Question 1

In recent years, people have benefited from greater amounts of leisure time. This trend:

Accepted Answer

A)  has caused GDP to rise. 
B)  has caused GDP to fall. 
C)  made GDP fluctuate randomly. 
D)  is not accounted for in GDP. 
A)  has caused GDP to rise. 
B)  has caused GDP to fall. 
C)  made GDP fluctuate randomly. 
D)  is not accounted for in GDP. D

Question 2

Which of the following would not be included in the gross private domestic investment (I) category of GDP?

Accepted Answer

A)  A bakery's purchase of a new oven. 
B)  A retailer's additions to its inventories. 
C)  Newly built residential construction. 
D)  A bank's purchase of an Australian Treasury bond. 
A)  A bakery's purchase of a new oven. 
B)  A retailer's additions to its inventories. 
C)  Newly built residential construction. 
D)  A bank's purchase of an Australian Treasury bond. D

Question 3

The GDP implicit price deflator is:

Accepted Answer

A)  a broad index that includes the price of a specific basket of goods and services. 
B)  a more narrow measure than the CPI, as it only includes producer prices. 
C)  used to calculate nominal GDP from real GDP. 
D)  a measure of changes in the prices of consumer goods, business investment, government spending and exports and imports. 
A)  a broad index that includes the price of a specific basket of goods and services. 
B)  a more narrow measure than the CPI, as it only includes producer prices. 
C)  used to calculate nominal GDP from real GDP. 
D)  a measure of changes in the prices of consumer goods, business investment, government spending and exports and imports. D

Question 4

The expenditure approach for the calculation of GDP includes spending on:

Accepted Answer

A)  consumption, investment, durable goods and exports. 
B)  consumption, gross private domestic investment, government spending for goods and services, and exports. 
C)  consumption, gross private domestic investment, government spending for goods and services, and net exports. 
D)  consumption, net private domestic investment, government spending for goods and services, and net exports. 
A)  consumption, investment, durable goods and exports. 
B)  consumption, gross private domestic investment, government spending for goods and services, and exports. 
C)  consumption, gross private domestic investment, government spending for goods and services, and net exports. 
D)  consumption, net private domestic investment, government spending for goods and services, and net exports.

Question 5

Domestic factor income (DFI) is equal to:

Accepted Answer

A)  NDP minus indirect business taxes. 
B)  GDP minus indirect business taxes. 
C)  GNP minus depreciation. 
D)  GDP minus imports. 
A)  NDP minus indirect business taxes. 
B)  GDP minus indirect business taxes. 
C)  GNP minus depreciation. 
D)  GDP minus imports.

Question 6

Exports are a domestic spending for foreign products.

Accepted Answer

A) True 
 B)False

Question 7

If a woman marries her hired helper and keeps hiring him to do housework, the value of GDP:

Accepted Answer

A)  rises. 
B)  falls. 
C)  is unchanged. 
D)  rises, but the value of GNP falls. 
A)  rises. 
B)  falls. 
C)  is unchanged. 
D)  rises, but the value of GNP falls.

Question 8

Which of the following is a shortcoming of GDP?

Accepted Answer

A)  It excludes changes in inventories. 
B)  It includes an estimate of illegal transactions. 
C)  It excludes quality of products. 
D)  It includes business investment spending. 
A)  It excludes changes in inventories. 
B)  It includes an estimate of illegal transactions. 
C)  It excludes quality of products. 
D)  It includes business investment spending.

Question 9

Which of the following would not be included in the measurement of GDP?

Accepted Answer

A)  You hire someone to fix a leaky faucet. 
B)  You do the (unpaid) housework. 
C)  The value of housing services, if you own your own home. 
D)  An unplanned drop in business inventories. 
A)  You hire someone to fix a leaky faucet. 
B)  You do the (unpaid) housework. 
C)  The value of housing services, if you own your own home. 
D)  An unplanned drop in business inventories.

