Question 1

In 2009, government purchases was the largest component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following transactions adds to U.S. GDP for 2010?

Accepted Answer

A)  In 2010, Ashley sells a car that she bought in 2006 to William for $5,000. 
B)  An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time. 
C)  When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,600 per month. 
D)  None of the above transactions adds to U.S. GDP for 2010. 
A)  In 2010, Ashley sells a car that she bought in 2006 to William for $5,000. 
B)  An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time. 
C)  When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,600 per month. 
D)  None of the above transactions adds to U.S. GDP for 2010.

Question 3

In the economy of Ukzten in 2010, consumption was $3000, exports were $200, GDP was $8000, government purchases were $1000, and imports were $600. What was Ukzten's investment in 2010?

Accepted Answer

A)  $3200 
B)  $3600 
C)  $3800 
D)  $4400 
A)  $3200 
B)  $3600 
C)  $3800 
D)  $4400

Question 4

U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?

Accepted Answer

Since this is in real terms, it tells us

Question 5

Real GDP per person tells us the income and expenditure of the average person in the economy.

Accepted Answer

A) True 
 B)False

Question 6

Table 5-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.
  
-Refer to Table 5-3. What is the GDP deflator and the inflation rate for 1931?

Accepted Answer

A)  9.16, -11.5 
B)  9.16, -10.3 
C)  1091.37, 10.3 
D)  1091.37, 11.5 
A)  9.16, -11.5 
B)  9.16, -10.3 
C)  1091.37, 10.3 
D)  1091.37, 11.5

Question 7

Disposable personal income is the income that

Accepted Answer

A)  households have left after paying taxes and non-tax payments to the government. 
B)  businesses have left after paying taxes and non-tax payments to the government. 
C)  households and noncorporate businesses have left after paying taxes and non-tax payments to the government. 
D)  households and businesses have left after paying taxes and non-tax payments to the government. 
A)  households have left after paying taxes and non-tax payments to the government. 
B)  businesses have left after paying taxes and non-tax payments to the government. 
C)  households and noncorporate businesses have left after paying taxes and non-tax payments to the government. 
D)  households and businesses have left after paying taxes and non-tax payments to the government.

Question 8

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Accepted Answer

A)  U.S. net exports decrease and U.S. GDP decreases. 
B)  U.S. net exports are unaffected and U.S. GDP decreases. 
C)  U.S. net exports are unaffected and U.S. GDP is unaffected. 
D)  U.S. net exports decrease and U.S. GDP is unaffected. 
A)  U.S. net exports decrease and U.S. GDP decreases. 
B)  U.S. net exports are unaffected and U.S. GDP decreases. 
C)  U.S. net exports are unaffected and U.S. GDP is unaffected. 
D)  U.S. net exports decrease and U.S. GDP is unaffected.

Question 9

The inflation rate is the

Accepted Answer

A)  absolute change in real GDP from one period to another. 
B)  percentage change in real GDP from one period to another. 
C)  absolute change in the price level from one period to another. 
D)  percentage change in the price level from one period to another. 
A)  absolute change in real GDP from one period to another. 
B)  percentage change in real GDP from one period to another. 
C)  absolute change in the price level from one period to another. 
D)  percentage change in the price level from one period to another.

Question 10

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Accepted Answer

A) True 
 B)False

Question 11

Table 5-1
The table below contains data for Bahkan for the year 2010.
  
-Refer to Table 5-1. Gross national product for Bahkan in 2010 is

Accepted Answer

A)  $95. 
B)  $100. 
C)  $110. 
D)  $115. 
A)  $95. 
B)  $100. 
C)  $110. 
D)  $115.

Question 12

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

Accepted Answer

A)  country A's net factor payments from abroad are positive, and its GDP is larger than its GNP. 
B)  country A's net factor payments from abroad are positive, and its GNP is larger than its GDP. 
C)  country A's net factor payments from abroad are negative, and its GDP is larger than its GNP. 
D)  country A's net factor payments from abroad are negative, and its GNP is larger than its GDP. 
A)  country A's net factor payments from abroad are positive, and its GDP is larger than its GNP. 
B)  country A's net factor payments from abroad are positive, and its GNP is larger than its GDP. 
C)  country A's net factor payments from abroad are negative, and its GDP is larger than its GNP. 
D)  country A's net factor payments from abroad are negative, and its GNP is larger than its GDP.

