Question 1

Transfer payments are included in:

Accepted Answer

A)  NI. 
B)  PI. 
C)  GDP. 
D)  NDP. 
A)  NI. 
B)  PI. 
C)  GDP. 
D)  NDP.

Question 2

Suppose that inventories were $80 billion in 2012 and $70 billion in 2013.In 2013,national income accountants would:

Accepted Answer

A)  add $10 billion to other elements of investment in calculating total investment. 
B)  subtract $10 billion from other elements of investment in calculating total investment. 
C)  add $75 billion (= $150/2)to other elements of investment in calculating total investment. 
D)  subtract $75 billion (= $150/2)from other elements of investment in calculating total investment. 
A)  add $10 billion to other elements of investment in calculating total investment. 
B)  subtract $10 billion from other elements of investment in calculating total investment. 
C)  add $75 billion (= $150/2)to other elements of investment in calculating total investment. 
D)  subtract $75 billion (= $150/2)from other elements of investment in calculating total investment.

Question 3

Which of the following is a source of data for the consumption component of the U.S.GDP?

Accepted Answer

A)  The Census Bureau's Retail Trade Survey. 
B)  The Census Bureau's Survey of Government Finance. 
C)  The Conference Board's Index of Leading Indicators. 
D)  The Bureau of Labor Statistics' Consumer Price Index. 
A)  The Census Bureau's Retail Trade Survey. 
B)  The Census Bureau's Survey of Government Finance. 
C)  The Conference Board's Index of Leading Indicators. 
D)  The Bureau of Labor Statistics' Consumer Price Index.

Question 4

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 income is:

Accepted Answer

A)  $229. 
B)  $253. 
C)  $274. 
D)  $243. 
A)  $229. 
B)  $253. 
C)  $274. 
D)  $243.

Question 5

In comparing GDP data over a period of years,a difference between nominal and real GDP may arise because:

Accepted Answer

A)  of changes in trade deficits and surpluses. 
B)  the length of the workweek has declined historically. 
C)  the price level may change over time. 
D)  depreciation may be greater or smaller than gross investment. 
A)  of changes in trade deficits and surpluses. 
B)  the length of the workweek has declined historically. 
C)  the price level may change over time. 
D)  depreciation may be greater or smaller than gross investment.

Question 6

Answer the question on the basis of the following data.All figures are in billions of dollars. $\begin{array}{llcc}
  \text {  Gross Private Domestic Investment} & \$46 \
 \text {  Exports of the U.S. } &9\
 \text {Disposable Income  } &190\
 \text { Personal Saving } &10\
 \text {Government Purchases  } &84\
 \text { Net Foreign Factor Income } &10\
  \text { Consumption of Fixed Capital } &52  \
 \text {Dividends  } &13\
 \text {  Imports of the U.S.} &12\
 \text {Taxes on Production and Imports  } &22\
 \text {  Personal Taxes} &38\
 \text {Social Security Contributions  } &23\
 \text {  Statistical Discrepancy} &0
\end{array}$
 Refer to the data.The net domestic product is:

Accepted Answer

A)  $233. 
B)  $255. 
C)  $230. 
D)  $348. 
A)  $233. 
B)  $255. 
C)  $230. 
D)  $348.

Question 7

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,real GDP for year 1 is:

Accepted Answer

A)  $25. 
B)  $100. 
C)  $20. 
D)  $80. 
A)  $25. 
B)  $100. 
C)  $20. 
D)  $80.

Question 8

The simplest way to calculate GDP is to sum the total sales of all business firms.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following transactions would be included in GDP?

Accepted Answer

A)  Mary buys a used book for $5 at a garage sale. 
B)  Nick buys $5,000 worth of stock in Microsoft. 
C)  Olivia receives a tax refund of $500. 
D)  Peter buys a newly constructed house. 
A)  Mary buys a used book for $5 at a garage sale. 
B)  Nick buys $5,000 worth of stock in Microsoft. 
C)  Olivia receives a tax refund of $500. 
D)  Peter buys a newly constructed house.