Question 10

Net domestic product is equal to GDP minus:

Accepted Answer

A)  indirect business taxes. 
B)  depreciation. 
C)  personal taxes. 
D)  retained earnings. 
A)  indirect business taxes. 
B)  depreciation. 
C)  personal taxes. 
D)  retained earnings.

Question 11

GDP counts only:

Accepted Answer

A)  all goods and services produced within the country. 
B)  transfer payments. 
C)  second-hand domestic products. 
D)  new domestic products. 
A)  all goods and services produced within the country. 
B)  transfer payments. 
C)  second-hand domestic products. 
D)  new domestic products.

Question 12

If a firm finds that it has a larger stock of inventory at the end of the period than it had at the start, the difference would be:

Accepted Answer

A)  counted as investment. 
B)  subtracted from total GDP. 
C)  counted as consumption on the assumption that it will eventually be sold. 
D)  counted as net exports. 
A)  counted as investment. 
B)  subtracted from total GDP. 
C)  counted as consumption on the assumption that it will eventually be sold. 
D)  counted as net exports.

Question 13

Narrbegin Exhibit 11.1 Expenditure approach
 $\begin{array}{|l|c|}
\hline \text {National income account}&
\text {(Billions of dollars)}\
\hline \text { Personal consumption expenditures }(C) & \$ 500 \
\hline \text { Net exports }(X-M) & 50 \
\hline \begin{array}{l}
\text { Federal government consumption and gross investment } \
\text { expenditures }(G)
\end{array} & 100 \
\hline \begin{array}{l}
\text { State and local government consumption and } \
\text { gross investment expenditures }(G)
\end{array} & 200 \
\hline \text { Imports } & 15 \
\hline \text { Gross private domestic investment }(I) & 65\
\hline
\end{array}$
 
-As shown in Exhibit 11.1, total expenditures by households for domestically produced goods are:

Accepted Answer

A)  $15 billion. 
B)  $50 billion. 
C)  $300 billion. 
D)  $500 billion. 
A)  $15 billion. 
B)  $50 billion. 
C)  $300 billion. 
D)  $500 billion.

Question 14

Which of the following increases GDP?

Accepted Answer

A)  More people walk to work rather than drive cars. 
B)  Increase in car accidents. 
C)  Farm families grow more for themselves than for the market. 
D)  Neither the price nor the quantity of television sets changes, but the quality of
Sets improves. 
A)  More people walk to work rather than drive cars. 
B)  Increase in car accidents. 
C)  Farm families grow more for themselves than for the market. 
D)  Neither the price nor the quantity of television sets changes, but the quality of
Sets improves.

Question 15

Net disposable income (NDI) is equal to:

Accepted Answer

A)  GDP minus transfer payments overseas. 
B)  NNP minus depreciation. 
C)  NNP minus transfer payments overseas. 
D)  GNE minus imports. 
A)  GDP minus transfer payments overseas. 
B)  NNP minus depreciation. 
C)  NNP minus transfer payments overseas. 
D)  GNE minus imports.

Question 16

Net national product is:

Accepted Answer

A)  NDP minus depreciation. 
B)  GDP minus depreciation. 
C)  NDP minus net income paid overseas. 
D)  GNP minus net income paid overseas. 
A)  NDP minus depreciation. 
B)  GDP minus depreciation. 
C)  NDP minus net income paid overseas. 
D)  GNP minus net income paid overseas.

Question 17

Net domestic product (NDP) is equal to gross domestic product (GDP) plus indirect business taxes.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following expenditures would be included in GDP for this year?

Accepted Answer

A)  The purchase of a new car. 
B)  The purchase of a new tyre by Holden for a new car. 
C)  The purchase of a used car. 
D)  All of these. 
A)  The purchase of a new car. 
B)  The purchase of a new tyre by Holden for a new car. 
C)  The purchase of a used car. 
D)  All of these.

