Question 1

Which of the following is counted in GDP?

Accepted Answer

A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure 
A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure

Question 2

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Accepted Answer

A) greater than their values without these measurements. 
B) less than their values without these measurements. 
C) unchanged from their values without these measurements. 
D) meaningless,since GDP values without these measurements would no longer be of value. 
A) greater than their values without these measurements. 
B) less than their values without these measurements. 
C) unchanged from their values without these measurements. 
D) meaningless,since GDP values without these measurements would no longer be of value.

Question 3

If an American firm opens a production facility in India,the total value of the production will be included in the

Accepted Answer

A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India. 
A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India.

Question 4

The Philippines and Vietnam have roughly the same size population.Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion.You should conclude

Accepted Answer

A) a typical person in Vietnam is 10 times as well off as the typical person in the Philippines. 
B) a typical person in Vietnam is more than 10 times as well off as the typical person in the Philippines. 
C) a typical person in Vietnam is less than 10 times as well off as the typical person in the Philippines. 
D) it is not possible to make a good comparison of the economic well being of a typical individual in the 2 countries without additional information. 
A) a typical person in Vietnam is 10 times as well off as the typical person in the Philippines. 
B) a typical person in Vietnam is more than 10 times as well off as the typical person in the Philippines. 
C) a typical person in Vietnam is less than 10 times as well off as the typical person in the Philippines. 
D) it is not possible to make a good comparison of the economic well being of a typical individual in the 2 countries without additional information.

Question 5

In comparing China to Canada,China's relatively ________ growth rate in GDP would make you more likely to take a job in China,and China's relatively ________ level of GDP would make you less likely to take a job in China.

Accepted Answer

A) high; low 
B) high; high 
C) low; low 
D) low; high 
A) high; low 
B) high; high 
C) low; low 
D) low; high

Question 6

When consumers are less confident about their jobs or incomes,they are more likely to

Accepted Answer

A) reduce purchases of durable goods than nondurable goods. 
B) reduce purchases of nondurable goods and increase purchases of durable goods. 
C) increase investment spending and decrease consumption spending. 
D) increase consumption spending and decrease investment spending. 
A) reduce purchases of durable goods than nondurable goods. 
B) reduce purchases of nondurable goods and increase purchases of durable goods. 
C) increase investment spending and decrease consumption spending. 
D) increase consumption spending and decrease investment spending.

Question 7

Table 8-11
   Consider the following data for Tyrovia,a country that produces only two products: guns and butter.
-Refer to Table 8-11.Real GDP for Tyrovia for 2013 using 2005 as the base year equals

Accepted Answer

A) $1,140. 
B) $880. 
C) $690. 
D) $560. 
A) $1,140. 
B) $880. 
C) $690. 
D) $560.

Question 8

Which of the following transactions would take place in the "underground economy"?

Accepted Answer

A) Elizabeth tells her mother she's going to work but really goes to see a movie. 
B) Paul buys 15 gallons of gasoline for $3.29 a gallon,not realizing that $1.50 per gallon of that price goes to the government as tax revenue. 
C) John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes. 
D) Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it. 
A) Elizabeth tells her mother she's going to work but really goes to see a movie. 
B) Paul buys 15 gallons of gasoline for $3.29 a gallon,not realizing that $1.50 per gallon of that price goes to the government as tax revenue. 
C) John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes. 
D) Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it.

Question 9

The purchase by a foreign government of an airplane 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 10

The GDP deflator is equal to

Accepted Answer

A) real GDP divided by nominal GDP. 
B) nominal GDP divided by real GDP,multiplied by 100. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP,multiplied by 100. 
A) real GDP divided by nominal GDP. 
B) nominal GDP divided by real GDP,multiplied by 100. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP,multiplied by 100.

Question 11

How are intermediate goods treated in the calculation of GDP?

Accepted Answer

A) Their value is not counted separately,but included as part of the value of the final good for which they are an input. 
B) Their value is counted separately,and their value is also included as part of the value of the final good for which they are an input. 
C) Their value is counted separately,but is not included as part of the value of the final good for which they are an input. 
D) They are included only if they are imported. 
A) Their value is not counted separately,but included as part of the value of the final good for which they are an input. 
B) Their value is counted separately,and their value is also included as part of the value of the final good for which they are an input. 
C) Their value is counted separately,but is not included as part of the value of the final good for which they are an input. 
D) They are included only if they are imported.

