Question 1

Which of the following statements about the underground economy is true?

Accepted Answer

A) The underground economy in developing countries amounts to less than 10% of measured GDP. 
B) Most transactions that occur in the underground economy are included in the calculation of GDP. 
C) Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run. 
D) Income that is earned but not reported as income for tax purposes is included in the calculation of GDP. 
A) The underground economy in developing countries amounts to less than 10% of measured GDP. 
B) Most transactions that occur in the underground economy are included in the calculation of GDP. 
C) Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run. 
D) Income that is earned but not reported as income for tax purposes is included in the calculation of GDP.

Question 2

Caroline is an artist.She purchases canvas,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 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 3

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Accepted Answer

A) exports; foreign countries; the United States 
B) exports; the United States; the United States 
C) imports; foreign countries; foreign countries 
D) imports; foreign countries; the United States 
A) exports; foreign countries; the United States 
B) exports; the United States; the United States 
C) imports; foreign countries; foreign countries 
D) imports; foreign countries; the United States

Question 4

Presently,GDP is ________ to compensate for the costs of environmental damage.

Accepted Answer

A) fully adjusted 
B) partially adjusted 
C) adjusted on a chain-weight basis 
D) not adjusted 
A) fully adjusted 
B) partially adjusted 
C) adjusted on a chain-weight basis 
D) not adjusted

Question 5

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

Accepted Answer

A) $1,425 
B) $1,500 
C) $3,000 
D) $4,500 
A) $1,425 
B) $1,500 
C) $3,000 
D) $4,500

Question 6

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production. 
A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production.

Question 7

An example of an intermediate good would be

Accepted Answer

A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car. 
A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car.

Question 8

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 2009 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 9

Which of the following would be directly counted in GDP in 2014?

Accepted Answer

A) kitchen cabinets purchased from Home Depot in 2014 to be installed in a house built in 1997 
B) kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a brand new country-style home 
C) kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a farm house built in 1950 
D) none of the above 
A) kitchen cabinets purchased from Home Depot in 2014 to be installed in a house built in 1997 
B) kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a brand new country-style home 
C) kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a farm house built in 1950 
D) none of the above

Question 10

Table 8-7
  
-Refer to Table 8-7.Suppose that a simple economy produces only four goods and services: iPods,t-shirts,bottled water,and oranges.Calculate nominal GDP for this simple economy.

Accepted Answer

Nominal GDP equals (

Question 11

The "underground economy" is also referred to as

Accepted Answer

A) the informal sector. 
B) the formal sector. 
C) the halfway economy. 
D) the net domestic product economy. 
A) the informal sector. 
B) the formal sector. 
C) the halfway economy. 
D) the net domestic product economy.

Question 12

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 13

Table 8-21
  
-Refer to Table 8-21.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2013,using 2011 as the base year.Show your work.

Accepted Answer

Nominal GDP for 2013 equals (2

Question 14

National income is equal to

Accepted Answer

A) personal income minus personal taxes. 
B) GDP minus depreciation. 
C) disposable personal income plus depreciation plus personal taxes. 
D) GNP plus depreciation. 
A) personal income minus personal taxes. 
B) GDP minus depreciation. 
C) disposable personal income plus depreciation plus personal taxes. 
D) GNP plus depreciation.

Question 15

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

Accepted Answer

A) investment 
B) consumption 
C) depreciation 
D) intermediate goods 
A) investment 
B) consumption 
C) depreciation 
D) intermediate goods

Question 16

The purchase by a household in China of a CD 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 17

To make the calculation of real GDP more accurate,in 1996 the BEA switched to using

Accepted Answer

A) base-year prices. 
B) current prices. 
C) chain-weighted prices. 
D) market prices. 
A) base-year prices. 
B) current prices. 
C) chain-weighted prices. 
D) market prices.

Question 18

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) the underground economy. 
B) intermediate goods. 
C) inflation. 
D) exports. 
A) the underground economy. 
B) intermediate goods. 
C) inflation. 
D) exports.

Question 19

National income is defined as

Accepted Answer

A) gross national product plus transfer payments. 
B) gross national product less retained earnings plus transfer payments. 
C) gross domestic product less retained earnings plus transfer payments. 
D) gross domestic product less the consumption of fixed capital. 
A) gross national product plus transfer payments. 
B) gross national product less retained earnings plus transfer payments. 
C) gross domestic product less retained earnings plus transfer payments. 
D) gross domestic product less the consumption of fixed capital.

Question 20

The best measure of the income households actually have available to spend is

Accepted Answer

A) personal income. 
B) disposable personal income. 
C) national income. 
D) net national income. 
A) personal income. 
B) disposable personal income. 
C) national income. 
D) net national income.

Which of the following statements about the underground economy is true?

Caroline is an artist.She purchases canvas,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 value does Caroline add?

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .

Presently,GDP is ________ to compensate for the costs of environmental damage.

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

Gross domestic product understates the total production of final goods and services because of the omission of

An example of an intermediate good would be

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 2009 equals

Which of the following would be directly counted in GDP in 2014?

Table 8-7 -Refer to Table 8-7.Suppose that a simple economy produces only four goods and services: iPods,t-shirts,bottled water,and oranges.Calculate nominal GDP for this simple economy.

The "underground economy" is also referred to as

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?

Table 8-21 -Refer to Table 8-21.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2013,using 2011 as the base year.Show your work.

National income is equal to

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

The purchase by a household in China of a CD produced in the United States is included in U.S.

To make the calculation of real GDP more accurate,in 1996 the BEA switched to using

Gross domestic product understates the total production of final goods and services because of the omission of

National income is defined as

The best measure of the income households actually have available to spend 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

Filters

Exam 8: GDP: Measuring Total Production and Income

Which of the following statements about the underground economy is true?

Caroline is an artist.She purchases canvas,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 value does Caroline add?

Assuming that the United States is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Presently,GDP is ________ to compensate for the costs of environmental damage.

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

Gross domestic product understates the total production of final goods and services because of the omission of

An example of an intermediate good would be

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 2009 equals

Which of the following would be directly counted in GDP in 2014?

Table 8-7 -Refer to Table 8-7.Suppose that a simple economy produces only four goods and services: iPods,t-shirts,bottled water,and oranges.Calculate nominal GDP for this simple economy.

The "underground economy" is also referred to as

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?

Table 8-21 -Refer to Table 8-21.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2013,using 2011 as the base year.Show your work.

National income is equal to

In the United States in 2013,the Bureau of Economic Analysis began counting spending on research and development as ________,which counts as a part of GDP.

The purchase by a household in China of a CD produced in the United States is included in U.S.

To make the calculation of real GDP more accurate,in 1996 the BEA switched to using

Gross domestic product understates the total production of final goods and services because of the omission of

National income is defined as

The best measure of the income households actually have available to spend 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

Filters

Assuming that the United States is the domestic economy, are goods and services produced by and purchased by .