Question 1

(The following national income statistics are in billions of dollars.)   Refer to the above data. Personal income is:

Accepted Answer

A)  $483 billion 
B)  $376 billion 
C)  $372 billion 
D)  $317 billion 
A)  $483 billion 
B)  $376 billion 
C)  $372 billion 
D)  $317 billion

Question 2

Consider the following data for a firm over a period of time. The contribution of the firm to domestic output by the value-added method is:

Accepted Answer

A)  $5,000 
B)  $40,000 
C)  $45,000 
D)  $50,000 
A)  $5,000 
B)  $40,000 
C)  $45,000 
D)  $50,000

Question 3

Nominal GDP differs from real GDP because:

Accepted Answer

A)  Nominal GDP is based on constant prices 
B)  Real GDP is based on current prices 
C)  Real GDP results from adjusting for changes in the price level 
D)  Nominal GDP results from adjusting for changes in the price level 
A)  Nominal GDP is based on constant prices 
B)  Real GDP is based on current prices 
C)  Real GDP results from adjusting for changes in the price level 
D)  Nominal GDP results from adjusting for changes in the price level

Question 4

GDP measured using current prices is called:

Accepted Answer

A)  Nominal GDP 
B)  Real GDP 
C)  Constant GDP 
D)  Deflated GDP 
A)  Nominal GDP 
B)  Real GDP 
C)  Constant GDP 
D)  Deflated GDP

Question 5

"Net foreign factor income" in the national income accounts refers to the difference between:

Accepted Answer

A)  The income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S. 
B)  The value of products sold by Americans to other nations and the value of products bought by Americans from other nations 
C)  The value of investments that Americans made abroad and the value of investments made by foreigners in the U.S. 
D)  The income earned by Americans in the U.S. minus the income earned by foreigners in the U.S. 
A)  The income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S. 
B)  The value of products sold by Americans to other nations and the value of products bought by Americans from other nations 
C)  The value of investments that Americans made abroad and the value of investments made by foreigners in the U.S. 
D)  The income earned by Americans in the U.S. minus the income earned by foreigners in the U.S.

Question 6

Adding the market value of all final and intermediate goods and services in an economy in a given year would result in:

Accepted Answer

A)  The calculation of GDP for that year 
B)  The calculation of NDP for that year 
C)  An amount less than GDP for that year 
D)  An amount greater than GDP for that year 
A)  The calculation of GDP for that year 
B)  The calculation of NDP for that year 
C)  An amount less than GDP for that year 
D)  An amount greater than GDP for that year

Question 7

If real GDP in a year was $3,668 billion and the price index was 112, then nominal GDP in that year was approximately:

Accepted Answer

A)  $3,846 billion 
B)  $3,925 billion 
C)  $4,108 billion 
D)  $4,379 billion 
A)  $3,846 billion 
B)  $3,925 billion 
C)  $4,108 billion 
D)  $4,379 billion

Question 8

(The following national income data for an economy are in billions of dollars.)   Refer to the above data. The expenditures approach to GDP calculation can be done by adding:

Accepted Answer

A)  1 through 7 
B)  2 through 7 
C)  8 through 11 
D)  8 through 13 
A)  1 through 7 
B)  2 through 7 
C)  8 through 11 
D)  8 through 13

Question 9

The following are incomes earned but not received by the nation's households, except:

Accepted Answer

A)  Corporate income taxes 
B)  Social security contribution 
C)  Transfer payments 
D)  Undistributed corporate profits 
A)  Corporate income taxes 
B)  Social security contribution 
C)  Transfer payments 
D)  Undistributed corporate profits

Question 10

Value added by a firm is the market value of the firm's output minus the:

Accepted Answer

A)  Total wages paid to its employees 
B)  Value of inputs bought from other firms 
C)  Profits that the firm's owners earn 
D)  Total costs of all inputs used 
A)  Total wages paid to its employees 
B)  Value of inputs bought from other firms 
C)  Profits that the firm's owners earn 
D)  Total costs of all inputs used

Question 11

Refer to the above table. If output increases by 8% from Year 5 to Year 6, then in that period:

Accepted Answer

A)  Real GDP will rise faster than nominal GDP 
B)  Real GDP will rise slower than nominal GDP 
C)  Nominal GDP will decrease 
D)  Real GDP will decrease 
A)  Real GDP will rise faster than nominal GDP 
B)  Real GDP will rise slower than nominal GDP 
C)  Nominal GDP will decrease 
D)  Real GDP will decrease

Question 12

Gross private domestic investment can be divided into replacement investment and net investment.