Question 19

The circular flow model shows the flow of:

Accepted Answer

A)  products from households to businesses and the flow of resources from businesses to households. 
B)  products from households to businesses and the flow of productive resources from households to businesses. 
C)  products from businesses to households and the flow of money from households to
Businesses. 
D)  products from businesses to households and the flow of productive resources from households to businesses. 
A)  products from households to businesses and the flow of resources from businesses to households. 
B)  products from households to businesses and the flow of productive resources from households to businesses. 
C)  products from businesses to households and the flow of money from households to
Businesses. 
D)  products from businesses to households and the flow of productive resources from households to businesses.

Question 20

Narrbegin Exhibit 11.3 GDP data (billions of dollars)
 $\begin{array}{|l|r|}
\hline \text { Capital depreciation } & 950 \
\hline \text { Change in business inventory } & 50 \
\hline \text { Compensation of employees } & 5000 \
\hline \text { Corporate profit } & 600 \
\hline \text { Durable goods } & 600 \
\hline \text { Exports } & 100 \
\hline \text { Factor payments from the rest of the world } & 360 \
\hline \text { Factor payments to the rest of the world } & 300 \
\hline \text { Farm income } & 300 \
\hline \text { Gross private domestic investment } & 1000 \
\hline \text { Government spending } & 800 \
\hline \text { Imports } & 150 \
\hline \text { Net interest } & 500 \
\hline \text { Non-durable goods } & 2000 \
\hline \text { Non-farm income } & 700 \
\hline \text { Proprietors' income } & 1000 \
\hline \text { Rental income } & 100 \
\hline \text { Services } & 4000\
\hline 
\end{array}$
 
-Use the information in Exhibit 11.3 to compute personal consumption expenditures. Which of the following is correct?

Accepted Answer

A)  $6750 billion. 
B)  $6600 billion. 
C)  $6550 billion. 
D)  $6100 billion. 
A)  $6750 billion. 
B)  $6600 billion. 
C)  $6550 billion. 
D)  $6100 billion.

In recent years, people have benefited from greater amounts of leisure time. This trend:

Which of the following would not be included in the gross private domestic investment (I) category of GDP?

The GDP implicit price deflator is:

The expenditure approach for the calculation of GDP includes spending on:

Domestic factor income (DFI) is equal to:

Exports are a domestic spending for foreign products.

If a woman marries her hired helper and keeps hiring him to do housework, the value of GDP:

Which of the following is a shortcoming of GDP?

Which of the following would not be included in the measurement of GDP?

Net domestic product is equal to GDP minus:

GDP counts only:

If a firm finds that it has a larger stock of inventory at the end of the period than it had at the start, the difference would be:

Which of the following increases GDP?

Net disposable income (NDI) is equal to:

Net national product is:

Net domestic product (NDP) is equal to gross domestic product (GDP) plus indirect business taxes.

Which of the following expenditures would be included in GDP for this year?

The circular flow model shows the flow of:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

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Exam 12: Measuring the Size of the Economy

In recent years, people have benefited from greater amounts of leisure time. This trend:

Which of the following would not be included in the gross private domestic investment (I) category of GDP?

The GDP implicit price deflator is:

The expenditure approach for the calculation of GDP includes spending on:

Domestic factor income (DFI) is equal to:

Exports are a domestic spending for foreign products.

If a woman marries her hired helper and keeps hiring him to do housework, the value of GDP:

Which of the following is a shortcoming of GDP?

Which of the following would not be included in the measurement of GDP?

Net domestic product is equal to GDP minus:

GDP counts only:

If a firm finds that it has a larger stock of inventory at the end of the period than it had at the start, the difference would be:

Which of the following increases GDP?

Net disposable income (NDI) is equal to:

Net national product is:

Net domestic product (NDP) is equal to gross domestic product (GDP) plus indirect business taxes.

Which of the following expenditures would be included in GDP for this year?

The circular flow model shows the flow of:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters