Question 1

Nominal GDP is:

Accepted Answer

A)  the sum of all monetary transactions that occur in the economy in a year. 
B)  the sum of all monetary transactions involving final goods and services that occur in the economy in a year. 
C)  the amount of production that occurs when the economy is operating at full employment. 
D)  money GDP adjusted for inflation. 
A)  the sum of all monetary transactions that occur in the economy in a year. 
B)  the sum of all monetary transactions involving final goods and services that occur in the economy in a year. 
C)  the amount of production that occurs when the economy is operating at full employment. 
D)  money GDP adjusted for inflation.

Question 2

The value of U.S.imports is:

Accepted Answer

A)  added to exports when calculating GDP because imports reflect spending by Americans. 
B)  subtracted from exports when calculating GDP because imports do not constitute spending by Americans. 
C)  subtracted from exports when calculating GDP because imports do not constitute production in the United States. 
D)  added when calculating GDP because imports do not constitute production in the United States. 
A)  added to exports when calculating GDP because imports reflect spending by Americans. 
B)  subtracted from exports when calculating GDP because imports do not constitute spending by Americans. 
C)  subtracted from exports when calculating GDP because imports do not constitute production in the United States. 
D)  added when calculating GDP because imports do not constitute production in the United States.

Question 3

In a typical year,which of the following measures of aggregate output and income is likely to be the smallest?

Accepted Answer

A)  Gross domestic product. 
B)  National income. 
C)  Disposable income. 
D)  Personal income. 
A)  Gross domestic product. 
B)  National income. 
C)  Disposable income. 
D)  Personal income.

Question 4

If nominal GDP in some year is $280 and real GDP is $160,then the GDP price index for that year is:

Accepted Answer

A)  175. 
B)  57. 
C)  160. 
D)  280. 
A)  175. 
B)  57. 
C)  160. 
D)  280.

Question 5

Real GDP measures:

Accepted Answer

A)  current output at current prices. 
B)  current output at base year prices. 
C)  base year output at current prices. 
D)  base year output at current exchange rates. 
A)  current output at current prices. 
B)  current output at base year prices. 
C)  base year output at current prices. 
D)  base year output at current exchange rates.

Question 6

Use the following table for a hypothetical single-product economy. $\begin{array}{c}
\begin{array}{c}
\
\underline{\text { Year }} \
 1 \
2 \
3 \
4
\end{array}
\begin{array}{c}
\text {Units of}\
\underline{\text { Output}}\
10\
12\
15\
20
\end{array}
\begin{array}{c}
\text { Price of Bagel}\
\underline{\text {  Per Unit}}\
\$ 10\
20\
 30\
 40
\end{array}
\begin{array}{c}
\text {Price Index}\
\underline{\text {( Year 1=100)}}\
100\
200\
300\
400
\end{array}
\end{array}$
 Refer to the data.Real GDP in year 4 is:

Accepted Answer

A)  $320. 
B)  $450. 
C)  $200. 
D)  $800. 
A)  $320. 
B)  $450. 
C)  $200. 
D)  $800.

Question 7

Answer the question on the basis of the following national income data.All figures are in billions of dollars. $\begin{array} { l r } 
\text { Personal Taxes } & \$ 23 \
\text { Net Private Domestic Investment } & 33 \
\text { Net Exports } & 6 \
\text { National Income } & 278 \
\text { U.S. Exports } & 20 \
\text { Gross Private Domestic Investment } & 56 \
\text { Disposable Income } & 220 \
\text { Taxes on Production and Imports } & 32 \
\text { Undistributed Corporate Profits } & 15 \
\text { Proprietors' Income } & 45 \
\text { Net Foreign Factors Income } & 0 \
\text { Statistical Discrepancy } & 0
\end{array}$ Refer to the data.Personal consumption expenditures:

Accepted Answer

A)  cannot be calculated. 
B)  are $231. 
C)  are $225. 
D)  are $205. 
A)  cannot be calculated. 
B)  are $231. 
C)  are $225. 
D)  are $205.

Question 8

In determining GDP by the expenditures method,it is appropriate to use net investment rather than gross investment as a measure of investment spending.

