Question 1

Which of the following is not an example of a transfer payment?

Accepted Answer

A) unemployment insurance payments 
B) health insurance payments to an army private 
C) social security payments to retirees 
D) social security payments to disabled persons 
A) unemployment insurance payments 
B) health insurance payments to an army private 
C) social security payments to retirees 
D) social security payments to disabled persons

Question 2

The circular flow diagram shows that

Accepted Answer

A) the value of total income is equal to the total value of expenditures on final goods and services. 
B) firms pay households wages,and households receive transfer payments from firms. 
C) households spend all their income on goods and services. 
D) GDP will be less than the total value of expenditures on final goods and services in the economy. 
A) the value of total income is equal to the total value of expenditures on final goods and services. 
B) firms pay households wages,and households receive transfer payments from firms. 
C) households spend all their income on goods and services. 
D) GDP will be less than the total value of expenditures on final goods and services in the economy.

Question 3

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Accepted Answer

A) average hours worked per week increased. 
B) amount of pollution decreased. 
C) price level increased. 
D) crime rate decreased. 
A) average hours worked per week increased. 
B) amount of pollution decreased. 
C) price level increased. 
D) crime rate decreased.

Question 4

A final good is one that

Accepted Answer

A) is used in the production of another good. 
B) is a natural resource used to produce a good. 
C) is purchased as an input in the production process. 
D) is purchased by its final user. 
A) is used in the production of another good. 
B) is a natural resource used to produce a good. 
C) is purchased as an input in the production process. 
D) is purchased by its final user.

Question 5

Explain the difference between Gross Domestic Product and Gross National Product.Give an example of each.

Accepted Answer

Gross Domestic product is the value of f

Question 6

If prices rise on average in the U.S.economy,the purchasing power of a dollar declines.

Accepted Answer

A) True 
 B)False

Question 7

High-income countries such as the United States spend a greater amount on services as compared to goods.

Accepted Answer

A) True 
 B)False

Question 8

Nominal GDP measures the value of all final goods and services at base-year prices.

Accepted Answer

A) True 
 B)False

Question 9

Between 2013 and 2014,if an economy's exports rise by $8 billion and its imports fall by $8 billion,by how much will GDP change between the two years,all else equal?

Accepted Answer

A) Net exports will increase GDP by $8 billion. 
B) The increase in exports is offset by the decrease in imports,so there is no change in net exports and no effect on GDP. 
C) Net exports will increase GDP by $16 billion. 
D) Net exports will decrease GDP by $8 billion. 
A) Net exports will increase GDP by $8 billion. 
B) The increase in exports is offset by the decrease in imports,so there is no change in net exports and no effect on GDP. 
C) Net exports will increase GDP by $16 billion. 
D) Net exports will decrease GDP by $8 billion.

Question 10

Disposable personal income is defined as

Accepted Answer

A) personal income less personal taxes plus indirect sales taxes. 
B) personal income less transfer payments plus personal taxes. 
C) personal income less personal taxes. 
D) personal income less depreciation. 
A) personal income less personal taxes plus indirect sales taxes. 
B) personal income less transfer payments plus personal taxes. 
C) personal income less personal taxes. 
D) personal income less depreciation.

Question 11

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S.________ and the South Korean ________.

Accepted Answer

A) GDP; GDP 
B) GNP; GDP 
C) GDP; GNP 
D) GNP; GNP 
A) GDP; GDP 
B) GNP; GDP 
C) GDP; GNP 
D) GNP; GNP

Question 12

In a small economy,consumption spending in 2013 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2013?

Accepted Answer

A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700 
A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700

Question 13

Table 8-8
  
-Refer to Table 8-8.Suppose that a simple economy produces only four goods and services: sweaters,CDs,sugar,and soft drinks.Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households.Calculate nominal GDP for this simple economy.

Accepted Answer

Nominal GDP equals (

Question 14

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 15

A car that is produced in 2013 is not sold until 2014.According to the definition of GDP,in which year's GDP should it be counted?

Accepted Answer

A) 2013 
B) 2014 
C) Half of the sales price will count as part of 2013 GDP and half will count as part of 2014 GDP. 
D) The production cost will count as part of 2013 GDP while the sales price will count as part of 2014 GDP. 
A) 2013 
B) 2014 
C) Half of the sales price will count as part of 2013 GDP and half will count as part of 2014 GDP. 
D) The production cost will count as part of 2013 GDP while the sales price will count as part of 2014 GDP.

Question 16

If the GDP deflator is 142,by how much have prices changed since the base year?

Accepted Answer

A) Prices have increased by 42%. 
B) Prices have increased by 142%. 
C) Prices have decreased by 4.2%. 
D) Prices have increased by 58%. 
A) Prices have increased by 42%. 
B) Prices have increased by 142%. 
C) Prices have decreased by 4.2%. 
D) Prices have increased by 58%.

Question 17

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A) If nominal GDP increases from one year to the next,we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next,we know that production of goods and services has risen. 
A) If nominal GDP increases from one year to the next,we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next,we know that production of goods and services has risen.

Question 18

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

Accepted Answer

A) U.S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP. 
A) U.S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP.

Question 19

The values of real GDP and real GNP are almost the same for the United States.

Accepted Answer

A) True 
 B)False

Question 20

Total income in an economy is equal to

Accepted Answer

A) GDP minus net exports. 
B) income minus taxes. 
C) the sum of wages,interest,rent,and profit. 
D) firm revenues. 
A) GDP minus net exports. 
B) income minus taxes. 
C) the sum of wages,interest,rent,and profit. 
D) firm revenues.

Which of the following is not an example of a transfer payment?

The circular flow diagram shows that

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

A final good is one that

Explain the difference between Gross Domestic Product and Gross National Product.Give an example of each.

If prices rise on average in the U.S.economy,the purchasing power of a dollar declines.

High-income countries such as the United States spend a greater amount on services as compared to goods.

Nominal GDP measures the value of all final goods and services at base-year prices.

Between 2013 and 2014,if an economy's exports rise by $8 billion and its imports fall by $8 billion,by how much will GDP change between the two years,all else equal?

Disposable personal income is defined as

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. and the South Korean .

In a small economy,consumption spending in 2013 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2013?

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

A car that is produced in 2013 is not sold until 2014.According to the definition of GDP,in which year's GDP should it be counted?

If the GDP deflator is 142,by how much have prices changed since the base year?

Which of the following is a true statement about real and nominal GDP?

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

The values of real GDP and real GNP are almost the same for the United States.

Total income in an economy is equal to

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 is not an example of a transfer payment?

The circular flow diagram shows that

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

A final good is one that

Explain the difference between Gross Domestic Product and Gross National Product.Give an example of each.

If prices rise on average in the U.S.economy,the purchasing power of a dollar declines.

High-income countries such as the United States spend a greater amount on services as compared to goods.

Nominal GDP measures the value of all final goods and services at base-year prices.

Between 2013 and 2014,if an economy's exports rise by $8 billion and its imports fall by $8 billion,by how much will GDP change between the two years,all else equal?

Disposable personal income is defined as

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S.________ and the South Korean ________.

In a small economy,consumption spending in 2013 is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product in 2013?

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

A car that is produced in 2013 is not sold until 2014.According to the definition of GDP,in which year's GDP should it be counted?

If the GDP deflator is 142,by how much have prices changed since the base year?

Which of the following is a true statement about real and nominal GDP?

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

The values of real GDP and real GNP are almost the same for the United States.

Total income in an economy is equal to

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

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. and the South Korean .