Question 1

Which one of the following activities is most likely to be counted in GDP?

Accepted Answer

A)  Fran volunteers at the local veteran's hospital twice a month. 
B)  Stu gave $5 to a homeless man he met in the park. 
C)  Gail buys paper and crayons to donate to poor children in need of school supplies. 
D)  Bud works hard five hours each week to make sure that his lawn always looks nice. 
A)  Fran volunteers at the local veteran's hospital twice a month. 
B)  Stu gave $5 to a homeless man he met in the park. 
C)  Gail buys paper and crayons to donate to poor children in need of school supplies. 
D)  Bud works hard five hours each week to make sure that his lawn always looks nice.

Question 2

The following table provides data for an economy in a certain year. $$\begin{array} { l r } 
\text { Consumption expenditures } & 1,000 \
\text { Imports } & 600 \
\text { Government purchases of goods and services } & 700 \
\text { Construction of new homes and apartments } & 500 \
\text { Sales of existing homes and apartments } & 600 \
\text { Exports } & 500 \
\text { Government payments to retirees } & 200 \
\text { Household purchases of durable goods } & 300 \
\text { Beginning-of-year inventory } & 500 \
\text { End-of-year inventory } & 600 \
\text { Business fixed investment } & 300
\end{array}$$ Given the data in the table, compute the government purchases component of GDP.

Accepted Answer

A)  200 
B)  500 
C)  700 
D)  900 
A)  200 
B)  500 
C)  700 
D)  900

Question 3

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

Accepted Answer

A)  decreased by $15 billion. 
B)  increased by $15 billion. 
C)  increased by $40 billion. 
D)  increased by $55 billion. 
A)  decreased by $15 billion. 
B)  increased by $15 billion. 
C)  increased by $40 billion. 
D)  increased by $55 billion.

Question 4

The following table provides data for an economy in a certain year. $$\begin{array} { l l } 
\text { Consumption expenditures } & 50 \
\text { Imports } & 40 \
\text { Government purchases of goods and services } & 20 \
\text { Construction of new homes and apartments } & 30 \
\text { Sales of existing homes and apartments } & 40 \
\text { Exports } & 50 \
\text { Government payments to retirees } & 10 \
\text { Household purchases of durable goods } & 20 \
\text { Beginning-of-year inventory } & 10 \
\text { End-of-year inventory } & 20 \
\text { Business fixed investment } & 30
\end{array}$$ Given the data in the table, how much did households spend on nondurables and services?

Accepted Answer

A)  20 
B)  30 
C)  50 
D)  70 
A)  20 
B)  30 
C)  50 
D)  70

Question 5

Final goods and services are ______ production and ______ counted in GDP.

Accepted Answer

A)  the end products of; are 
B)  the end products of; are not 
C)  used up in the process of; are 
D)  used up in the process of; are not 
A)  the end products of; are 
B)  the end products of; are not 
C)  used up in the process of; are 
D)  used up in the process of; are not

Question 6

If two countries are identical except that there is significant air and water pollution in one, then the level of GDP:

Accepted Answer

A)  will be higher in the country with pollution. 
B)  will be higher in the country with no pollution. 
C)  will be the same in both countries. 
D)  will be greater than the level of economic well being in each country. 
A)  will be higher in the country with pollution. 
B)  will be higher in the country with no pollution. 
C)  will be the same in both countries. 
D)  will be greater than the level of economic well being in each country.

Question 7

Summing the value added of all firms yields the value of final goods and services produced because both measures:

Accepted Answer

A)  exclude the value of capital goods. 
B)  exclude the value of intermediate goods and services. 
C)  use constant prices. 
D)  are adjusted for population growth. 
A)  exclude the value of capital goods. 
B)  exclude the value of intermediate goods and services. 
C)  use constant prices. 
D)  are adjusted for population growth.

Question 8

The value added by any firm equals the firm's ______ from selling the product minus _______.

Accepted Answer

A)  revenue; expenses 
B)  revenue; the cost of inputs purchased from other firms 
C)  profits; expenses 
D)  profits; the cost of inputs purchased from other firms 
A)  revenue; expenses 
B)  revenue; the cost of inputs purchased from other firms 
C)  profits; expenses 
D)  profits; the cost of inputs purchased from other firms

Question 9

Assume an economy produces only hamburgers and hotdogs and the base year is 2005. $$\begin{array} { l c c c c } 
&&{ \text { Quantities Produced } } & & { \text { Prices } } \
& \underline { 2005 } & \underline { 2006 } & \underline { 2005 } & \underline { 2006 } \
\text { Hamburgers } & 2,000 & 3,000 & \$ 2 & \$ 3 \
\text { Hotdogs } & 3,000 & 4,000 & \$ 1 & \$ 1.50
\end{array}$$ Given the data in the table above, what is the value of real GDP in 2006?

Accepted Answer

A)  $5,000 
B)  $7,000 
C)  $10,000 
D)  $10,500 
A)  $5,000 
B)  $7,000 
C)  $10,000 
D)  $10,500

Question 10

Which of the following is an example of a capital good?

Accepted Answer

A)  A new car sold to a family 
B)  A metal-stamping machine used to produce cars sold to an automaker 
C)  A new CD player sold to an automaker for installation in a car 
D)  A new CD player sold to a teenager 
A)  A new car sold to a family 
B)  A metal-stamping machine used to produce cars sold to an automaker 
C)  A new CD player sold to an automaker for installation in a car 
D)  A new CD player sold to a teenager

Question 11

GDP is a measure of an economy's:

Accepted Answer

A)  domestic price level. 
B)  level of unemployment. 
C)  total output. 
D)  domestic productivity. 
A)  domestic price level. 
B)  level of unemployment. 
C)  total output. 
D)  domestic productivity.

