Question 1

New houses count as consumer durables.

Accepted Answer

A) True 
 B)False

Question 2

The GDP deflator is the

Accepted Answer

A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP multiplied by 100. 
C) ratio of nominal GDP to real GDP multiplied by 100. 
D) ratio of real GDP to nominal GDP multiplied by 100. 
A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP multiplied by 100. 
C) ratio of nominal GDP to real GDP multiplied by 100. 
D) ratio of real GDP to nominal GDP multiplied by 100.

Question 3

GDP is not a perfect measure of social welfare and the society's economic well-being because

Accepted Answer

A) it does not say anything about the distribution of income. 
B) GDP accounting rules do not adjust for production that causes negative externalities. 
C) it does not include all economic activities in the economy. 
D) all of the above 
A) it does not say anything about the distribution of income. 
B) GDP accounting rules do not adjust for production that causes negative externalities. 
C) it does not include all economic activities in the economy. 
D) all of the above

Question 4

The GDP deflator in year 2 is 95 using year 1 as a base year.This means that,on average,the price of goods and services is

Accepted Answer

A) 105% higher in year 2 than in year 1. 
B) 5% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2. 
A) 105% higher in year 2 than in year 1. 
B) 5% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2.

Question 5

Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.

Accepted Answer

A) True 
 B)False

Question 6

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5
  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 2 is

Accepted Answer

A) 93.9. 
B) 100. 
C) 106.5. 
D) 179. 
A) 93.9. 
B) 100. 
C) 106.5. 
D) 179.

Question 7

The GDP deflator in year 2 is 110 using year 1 as a base year.This means that,on average,the price of goods and services is

Accepted Answer

A) 110% higher in year 2 than in year 1. 
B) 10% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 110% higher in year 1 than in year 2. 
A) 110% higher in year 2 than in year 1. 
B) 10% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 110% higher in year 1 than in year 2.

Question 8

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5
  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.The value for this economy's nominal GDP in year 1 is

Accepted Answer

A) $140. 
B) $160. 
C) $180. 
D) $200. 
A) $140. 
B) $160. 
C) $180. 
D) $200.

Question 9

If real GDP in 2012 using 2011 prices is lower than nominal GDP of 2012,then

Accepted Answer

A) prices in 2012 are lower than prices in 2011. 
B) nominal GDP in 2012 equals nominal GDP in 2011. 
C) prices in 2012 are higher than prices in 2011. 
D) real GDP in 2012 is larger than real GDP in 2011. 
A) prices in 2012 are lower than prices in 2011. 
B) nominal GDP in 2012 equals nominal GDP in 2011. 
C) prices in 2012 are higher than prices in 2011. 
D) real GDP in 2012 is larger than real GDP in 2011.

Question 10

If GNP is $200 billion and depreciation is $20 billion,then net national product is

Accepted Answer

A) $100 billion. 
B) $180 billion. 
C) $210 billion. 
D) $220 billion. 
A) $100 billion. 
B) $180 billion. 
C) $210 billion. 
D) $220 billion.

Question 11

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5
  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 1 is

Accepted Answer

A) 1. 
B) 100. 
C) 110. 
D) 111. 
A) 1. 
B) 100. 
C) 110. 
D) 111.

Question 12

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5
  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's real GDP in year 2 is

Accepted Answer

A) $168. 
B) $179. 
C) $202. 
D) $214. 
A) $168. 
B) $179. 
C) $202. 
D) $214.

Question 13

A company produced 8 dishwasher machines in 2012.The company sold 6 in 2012 and added 2 to its inventories.The market value of the dishwasher machines in 2012 was $200 per unit.What is the value of this company's output that will be included in the 2012 GDP?

Accepted Answer

A) $400. 
B) $1,400. 
C) $1,600. 
D) $2,000. 
A) $400. 
B) $1,400. 
C) $1,600. 
D) $2,000.

Question 14

Exports equal

Accepted Answer

A) imports - net exports. 
B) net exports + imports. 
C) net exports - imports. 
D) imports + (exports + imports). 
A) imports - net exports. 
B) net exports + imports. 
C) net exports - imports. 
D) imports + (exports + imports).

Question 15

If gross investment in 2013 is $200 billion and depreciation in 2013 is $1,000 billion,net investment in 2013 is

Accepted Answer

A) -$900 billion. 
B) -$800 billion. 
C) $1,000 billion. 
D) $1,200 billion. 
A) -$900 billion. 
B) -$800 billion. 
C) $1,000 billion. 
D) $1,200 billion.

Question 16

If the change in business inventories is zero,then final sales are

Accepted Answer

A) zero. 
B) less than GDP. 
C) greater than GDP. 
D) equal to GDP. 
A) zero. 
B) less than GDP. 
C) greater than GDP. 
D) equal to GDP.

Question 17

Refer to the information provided in Table 6.2 below to answer the questions that follow.
Table 6.2
  
-Refer to Table 6.2.The value of government spending in billions of dollars is

Accepted Answer

A) 200. 
B) 600. 
C) 800. 
D) 1,000. 
A) 200. 
B) 600. 
C) 800. 
D) 1,000.

Question 18

All economic activities in the economy are included in the GDP.

Accepted Answer

A) True 
 B)False

Question 19

If gross investment in 2012 is $750 billion and depreciation in 2012 is $850 billion,net investment in 2012 is

Accepted Answer

A) -$50 billion. 
B) -$100 billion. 
C) -$800 billion. 
D) -$1,600 billion. 
A) -$50 billion. 
B) -$100 billion. 
C) -$800 billion. 
D) -$1,600 billion.

Question 20

If investment is larger than depreciation,the capital stock decreases.

Accepted Answer

A) True 
 B)False

Exam 6: Measuring National Output and National Income

New houses count as consumer durables.

The GDP deflator is the

GDP is not a perfect measure of social welfare and the society's economic well-being because

The GDP deflator in year 2 is 95 using year 1 as a base year.This means that,on average,the price of goods and services is

Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 2 is

The GDP deflator in year 2 is 110 using year 1 as a base year.This means that,on average,the price of goods and services is

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.The value for this economy's nominal GDP in year 1 is

If real GDP in 2012 using 2011 prices is lower than nominal GDP of 2012,then

If GNP is $200 billion and depreciation is $20 billion,then net national product is

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 1 is

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's real GDP in year 2 is

A company produced 8 dishwasher machines in 2012.The company sold 6 in 2012 and added 2 to its inventories.The market value of the dishwasher machines in 2012 was $200 per unit.What is the value of this company's output that will be included in the 2012 GDP?

Exports equal

If gross investment in 2013 is $200 billion and depreciation in 2013 is $1,000 billion,net investment in 2013 is

If the change in business inventories is zero,then final sales are

Refer to the information provided in Table 6.2 below to answer the questions that follow. Table 6.2 -Refer to Table 6.2.The value of government spending in billions of dollars is

All economic activities in the economy are included in the GDP.

If gross investment in 2012 is $750 billion and depreciation in 2012 is $850 billion,net investment in 2012 is

If investment is larger than depreciation,the capital stock decreases.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

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