Question 10

If nominal GDP rises:

Accepted Answer

A)  real GDP may either rise or fall. 
B)  we can be certain that the price level has risen. 
C)  real GDP must fall. 
D)  real GDP must also rise. 
A)  real GDP may either rise or fall. 
B)  we can be certain that the price level has risen. 
C)  real GDP must fall. 
D)  real GDP must also rise.

Question 11

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Accepted Answer

A)  $110. 
B)  $30. 
C)  $40. 
D)  $70. 
A)  $110. 
B)  $30. 
C)  $40. 
D)  $70.

Question 12

Personal income usually exceeds disposable income.

Accepted Answer

A) True 
 B)False

Question 13

Value added can be determined by:

Accepted Answer

A)  summing the profits of all enterprises in the economy. 
B)  subtracting the purchase of intermediate products from the value of the sales of final products. 
C)  calculating the year-to-year changes in real GDP. 
D)  deflating nominal GDP. 
A)  summing the profits of all enterprises in the economy. 
B)  subtracting the purchase of intermediate products from the value of the sales of final products. 
C)  calculating the year-to-year changes in real GDP. 
D)  deflating nominal GDP.

Question 14

A nation's gross domestic product (GDP):

Accepted Answer

A)  is the dollar value of all final output produced within the borders of the nation during a specific period of time. 
B)  is the dollar value of all final output produced by its citizens,regardless of where they are living. 
C)  can be found by summing C + In + S + Xn. 
D)  is always some amount less than C + Ig + G + Xn. 
A)  is the dollar value of all final output produced within the borders of the nation during a specific period of time. 
B)  is the dollar value of all final output produced by its citizens,regardless of where they are living. 
C)  can be found by summing C + In + S + Xn. 
D)  is always some amount less than C + Ig + G + Xn.

Question 15

In calculating GDP,governmental transfer payments,such as Social Security or unemployment compensation,are:

Accepted Answer

A)  not counted. 
B)  counted as investment spending. 
C)  counted as government spending. 
D)  counted as consumption spending. 
A)  not counted. 
B)  counted as investment spending. 
C)  counted as government spending. 
D)  counted as consumption spending.

Question 16

Value added refers to:

Accepted Answer

A)  any increase in GDP that has been adjusted for adverse environmental effects. 
B)  the excess of gross investment over net investment. 
C)  the difference between the value of a firm's output and the value of the inputs it has purchased from others. 
D)  the portion of any increase in GDP that is caused by inflation as opposed to an increase in real output. 
A)  any increase in GDP that has been adjusted for adverse environmental effects. 
B)  the excess of gross investment over net investment. 
C)  the difference between the value of a firm's output and the value of the inputs it has purchased from others. 
D)  the portion of any increase in GDP that is caused by inflation as opposed to an increase in real output.

Question 17

Which of the following is a final good or service?

Accepted Answer

A)  A haircut purchased by a father for his 12 year-old son. 
B)  Fertilizer purchased by a farm supplier. 
C)  Diesel fuel bought for a delivery truck. 
D)  Chevrolet windows purchased by a General Motors assembly plant. 
A)  A haircut purchased by a father for his 12 year-old son. 
B)  Fertilizer purchased by a farm supplier. 
C)  Diesel fuel bought for a delivery truck. 
D)  Chevrolet windows purchased by a General Motors assembly plant.

Question 18

Which of the following best defines disposable income?

Accepted Answer

A)  Income received by households less personal taxes. 
B)  The before-tax income received by households. 
C)  All income earned by resource suppliers for their current contributions to production. 
D)  The market value of the annual output net of consumption of fixed capital. 
A)  Income received by households less personal taxes. 
B)  The before-tax income received by households. 
C)  All income earned by resource suppliers for their current contributions to production. 
D)  The market value of the annual output net of consumption of fixed capital.