Accepted Answer

A) True 
 B)False

Question 9

Answer the question on the basis of the following national income data.All figures are in billions of dollars. $\begin{array} { l r } 
\text { Personal Taxes } & \$ 23 \
\text { Net Private Domestic Investment } & 33 \
\text { Net Exports } & 6 \
\text { National Income } & 278 \
\text { U.S. Exports } & 20 \
\text { Gross Private Domestic Investment } & 56 \
\text { Disposable Income } & 220 \
\text { Taxes on Production and Imports } & 32 \
\text { Undistributed Corporate Profits } & 15 \
\text { Proprietors' Income } & 45 \
\text { Net Foreign Factors Income } & 0 \
\text { Statistical Discrepancy } & 0
\end{array}$ Refer to the data.U.S.imports are:

Accepted Answer

A)  $26. 
B)  $16. 
C)  $24. 
D)  $14. 
A)  $26. 
B)  $16. 
C)  $24. 
D)  $14.

Question 10

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

Accepted Answer

A) True 
 B)False

Question 11

Assume an economy that is producing only one product.Output and price data for a three-year period are as follows.Answer the question on the basis of these data. $\begin{array}{c}
\begin{array}{c}
\
\underline{\text { Year }} \
1 \
2 \
3
\end{array}
\begin{array}{c}
\text { Units of}\
\underline{\text {Output}}\
20\
25\
30
\end{array}
\begin{array}{c}
\text {Price Per}\
\underline{\text {Unit}}\
 \$ 4 \
4\
6 
\end{array}
\end{array}$
  Refer to the data.If year 2 is chosen as the base year,in years 1 and 3 the price index values,respectively,are:

Accepted Answer

A)  4 and 6. 
B)  6 and 4. 
C)  120 and 100. 
D)  100 and 150. 
A)  4 and 6. 
B)  6 and 4. 
C)  120 and 100. 
D)  100 and 150.

Question 12

Corporate profits are found by:

Accepted Answer

A)  summing corporate income taxes,dividends,and undistributed corporate profits. 
B)  adding corporate income taxes and dividends and subtracting undistributed corporate profits. 
C)  subtracting corporate income taxes from the sum of dividends and undistributed corporate profits. 
D)  summing dividends,undistributed corporate profits,and proprietors' income. 
A)  summing corporate income taxes,dividends,and undistributed corporate profits. 
B)  adding corporate income taxes and dividends and subtracting undistributed corporate profits. 
C)  subtracting corporate income taxes from the sum of dividends and undistributed corporate profits. 
D)  summing dividends,undistributed corporate profits,and proprietors' income.

Question 13

The system that measures the economy's overall performance is formally known as:

Accepted Answer

A)  national income accounting. 
B)  business cycle measurement. 
C)  GDP assessment. 
D)  final output and income statistics. 
A)  national income accounting. 
B)  business cycle measurement. 
C)  GDP assessment. 
D)  final output and income statistics.

Question 14

The fact that nominal GDP has risen faster than real GDP:

Accepted Answer

A)  suggests that the base year of the GDP price index has been shifted. 
B)  tells us nothing about what has happened to the price level. 
C)  suggests that the general price level has fallen. 
D)  suggests that the general price level has risen. 
A)  suggests that the base year of the GDP price index has been shifted. 
B)  tells us nothing about what has happened to the price level. 
C)  suggests that the general price level has fallen. 
D)  suggests that the general price level has risen.

Question 15

If depreciation (consumption of fixed capital)exceeds gross domestic investment,we can conclude that:

Accepted Answer

A)  nominal GDP is rising but real GDP is declining. 
B)  net investment is negative. 
C)  the economy is importing more than it exports. 
D)  the economy's production capacity is expanding. 
A)  nominal GDP is rising but real GDP is declining. 
B)  net investment is negative. 
C)  the economy is importing more than it exports. 
D)  the economy's production capacity is expanding.