Accepted Answer

A) True 
 B)False

Question 13

In the expenditures approach of national income accounting, C, Ig, and G include expenditures for:

Accepted Answer

A)  Domestically produced goods and services only 
B)  Domestically produced as well as imported goods and services 
C)  Exported goods and services 
D)  The private sector of the economy only 
A)  Domestically produced goods and services only 
B)  Domestically produced as well as imported goods and services 
C)  Exported goods and services 
D)  The private sector of the economy only

Question 14

The gross domestic product (GDP) concept accounts for society's valuation of the relative worth of goods and services by using:

Accepted Answer

A)  A measure of physical weight 
B)  A measure of volume 
C)  A utility measure 
D)  A monetary measure 
A)  A measure of physical weight 
B)  A measure of volume 
C)  A utility measure 
D)  A monetary measure

Question 15

(The following national income data for an economy are in billions of dollars.)   Refer to the above data. Net exports are equal to:

Accepted Answer

A)  -$155 billion 
B)  $288 billion 
C)  -$424 billion 
D)  $1483 billion 
A)  -$155 billion 
B)  $288 billion 
C)  -$424 billion 
D)  $1483 billion

Question 16

Personal income will equal disposable income when:

Accepted Answer

A)  Corporate profits are zero 
B)  Personal taxes are zero 
C)  Transfer payments are zero 
D)  Social Security contributions are zero 
A)  Corporate profits are zero 
B)  Personal taxes are zero 
C)  Transfer payments are zero 
D)  Social Security contributions are zero

Question 17

(The following national income statistics are in billions of dollars.)   Refer to the above data. Net domestic product is:

Accepted Answer

A)  $400 billion 
B)  $442 billion 
C)  $483 billion 
D)  $517 billion 
A)  $400 billion 
B)  $442 billion 
C)  $483 billion 
D)  $517 billion

Question 18

If gross investment is positive, it means that firm (or the economy) is must be expanding.

Accepted Answer

A) True 
 B)False

Question 19

The consumption of fixed capital in each year's production is called:

Accepted Answer

A)  Indirect business taxes 
B)  Inventory reduction 
C)  Depreciation 
D)  Net investment 
A)  Indirect business taxes 
B)  Inventory reduction 
C)  Depreciation 
D)  Net investment

Question 20

Gross domestic private investment, as defined in national income accounts, would include the following, except:

Accepted Answer

A)  Changes to business inventories 
B)  All domestic construction done by the private sector 
C)  Government construction of new highways and dams 
D)  The value of all capital goods bought by business firms 
A)  Changes to business inventories 
B)  All domestic construction done by the private sector 
C)  Government construction of new highways and dams 
D)  The value of all capital goods bought by business firms

Exam 7: Measuring Domestic Output and National Income

(The following national income statistics are in billions of dollars.) Refer to the above data. Personal income is:

Consider the following data for a firm over a period of time. The contribution of the firm to domestic output by the value-added method is:

Nominal GDP differs from real GDP because:

GDP measured using current prices is called:

"Net foreign factor income" in the national income accounts refers to the difference between:

Adding the market value of all final and intermediate goods and services in an economy in a given year would result in:

If real GDP in a year was $3,668 billion and the price index was 112, then nominal GDP in that year was approximately:

(The following national income data for an economy are in billions of dollars.) Refer to the above data. The expenditures approach to GDP calculation can be done by adding:

The following are incomes earned but not received by the nation's households, except:

Value added by a firm is the market value of the firm's output minus the:

Refer to the above table. If output increases by 8% from Year 5 to Year 6, then in that period:

Gross private domestic investment can be divided into replacement investment and net investment.

In the expenditures approach of national income accounting, C, Ig, and G include expenditures for:

The gross domestic product (GDP) concept accounts for society's valuation of the relative worth of goods and services by using:

(The following national income data for an economy are in billions of dollars.) Refer to the above data. Net exports are equal to:

Personal income will equal disposable income when:

(The following national income statistics are in billions of dollars.) Refer to the above data. Net domestic product is:

If gross investment is positive, it means that firm (or the economy) is must be expanding.

The consumption of fixed capital in each year's production is called:

Gross domestic private investment, as defined in national income accounts, would include the following, except:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

In the expenditures approach of national income accounting, C, I_g, and G include expenditures for: