Question 1

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 services 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 services 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 2

Figure 12.1  
-The movement from A to B to C in Figure 12.1 illustrates

Accepted Answer

A)  an improvement in technology. 
B)  a decline in capital per worker. 
C)  diminishing returns to capital. 
D)  diminishing returns to labour. 
A)  an improvement in technology. 
B)  a decline in capital per worker. 
C)  diminishing returns to capital. 
D)  diminishing returns to labour.

Question 3

Macroeconomics is the study of how households maximise their satisfaction and firms allocate resources to maximise profits.

Accepted Answer

A) True 
 B)False

Question 4

The GDP deflator only measures the prices of the consumer and investment components of GDP,and does not include the prices of government goods and services.

Accepted Answer

A) True 
 B)False

Question 5

Government spending on transfer payments is included in government purchases when calculating GDP,because it results in the production of new goods and services.

Accepted Answer

A) True 
 B)False

Question 6

An economic growth model explains changes in

Accepted Answer

A)  nominal GDP per capita in the long run. 
B)  real GDP per capita in the long run. 
C)  nominal GDP per capita in the short run. 
D)  real GDP per capita in the short run. 
A)  nominal GDP per capita in the long run. 
B)  real GDP per capita in the long run. 
C)  nominal GDP per capita in the short run. 
D)  real GDP per capita in the short run.

Question 7

Labour productivity is the quantity of

Accepted Answer

A)  output that can be produced in one hour by several workers. 
B)  labour produced in one hour in an economy. 
C)  output produced in one hour by one worker. 
D)  output produced in one hour by one machine. 
A)  output that can be produced in one hour by several workers. 
B)  labour produced in one hour in an economy. 
C)  output produced in one hour by one worker. 
D)  output produced in one hour by one machine.

Question 8

What is the gross domestic product of a country?

Accepted Answer

The market value of all final

Question 9

Potential GDP is always greater than real GDP in an economy.

Accepted Answer

A) True 
 B)False

Question 10

Why do individuals and firms sometimes conceal the buying and selling of goods and services from the official measurement of GDP,and what proportion of GDP is this estimated to comprise in Australia?

Accepted Answer

Individuals and firms sometimes conceal

Question 11

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Accepted Answer

A)  knowledge; increasing returns to scale; firm 
B)  physical; decreasing returns to scale; firm 
C)  knowledge; decreasing returns to scale; economy 
D)  knowledge; increasing returns to scale; economy 
A)  knowledge; increasing returns to scale; firm 
B)  physical; decreasing returns to scale; firm 
C)  knowledge; decreasing returns to scale; economy 
D)  knowledge; increasing returns to scale; economy

Question 12

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

Accepted Answer

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

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Nominal GDP is GDP measured in current prices and can be smaller than real GDP.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  exports; foreign countries; Australia 
B)  exports; Australia; Australia 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; Australia 
A)  exports; foreign countries; Australia 
B)  exports; Australia; Australia 
C)  imports; foreign countries; foreign countries 
D)  imports; foreign countries; Australia

Question 16

Economic growth depends more on technological change than on increases in capital per hour worked.

Accepted Answer

A) True 
 B)False

Question 17

Knowledge capital is ________ in production and ________.As a result,firms ________ free ride.

Accepted Answer

A)  non-rival; non-excludable; can 
B)  non-rival; excludable; can 
C)  rival; non-excludable; cannot 
D)  non-rival; non-excludable; cannot 
A)  non-rival; non-excludable; can 
B)  non-rival; excludable; can 
C)  rival; non-excludable; cannot 
D)  non-rival; non-excludable; cannot

Question 18

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

Accepted Answer

A)  Real GDP is falling. 
B)  Incomes are growing at a slower rate than the population. 
C)  Real GDP per capita is rising. 
D)  Living standards are falling. 
A)  Real GDP is falling. 
B)  Incomes are growing at a slower rate than the population. 
C)  Real GDP per capita is rising. 
D)  Living standards are falling.

Question 19

In a small economy,gross investment in 2012 is $1500,consumption spending is $6000,net investment is $200,government spending is $1500,exports are $2000 and imports are $1000.What is GDP for this economy in 2012?

Accepted Answer

A)  $10 700 
B)  $10 300 
C)  $10 200 
D)  $10 000 
A)  $10 700 
B)  $10 300 
C)  $10 200 
D)  $10 000

Question 20

What is 'potential GDP'?

Accepted Answer

Potential GDP is the level of

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

Figure 12.1 -The movement from A to B to C in Figure 12.1 illustrates

Macroeconomics is the study of how households maximise their satisfaction and firms allocate resources to maximise profits.

The GDP deflator only measures the prices of the consumer and investment components of GDP,and does not include the prices of government goods and services.

Government spending on transfer payments is included in government purchases when calculating GDP,because it results in the production of new goods and services.

An economic growth model explains changes in

Labour productivity is the quantity of

What is the gross domestic product of a country?

Potential GDP is always greater than real GDP in an economy.

Why do individuals and firms sometimes conceal the buying and selling of goods and services from the official measurement of GDP,and what proportion of GDP is this estimated to comprise in Australia?

New growth theory states that increases in capital will result in at the level.

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

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

Nominal GDP is GDP measured in current prices and can be smaller than real GDP.

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

Economic growth depends more on technological change than on increases in capital per hour worked.

Knowledge capital is in production and .As a result,firms free ride.

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

In a small economy,gross investment in 2012 is $1500,consumption spending is $6000,net investment is $200,government spending is $1500,exports are $2000 and imports are $1000.What is GDP for this economy in 2012?

What is 'potential GDP'?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 12: GDP: Measuring Total Production and Income

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

Figure 12.1 -The movement from A to B to C in Figure 12.1 illustrates

Macroeconomics is the study of how households maximise their satisfaction and firms allocate resources to maximise profits.

The GDP deflator only measures the prices of the consumer and investment components of GDP,and does not include the prices of government goods and services.

Government spending on transfer payments is included in government purchases when calculating GDP,because it results in the production of new goods and services.

An economic growth model explains changes in

Labour productivity is the quantity of

What is the gross domestic product of a country?

Potential GDP is always greater than real GDP in an economy.

Why do individuals and firms sometimes conceal the buying and selling of goods and services from the official measurement of GDP,and what proportion of GDP is this estimated to comprise in Australia?

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

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

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

Nominal GDP is GDP measured in current prices and can be smaller than real GDP.

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

Economic growth depends more on technological change than on increases in capital per hour worked.

Knowledge capital is ________ in production and ________.As a result,firms ________ free ride.

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

In a small economy,gross investment in 2012 is $1500,consumption spending is $6000,net investment is $200,government spending is $1500,exports are $2000 and imports are $1000.What is GDP for this economy in 2012?

What is 'potential GDP'?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

New growth theory states that increases in capital will result in at the level.

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

Knowledge capital is in production and .As a result,firms free ride.