's product minus

The GDP deflator is the

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 nominal GDP in 2018 when 2013 is the base year?

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

If the quantity of goods and services produced in the economy decreases,

If nominal GDP rises we can say that

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

If prices are rising on average,then

Table 8-14 -Refer to Table 8-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2018 equals

When Ford increases the production of cars in Romania,which of the following occurs?

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

Filters

Exam 8: GDP: Measuring Total Production and Income

Describe briefly how the final value of an iPhone which costs $700 must be equal to the sum of incomes generated by the production of the iPhone.

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

National income equals gross national product minus

Table 8-13 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 8-13.Nominal GDP for Vicuna for 2016 equals

Which of the following is counted in GDP?

What is the largest component of spending in the United States?

Because workers in the United States work fewer hours per week,on average,than they did over 100 years ago

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 real GDP in 2018,using 2013 as the base year?

Value added equals the market price of the firm's product minus

The GDP deflator is the

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 nominal GDP in 2018 when 2013 is the base year?

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

If the quantity of goods and services produced in the economy decreases,

If nominal GDP rises we can say that

Caroline is an artist.She purchases canvases,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much market value does Caroline add?

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry,and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

If prices are rising on average,then

Table 8-14 -Refer to Table 8-14.Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2018 equals

When Ford increases the production of cars in Romania,which of the following occurs?

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

Filters