Question 16

Real GDP is:

Accepted Answer

A)  the nominal value of all goods and services produced in the economy. 
B)  the nominal value of all goods and services produced in the domestic economy corrected for inflation or deflation. 
C)  that aggregate output that is produced when the economy is operating at full employment. 
D)  always greater than nominal GDP. 
A)  the nominal value of all goods and services produced in the economy. 
B)  the nominal value of all goods and services produced in the domestic economy corrected for inflation or deflation. 
C)  that aggregate output that is produced when the economy is operating at full employment. 
D)  always greater than nominal GDP.

Question 17

If intermediate goods and services were included in GDP:

Accepted Answer

A)  the GDP would be overstated. 
B)  the GDP would then have to be deflated for changes in the price level. 
C)  nominal GDP would exceed real GDP. 
D)  the GDP would be understated. 
A)  the GDP would be overstated. 
B)  the GDP would then have to be deflated for changes in the price level. 
C)  nominal GDP would exceed real GDP. 
D)  the GDP would be understated.

Question 18

In national income accounting,the consumption category of expenditures includes purchases of:

Accepted Answer

A)  both new and used consumer goods. 
B)  automobiles for personal use but not houses. 
C)  consumer durable and nondurable goods but not services. 
D)  consumer nondurable goods and services but not consumer durable goods. 
A)  both new and used consumer goods. 
B)  automobiles for personal use but not houses. 
C)  consumer durable and nondurable goods but not services. 
D)  consumer nondurable goods and services but not consumer durable goods.

Question 19

The purchase of Walmart stock is a part of gross investment,but not of net investment.

Accepted Answer

A) True 
 B)False

Question 20

The U.S.government agency responsible for compiling the national income accounts is the:

Accepted Answer

A)  Census Bureau. 
B)  Bureau of Labor Statistics (BLS). 
C)  Commerce Department's Bureau of Economic Analysis (BE
A) . 
D)  Government Accountability Office (GAO). 
A)  Census Bureau. 
B)  Bureau of Labor Statistics (BLS). 
C)  Commerce Department's Bureau of Economic Analysis (BE
A) . 
D)  Government Accountability Office (GAO).

Nominal GDP is:

The value of U.S.imports is:

In a typical year,which of the following measures of aggregate output and income is likely to be the smallest?

If nominal GDP in some year is $280 and real GDP is $160,then the GDP price index for that year is:

Real GDP measures:

Use the following table for a hypothetical single-product economy. 1 2 3 4 Units of 10 12 15 20 Price of Bagel \ 10 20 30 40 Price Index 100 200 300 400 Refer to the data.Real GDP in year 4 is:

In determining GDP by the expenditures method,it is appropriate to use net investment rather than gross investment as a measure of investment spending.

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

Corporate profits are found by:

The system that measures the economy's overall performance is formally known as:

The fact that nominal GDP has risen faster than real GDP:

If depreciation (consumption of fixed capital)exceeds gross domestic investment,we can conclude that:

Real GDP is:

If intermediate goods and services were included in GDP:

In national income accounting,the consumption category of expenditures includes purchases of:

The purchase of Walmart stock is a part of gross investment,but not of net investment.

The U.S.government agency responsible for compiling the national income accounts is the:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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Exam 26: Measuring Domestic Output and National Income

Nominal GDP is:

The value of U.S.imports is:

In a typical year,which of the following measures of aggregate output and income is likely to be the smallest?

If nominal GDP in some year is $280 and real GDP is $160,then the GDP price index for that year is:

Real GDP measures:

Use the following table for a hypothetical single-product economy. 1 2 3 4 Units of 10 12 15 20 Price of Bagel \ 10 20 30 40 Price Index 100 200 300 400 Refer to the data.Real GDP in year 4 is:

In determining GDP by the expenditures method,it is appropriate to use net investment rather than gross investment as a measure of investment spending.

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

Corporate profits are found by:

The system that measures the economy's overall performance is formally known as:

The fact that nominal GDP has risen faster than real GDP:

If depreciation (consumption of fixed capital)exceeds gross domestic investment,we can conclude that:

Real GDP is:

If intermediate goods and services were included in GDP:

In national income accounting,the consumption category of expenditures includes purchases of:

The purchase of Walmart stock is a part of gross investment,but not of net investment.

The U.S.government agency responsible for compiling the national income accounts is the:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters