Question 1

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)  Both years. 
D)  2013 real GDP; 2014 nominal GDP. 
A)  2013. 
B)  2014. 
C)  Both years. 
D)  2013 real GDP; 2014 nominal GDP.

Question 2

In the equation GDP = C + I + G + NX,the G component refers to

Accepted Answer

A)  federal government expenditures plus all transfer payments. 
B)  the taxes and expenditure of all levels of government. 
C)  federal government expenditures on transfer payments, such as pensions and unemployment benefits. 
D)  the purchases of final goods and services by all levels of government, excluding transfer payments. 
A)  federal government expenditures plus all transfer payments. 
B)  the taxes and expenditure of all levels of government. 
C)  federal government expenditures on transfer payments, such as pensions and unemployment benefits. 
D)  the purchases of final goods and services by all levels of government, excluding transfer payments.

Question 3

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Accepted Answer

A)  GNI; real GDP; nominal GDP 
B)  GDP deflator; real GDP; nominal GDP 
C)  GDP deflator; nominal GDP; real GDP 
D)  GNI; nominal GDP; real GDP 
A)  GNI; real GDP; nominal GDP 
B)  GDP deflator; real GDP; nominal GDP 
C)  GDP deflator; nominal GDP; real GDP 
D)  GNI; nominal GDP; real GDP

Question 4

Government spending ________ is included in gross domestic product.

Accepted Answer

A)  at federal, state and local levels of government 
B)  at the federal level of government only 
C)  at state and local levels of government only 
D)  on defence goods only 
A)  at federal, state and local levels of government 
B)  at the federal level of government only 
C)  at state and local levels of government only 
D)  on defence goods only

Question 5

Figure 12.1  
-Which of the following combination of points illustrates the changes in the Soviet Union's economy from 1950-1980,as illustrated in Figure 12.1?

Accepted Answer

A)  E to B 
B)  B to D 
C)  B to E 
D)  A to B to C 
A)  E to B 
B)  B to D 
C)  B to E 
D)  A to B to C

Question 6

Long-run economic growth

Accepted Answer

A)  is due to increases in capital productivity rather than labour productivity. 
B)  does not usually occur due to the economic recessions that occur as part of the business cycle. 
C)  depends more on increases in capital per hour worked than on technological change. 
D)  depends more on technological change than on increases in capital per hour worked. 
A)  is due to increases in capital productivity rather than labour productivity. 
B)  does not usually occur due to the economic recessions that occur as part of the business cycle. 
C)  depends more on increases in capital per hour worked than on technological change. 
D)  depends more on technological change than on increases in capital per hour worked.

Question 7

Potential GDP in Australia

Accepted Answer

A)  does not change much over time. 
B)  grows as the economy grows. 
C)  changes over the business cycle. 
D)  declines over time. 
A)  does not change much over time. 
B)  grows as the economy grows. 
C)  changes over the business cycle. 
D)  declines over time.

Question 8

'Nominal GDP' is another term for

Accepted Answer

A)  inflation-adjusted GDP. 
B)  real GDP. 
C)  constant-dollar GDP. 
D)  current-dollar GDP. 
A)  inflation-adjusted GDP. 
B)  real GDP. 
C)  constant-dollar GDP. 
D)  current-dollar GDP.

Question 9

The three main methods of measuring GDP are the

Accepted Answer

A)  multiplier method, the production method, and the expenditure method. 
B)  goods and services method, the production method, and the expenditure method. 
C)  income method, the production method, and the expenditure method. 
D)  consumption method, the savings method, and the investment method. 
A)  multiplier method, the production method, and the expenditure method. 
B)  goods and services method, the production method, and the expenditure method. 
C)  income method, the production method, and the expenditure method. 
D)  consumption method, the savings method, and the investment method.

Question 10

If nominal GDP rises,we can say that

Accepted Answer

A)  production has risen and prices remain constant. 
B)  prices have risen and production remains constant. 
C)  production has risen, or prices have risen, or both have risen. 
D)  production has fallen and prices have risen. 
A)  production has risen and prices remain constant. 
B)  prices have risen and production remains constant. 
C)  production has risen, or prices have risen, or both have risen. 
D)  production has fallen and prices have risen.

Question 11

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

Accepted Answer

The rule of 70 is a calculation that tel

Question 12

Refer to Table 12.1 for the following questions.
Table 12.1 A very simple economy producing three goods: movies, burgers and bikes.  
-Refer to Table 12.1.What is nominal GDP in 2013?

Accepted Answer

A)  $3320 
B)  $3690 
C)  $6360 
D)  $7035 
A)  $3320 
B)  $3690 
C)  $6360 
D)  $7035

Question 13

Figure 12.1  
-In Figure 12.1,more capital per hour worked is shown by the movement from

Accepted Answer

A)  B to D. 
B)  A to B. 
C)  B to E. 
D)  B to A. 
A)  B to D. 
B)  A to B. 
C)  B to E. 
D)  B to A.

Question 14

The measure of production that values production using current prices is called

Accepted Answer

A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground economy GDP. 
A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground economy GDP.