Question 19

Answer the question on the basis of the following information: $\begin{array}{c}
\begin{array}{c}
\
\underline{\text { Year }} \
1 \
2 \
3 \
4 \
5
\end{array}
\begin{array}{c}
\text { Nominal}\
\underline{\text { GDP } }\
 \$ 550 \
560 \
576 \
586 \
604
\end{array}
\begin{array}{c}
\text { Price}\
\underline{\text { Index}}\
140 \
135 \
120 \
117 \
108
\end{array}
\end{array}$
  In the economy above:

Accepted Answer

A)  the price level is rising faster than nominal GDP. 
B)  nominal and real GDP are growing at the same rate. 
C)  the growth of nominal GDP understates the growth of real GDP. 
D)  the growth of nominal GDP overstates the growth of real GDP. 
A)  the price level is rising faster than nominal GDP. 
B)  nominal and real GDP are growing at the same rate. 
C)  the growth of nominal GDP understates the growth of real GDP. 
D)  the growth of nominal GDP overstates the growth of real GDP.

Question 20

Answer the question on the basis of the following data.All figures are in billions of dollars. $\begin{array} { l r } 
\text { Gross Investment } & \$ 18 \
\text { National Income } & 100 \
\text { Net Exports } & 2 \
\text { Personal Income } & 85 \
\text { Personal Consumption Expenditures } & 70 \
\text { Saving } & 5 \
\text { Government Purchases } & 20 \
\text { Net Domestic Product } & 105 \
\text { Statistical Discrepancy } & 0
\end{array}$ Refer to the data.Consumption of fixed capital is:

Accepted Answer

A)  $5. 
B)  $10. 
C)  $20. 
D)  $30. 
A)  $5. 
B)  $10. 
C)  $20. 
D)  $30.

Transfer payments are included in:

Suppose that inventories were $80 billion in 2012 and $70 billion in 2013.In 2013,national income accountants would:

Which of the following is a source of data for the consumption component of the U.S.GDP?

In comparing GDP data over a period of years,a difference between nominal and real GDP may arise because:

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. 1 2 3 Units of 20 25 30 Price Per \ 4 4 6 Refer to the data.If year 2 is chosen as the base year,real GDP for year 1 is:

The simplest way to calculate GDP is to sum the total sales of all business firms.

Which of the following transactions would be included in GDP?

If nominal GDP rises:

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Personal income usually exceeds disposable income.

Value added can be determined by:

A nation's gross domestic product (GDP):

In calculating GDP,governmental transfer payments,such as Social Security or unemployment compensation,are:

Value added refers to:

Which of the following is a final good or service?

Which of the following best defines disposable income?

Answer the question on the basis of the following information: 1 2 3 4 5 Nominal \ 550 560 576 586 604 Price 140 135 120 117 108 In the economy above:

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

Exam 26: Measuring Domestic Output and National Income

Transfer payments are included in:

Suppose that inventories were $80 billion in 2012 and $70 billion in 2013.In 2013,national income accountants would:

Which of the following is a source of data for the consumption component of the U.S.GDP?

In comparing GDP data over a period of years,a difference between nominal and real GDP may arise because:

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. 1 2 3 Units of 20 25 30 Price Per \ 4 4 6 Refer to the data.If year 2 is chosen as the base year,real GDP for year 1 is:

The simplest way to calculate GDP is to sum the total sales of all business firms.

Which of the following transactions would be included in GDP?

If nominal GDP rises:

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Personal income usually exceeds disposable income.

Value added can be determined by:

A nation's gross domestic product (GDP):

In calculating GDP,governmental transfer payments,such as Social Security or unemployment compensation,are:

Value added refers to:

Which of the following is a final good or service?

Which of the following best defines disposable income?

Answer the question on the basis of the following information: 1 2 3 4 5 Nominal \ 550 560 576 586 604 Price 140 135 120 117 108 In the economy above:

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