Question 12

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Accepted Answer

A) True 
 B)False

Question 13

Disposable personal income is equal to personal income minus personal tax payments.

Accepted Answer

A) True 
 B)False

Question 14

Table 8-26
  
-Refer to Table 8-26.Given the information above,calculate the GDP deflator for both 2012 and 2013.What does the value of the deflator in the year 2012 tell you about that year with respect to the base year? What happened to prices in 2013 as compared to 2012?

Accepted Answer

To calculate the GDP deflator for 2012 a

Question 15

Which of the following goods is directly counted in GDP?

Accepted Answer

A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches 
A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches

Question 16

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi

Question 17

The underground economy can be described as

Accepted Answer

A) production of intermediate goods and services. 
B) economic production that includes mining. 
C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. 
D) production of infrastructure that spurs growth in the rest of the economy. 
A) production of intermediate goods and services. 
B) economic production that includes mining. 
C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. 
D) production of infrastructure that spurs growth in the rest of the economy.

Question 18

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.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Accepted Answer

A) $4,620. 
B) $5,100. 
C) $5,650. 
D) $5,850. 
A) $4,620. 
B) $5,100. 
C) $5,650. 
D) $5,850.

Question 19

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

Accepted Answer

If inflation and income grow at the same

Question 20

The purchase of a new house is included in

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.

Which of the following is counted in GDP?

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

If an American firm opens a production facility in India,the total value of the production will be included in the

The Philippines and Vietnam have roughly the same size population.Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion.You should conclude

In comparing China to Canada,China's relatively growth rate in GDP would make you more likely to take a job in China,and China's relatively level of GDP would make you less likely to take a job in China.

When consumers are less confident about their jobs or incomes,they are more likely to

Table 8-11 Consider the following data for Tyrovia,a country that produces only two products: guns and butter. -Refer to Table 8-11.Real GDP for Tyrovia for 2013 using 2005 as the base year equals

Which of the following transactions would take place in the "underground economy"?

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

The GDP deflator is equal to

How are intermediate goods treated in the calculation of GDP?

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Disposable personal income is equal to personal income minus personal tax payments.

Table 8-26 -Refer to Table 8-26.Given the information above,calculate the GDP deflator for both 2012 and 2013.What does the value of the deflator in the year 2012 tell you about that year with respect to the base year? What happened to prices in 2013 as compared to 2012?

Which of the following goods is directly counted in GDP?

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

The underground economy can be described as

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.Real GDP for Vicuna for 2009 using 2011 as the base year equals

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

The purchase of a new house is included in

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 counted in GDP?

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

If an American firm opens a production facility in India,the total value of the production will be included in the

The Philippines and Vietnam have roughly the same size population.Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion.You should conclude

In comparing China to Canada,China's relatively ________ growth rate in GDP would make you more likely to take a job in China,and China's relatively ________ level of GDP would make you less likely to take a job in China.

When consumers are less confident about their jobs or incomes,they are more likely to

Table 8-11 Consider the following data for Tyrovia,a country that produces only two products: guns and butter. -Refer to Table 8-11.Real GDP for Tyrovia for 2013 using 2005 as the base year equals

Which of the following transactions would take place in the "underground economy"?

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

The GDP deflator is equal to

How are intermediate goods treated in the calculation of GDP?

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Disposable personal income is equal to personal income minus personal tax payments.

Table 8-26 -Refer to Table 8-26.Given the information above,calculate the GDP deflator for both 2012 and 2013.What does the value of the deflator in the year 2012 tell you about that year with respect to the base year? What happened to prices in 2013 as compared to 2012?

Which of the following goods is directly counted in GDP?

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

The underground economy can be described as

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.Real GDP for Vicuna for 2009 using 2011 as the base year equals

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

The purchase of a new house is included in

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

In comparing China to Canada,China's relatively growth rate in GDP would make you more likely to take a job in China,and China's relatively level of GDP would make you less likely to take a job in China.