Question 15

If GDP is currently $13 trillion and is growing at a rate of 2.3 per cent per year,how long will it take GDP to reach $26 trillion?

Accepted Answer

A)  About 15 years 
B)  About 17 years 
C)  About 25 years 
D)  About 30 years 
A)  About 15 years 
B)  About 17 years 
C)  About 25 years 
D)  About 30 years

Question 16

New growth theory

Accepted Answer

A)  states that the rate of technological change is determined outside the working of the market system. 
B)  does not adequately explain the factors that determine productivity. 
C)  states that the rate of technological change is caused by economic incentives. 
D)  states that the rate of technological change is unaffected by economic incentives. 
A)  states that the rate of technological change is determined outside the working of the market system. 
B)  does not adequately explain the factors that determine productivity. 
C)  states that the rate of technological change is caused by economic incentives. 
D)  states that the rate of technological change is unaffected by economic incentives.

Question 17

If GDP grew 3 per cent in 2010,2.2 per cent in 2011 and 2.5 per cent in 2012,then what is the average annual growth rate over this period?

Accepted Answer

A)  5 per cent 
B)  2.6 per cent 
C)  4 per cent 
D)  -2.2 per cent 
A)  5 per cent 
B)  2.6 per cent 
C)  4 per cent 
D)  -2.2 per cent

Question 18

The economic growth rate between 2012 and 2013 is calculated by

Accepted Answer

A)  the change in real GDP between the two years divided by real GDP in 2012, multiplied by 100. 
B)  real GDP in 2013 minus real GDP in 2012, multiplied by 100. 
C)  the change in real GDP between the two years divided by real GDP in 2013, multiplied by 100. 
D)  real GDP in 2013 plus real GDP in 2012, divided by 2, and multiplied by 100. 
A)  the change in real GDP between the two years divided by real GDP in 2012, multiplied by 100. 
B)  real GDP in 2013 minus real GDP in 2012, multiplied by 100. 
C)  the change in real GDP between the two years divided by real GDP in 2013, multiplied by 100. 
D)  real GDP in 2013 plus real GDP in 2012, divided by 2, and multiplied by 100.

Question 19

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

Accepted Answer

A) True 
 B)False

Question 20

A company named Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Accepted Answer

A)  The sale of a used door to a homeowner. 
B)  The sale of a new door to a homeowner. 
C)  The sale of a used door for installation into a new home. 
D)  The sale of a new door for installation into a new home. 
A)  The sale of a used door to a homeowner. 
B)  The sale of a new door to a homeowner. 
C)  The sale of a used door for installation into a new home. 
D)  The sale of a new door for installation into a new home.

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?

In the equation GDP = C + I + G + NX,the G component refers to

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

Government spending ________ is included in gross domestic product.

Figure 12.1 -Which of the following combination of points illustrates the changes in the Soviet Union's economy from 1950-1980,as illustrated in Figure 12.1?

Long-run economic growth

Potential GDP in Australia

'Nominal GDP' is another term for

The three main methods of measuring GDP are the

If nominal GDP rises,we can say that

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

Refer to Table 12.1 for the following questions. Table 12.1 A very simple economy producing three goods: movies, burgers and bikes. -Refer to Table 12.1.What is nominal GDP in 2013?

Figure 12.1 -In Figure 12.1,more capital per hour worked is shown by the movement from

The measure of production that values production using current prices is called

If GDP is currently $13 trillion and is growing at a rate of 2.3 per cent per year,how long will it take GDP to reach $26 trillion?

New growth theory

If GDP grew 3 per cent in 2010,2.2 per cent in 2011 and 2.5 per cent in 2012,then what is the average annual growth rate over this period?

The economic growth rate between 2012 and 2013 is calculated by

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

A company named Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in 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

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?

In the equation GDP = C + I + G + NX,the G component refers to

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Government spending ________ is included in gross domestic product.

Figure 12.1 -Which of the following combination of points illustrates the changes in the Soviet Union's economy from 1950-1980,as illustrated in Figure 12.1?

Long-run economic growth

Potential GDP in Australia

'Nominal GDP' is another term for

The three main methods of measuring GDP are the

If nominal GDP rises,we can say that

Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.

Refer to Table 12.1 for the following questions. Table 12.1 A very simple economy producing three goods: movies, burgers and bikes. -Refer to Table 12.1.What is nominal GDP in 2013?

Figure 12.1 -In Figure 12.1,more capital per hour worked is shown by the movement from

The measure of production that values production using current prices is called

If GDP is currently $13 trillion and is growing at a rate of 2.3 per cent per year,how long will it take GDP to reach $26 trillion?

New growth theory

If GDP grew 3 per cent in 2010,2.2 per cent in 2011 and 2.5 per cent in 2012,then what is the average annual growth rate over this period?

The economic growth rate between 2012 and 2013 is calculated by

The economic growth rate is calculated as the rate of change in nominal GDP between two time periods.

A company named Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in 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

The is a measure of the price level and is calculated by dividing by and multiplying by 100.