Question 12

Capital income in the U.S. equals approximately ______ of GDP.

Accepted Answer

A)  one third 
B)  two fifths 
C)  one half 
D)  two thirds 
A)  one third 
B)  two fifths 
C)  one half 
D)  two thirds

Question 13

Factories and machines are examples of:

Accepted Answer

A)  consumption goods. 
B)  non-market goods. 
C)  value-added goods. 
D)  capital goods. 
A)  consumption goods. 
B)  non-market goods. 
C)  value-added goods. 
D)  capital goods.

Question 14

Capital goods are

Accepted Answer

A)  long-lived goods used for producing other goods and services. 
B)  the end products of production. 
C)  publicly provided. 
D)  excluded from GDP. 
A)  long-lived goods used for producing other goods and services. 
B)  the end products of production. 
C)  publicly provided. 
D)  excluded from GDP.

Question 15

Which of the following is NOT classified as a final good?

Accepted Answer

A)  New clothing purchased by a college student 
B)  Fresh vegetables purchased by a restaurant 
C)  A new house purchased by a family 
D)  A new machine purchased by a business 
A)  New clothing purchased by a college student 
B)  Fresh vegetables purchased by a restaurant 
C)  A new house purchased by a family 
D)  A new machine purchased by a business

Question 16

Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was ______ and to real GDP in 2010 was _____.

Accepted Answer

A)  $80,000; $80,000 
B)  $80,000; $88,000 
C)  $80,000; $99,000 
D)  $88,000; $90,000 
A)  $80,000; $80,000 
B)  $80,000; $88,000 
C)  $80,000; $99,000 
D)  $88,000; $90,000

Question 17

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

Accepted Answer

A)  $3 
B)  $4 
C)  $7 
D)  $11 
A)  $3 
B)  $4 
C)  $7 
D)  $11

Question 18

______ is/are the market value of final goods and services produced within a country during a given period of time.

Accepted Answer

A)  GDP 
B)  Consumption 
C)  Value added 
D)  Transfer payments 
A)  GDP 
B)  Consumption 
C)  Value added 
D)  Transfer payments

Question 19

National defense services provided by the military are:

Accepted Answer

A)  included in GDP at market prices. 
B)  included in GDP at cost. 
C)  excluded from GDP because they are not sold in markets. 
D)  excluded from GDP because they are intermediate goods. 
A)  included in GDP at market prices. 
B)  included in GDP at cost. 
C)  excluded from GDP because they are not sold in markets. 
D)  excluded from GDP because they are intermediate goods.

Question 20

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c } 
 { \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$ What is the value added of Citrus Growers Inc.?

Accepted Answer

A)  $0.00 
B)  $0.50 
C)  $0.75 
D)  $1.75 
A)  $0.00 
B)  $0.50 
C)  $0.75 
D)  $1.75

Which one of the following activities is most likely to be counted in GDP?

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

Final goods and services are production and counted in GDP.

If two countries are identical except that there is significant air and water pollution in one, then the level of GDP:

Summing the value added of all firms yields the value of final goods and services produced because both measures:

The value added by any firm equals the firm's from selling the product minus _.

Assume an economy produces only hamburgers and hotdogs and the base year is 2005. Quantities Produced Prices Hamburgers 2,000 3,000 \ 2 \ 3 Hotdogs 3,000 4,000 \ 1 \ 1.50 Given the data in the table above, what is the value of real GDP in 2006?

Which of the following is an example of a capital good?

GDP is a measure of an economy's:

Capital income in the U.S. equals approximately ______ of GDP.

Factories and machines are examples of:

Capital goods are

Which of the following is NOT classified as a final good?

Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was __ and to real GDP in 2010 was _.

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

______ is/are the market value of final goods and services produced within a country during a given period of time.

National defense services provided by the military are:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Measuring Economic Activity: Gdp and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

Workers, Wages, and Unemployment

Saving and Capital Formation

Money, Prices, and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economics Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: the Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Filters

Exam 4: Macroeconomics: the Birds-Eye View of the Economy

Which one of the following activities is most likely to be counted in GDP?

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

Final goods and services are ______ production and ______ counted in GDP.

If two countries are identical except that there is significant air and water pollution in one, then the level of GDP:

Summing the value added of all firms yields the value of final goods and services produced because both measures:

The value added by any firm equals the firm's ______ from selling the product minus _______.

Assume an economy produces only hamburgers and hotdogs and the base year is 2005. Quantities Produced Prices Hamburgers 2,000 3,000 \ 2 \ 3 Hotdogs 3,000 4,000 \ 1 \ 1.50 Given the data in the table above, what is the value of real GDP in 2006?

Which of the following is an example of a capital good?

GDP is a measure of an economy's:

Capital income in the U.S. equals approximately ______ of GDP.

Factories and machines are examples of:

Capital goods are

Which of the following is NOT classified as a final good?

Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was ______ and to real GDP in 2010 was _____.

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

______ is/are the market value of final goods and services produced within a country during a given period of time.

National defense services provided by the military are:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Measuring Economic Activity: Gdp and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

Workers, Wages, and Unemployment

Saving and Capital Formation

Money, Prices, and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economics Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: the Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Filters

Final goods and services are production and counted in GDP.

The value added by any firm equals the firm's from selling the product minus _.

Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was __ and to real GDP in 2010 was _.