Question 1

Transfer payments are subtracted from national income to get to personal income.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided in Table 6.4 below to answer the questions that follow.
Table 6.4
  
-Refer to Table 6.4.The value for personal income in billions of dollars is

Accepted Answer

A) 870. 
B) 890. 
C) 950. 
D) 960. 
A) 870. 
B) 890. 
C) 950. 
D) 960.

Question 3

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

Accepted Answer

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

Question 4

Double counting can be avoided by

Accepted Answer

A) including the value of intermediate goods in the current year. 
B) not counting the value of intermediate goods in GDP. 
C) including the value of intermediate goods in the GNP but not in the GDP. 
D) including the value of intermediate goods in the production year but not in the selling year of those goods. 
A) including the value of intermediate goods in the current year. 
B) not counting the value of intermediate goods in GDP. 
C) including the value of intermediate goods in the GNP but not in the GDP. 
D) including the value of intermediate goods in the production year but not in the selling year of those goods.

Question 5

If GDP is $500 billion and depreciation is $40 billion,then net national product

Accepted Answer

A) is $460 billion. 
B) is $500 billion. 
C) is $540 billion. 
D) cannot be determined from this information. 
A) is $460 billion. 
B) is $500 billion. 
C) is $540 billion. 
D) cannot be determined from this information.

Question 6

If nominal GDP is $8 trillion and real GDP is $6 trillion,the GDP deflator is

Accepted Answer

A) 48. 
B) 75. 
C) 133.33. 
D) 480. 
A) 48. 
B) 75. 
C) 133.33. 
D) 480.

Question 7

If net investment is zero,then

Accepted Answer

A) gross investment is greater than depreciation. 
B) gross investment is less than depreciation. 
C) gross investment equals depreciation. 
D) depreciation is zero. 
A) gross investment is greater than depreciation. 
B) gross investment is less than depreciation. 
C) gross investment equals depreciation. 
D) depreciation is zero.

Question 8

Related to the Economics in Practice on p.427: If a Swiss dealer sells a newly produced Swiss watch on eBay to a U.S.customer,the value of the watch is

Accepted Answer

A) counted in U.S.GDP. 
B) counted in U.S.GDP and Swiss GDP. 
C) counted in Swiss GDP. 
D) not counted in either U.S.or Swiss GDP. 
A) counted in U.S.GDP. 
B) counted in U.S.GDP and Swiss GDP. 
C) counted in Swiss GDP. 
D) not counted in either U.S.or Swiss GDP.

Question 9

In 2012 final sales equal $350 billion and the change in business inventories is -$60 billion.GDP in 2012

Accepted Answer

A) is $290 billion. 
B) is $295 billion. 
C) is $410 billion. 
D) cannot be determined from this information. 
A) is $290 billion. 
B) is $295 billion. 
C) is $410 billion. 
D) cannot be determined from this information.

Question 10

Gross national product is the total market value of

Accepted Answer

A) all final and intermediate goods and service produced by resources owned by a country in a given year. 
B) all final and intermediate goods and services produced in a country,regardless of who owns the resources. 
C) all final goods and services produced in a country in a given year,regardless of who owns the resources. 
D) all final goods and services produced by resources owned by a country,regardless of where production takes place. 
A) all final and intermediate goods and service produced by resources owned by a country in a given year. 
B) all final and intermediate goods and services produced in a country,regardless of who owns the resources. 
C) all final goods and services produced in a country in a given year,regardless of who owns the resources. 
D) all final goods and services produced by resources owned by a country,regardless of where production takes place.

Question 11

Refer to the information provided in Table 6.4 below to answer the questions that follow.
Table 6.4
  
-Refer to Table 6.4.The value for GNP in billions of dollars is

Accepted Answer

A) 900. 
B) 930. 
C) 980. 
D) 1,010. 
A) 900. 
B) 930. 
C) 980. 
D) 1,010.

Question 12

GDP measures the total income of everyone and the total spending by everyone in the economy.

Accepted Answer

A) True 
 B)False

Question 13

A GDP deflator is real GDP divided by nominal GDP times 100.

Accepted Answer

A) True 
 B)False

Question 14

If GNP is $600 billion,receipts of factor income from the rest of the world are $50 billion,and payments of factor income to the rest of the world are $30 billion,then GDP is

Accepted Answer

A) $520 billion. 
B) $580 billion. 
C) $620 billion. 
D) $680 billion. 
A) $520 billion. 
B) $580 billion. 
C) $620 billion. 
D) $680 billion.

Question 15

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1
  
-Refer to Table 6.1.Personal consumption expenditures in billions of dollars are

Accepted Answer

A) 1,000. 
B) 1,300. 
C) 1,500. 
D) 2,000. 
A) 1,000. 
B) 1,300. 
C) 1,500. 
D) 2,000.

Question 16

If GNP is $800 billion and depreciation is $90 billion,then net national product is

Accepted Answer

A) $710 billion. 
B) $845 billion. 
C) $890 billion. 
D) $980 billion. 
A) $710 billion. 
B) $845 billion. 
C) $890 billion. 
D) $980 billion.

Question 17

If real GDP rises,then so must nominal GDP.

Accepted Answer

A) True 
 B)False

Question 18

The total income of households is

Accepted Answer

A) net national product. 
B) personal income. 
C) national income. 
D) production income. 
A) net national product. 
B) personal income. 
C) national income. 
D) production income.

Question 19

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 3 is

Accepted Answer

A) $204. 
B) $222. 
C) $250. 
D) $270. 
A) $204. 
B) $222. 
C) $250. 
D) $270.

Question 20

Stock market transactions are part of GNP.

Accepted Answer

A) True 
 B)False

Exam 6: Measuring National Output and National Income

Transfer payments are subtracted from national income to get to personal income.

Refer to the information provided in Table 6.4 below to answer the questions that follow. Table 6.4 -Refer to Table 6.4.The value for personal income in billions of dollars is

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

Double counting can be avoided by

If GDP is $500 billion and depreciation is $40 billion,then net national product

If nominal GDP is $8 trillion and real GDP is $6 trillion,the GDP deflator is

If net investment is zero,then

Related to the Economics in Practice on p.427: If a Swiss dealer sells a newly produced Swiss watch on eBay to a U.S.customer,the value of the watch is

In 2012 final sales equal $350 billion and the change in business inventories is -$60 billion.GDP in 2012

Gross national product is the total market value of

Refer to the information provided in Table 6.4 below to answer the questions that follow. Table 6.4 -Refer to Table 6.4.The value for GNP in billions of dollars is

GDP measures the total income of everyone and the total spending by everyone in the economy.

A GDP deflator is real GDP divided by nominal GDP times 100.

If GNP is $600 billion,receipts of factor income from the rest of the world are $50 billion,and payments of factor income to the rest of the world are $30 billion,then GDP is

Refer to the information provided in Table 6.1 below to answer the questions that follow. Table 6.1 -Refer to Table 6.1.Personal consumption expenditures in billions of dollars are

If GNP is $800 billion and depreciation is $90 billion,then net national product is

If real GDP rises,then so must nominal GDP.

The total income of households 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 3 is

Stock market transactions are part of GNP.

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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