Question 13

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

Accepted Answer

A) True 
 B)False

Question 14

The U.S. government pays an economist at the U.S. Department of Commerce $50,000 in salary in 2006. The economist then retires. In 2007, the government pays him $30,000 in retirement benefits. Which of the following is correct?

Accepted Answer

A)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is included in 2007 GDP as government purchases. 
B)  The 2006 payment is included in 2006 GDP as government purchases, but the 2007 payment is not included in 2007 GDP. 
C)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is included in 2007 GDP as government transfer payments. 
D)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year. 
A)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is included in 2007 GDP as government purchases. 
B)  The 2006 payment is included in 2006 GDP as government purchases, but the 2007 payment is not included in 2007 GDP. 
C)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is included in 2007 GDP as government transfer payments. 
D)  The 2006 payment is included in 2006 GDP as government purchases, and the 2007 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year.

Question 15

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?

Accepted Answer

A)  the first and the second 
B)  the first but not the second 
C)  the second but not the first 
D)  neither the first nor the second 
A)  the first and the second 
B)  the first but not the second 
C)  the second but not the first 
D)  neither the first nor the second

Question 16

The term economists use to describe a situation in which the economy's overall price level is rising is

Accepted Answer

A)  growth. 
B)  inflation. 
C)  recession. 
D)  expansion. 
A)  growth. 
B)  inflation. 
C)  recession. 
D)  expansion.

Question 17

U.S. GDP

Accepted Answer

A)  includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
A)  includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.

Question 18

Table 5-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.
Prices and Quantities
  
-Refer to Table 5-6. In 2011, this country's real GDP was

Accepted Answer

A)  $540. 
B)  $800. 
C)  $930. 
D)  $1380. 
A)  $540. 
B)  $800. 
C)  $930. 
D)  $1380.

Question 19

Which of the following items is included in U.S. GDP?

Accepted Answer

A)  final goods and services that are purchased by the U.S. federal government 
B)  intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period 
C)  goods and services produced by foreign citizens working in the U.S. 
D)  All of the above are included in U.S. GDP. 
A)  final goods and services that are purchased by the U.S. federal government 
B)  intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period 
C)  goods and services produced by foreign citizens working in the U.S. 
D)  All of the above are included in U.S. GDP.

Question 20

Which of the following statements about GDP is correct?

Accepted Answer

A)  GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy's labor force. 
B)  Money continuously flows from households to government and then back to households, and GDP measures this flow of money. 
C)  GDP is to a nation's economy as household income is to a household. 
D)  All of the above are correct. 
A)  GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy's labor force. 
B)  Money continuously flows from households to government and then back to households, and GDP measures this flow of money. 
C)  GDP is to a nation's economy as household income is to a household. 
D)  All of the above are correct.

In 2009, government purchases was the largest component of U.S. GDP.

Which of the following transactions adds to U.S. GDP for 2010?

In the economy of Ukzten in 2010, consumption was $3000, exports were $200, GDP was $8000, government purchases were $1000, and imports were $600. What was Ukzten's investment in 2010?

U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?

Real GDP per person tells us the income and expenditure of the average person in the economy.

Table 5-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 5-3. What is the GDP deflator and the inflation rate for 1931?

Disposable personal income is the income that

If a U.S. citizen buys a television made in Korea by a Korean firm, then

The inflation rate is the

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Gross national product for Bahkan in 2010 is

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

The U.S. government pays an economist at the U.S. Department of Commerce $50,000 in salary in 2006. The economist then retires. In 2007, the government pays him $30,000 in retirement benefits. Which of the following is correct?

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?

The term economists use to describe a situation in which the economy's overall price level is rising is

U.S. GDP

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. In 2011, this country's real GDP was

Which of the following items is included in U.S. GDP?

Which of the following statements about GDP is correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Exam 5: Measuring a Nations Income

In 2009, government purchases was the largest component of U.S. GDP.

Which of the following transactions adds to U.S. GDP for 2010?

In the economy of Ukzten in 2010, consumption was $3000, exports were $200, GDP was $8000, government purchases were $1000, and imports were $600. What was Ukzten's investment in 2010?

U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?

Real GDP per person tells us the income and expenditure of the average person in the economy.

Table 5-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 5-3. What is the GDP deflator and the inflation rate for 1931?

Disposable personal income is the income that

If a U.S. citizen buys a television made in Korea by a Korean firm, then

The inflation rate is the

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Gross national product for Bahkan in 2010 is

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

The U.S. government pays an economist at the U.S. Department of Commerce $50,000 in salary in 2006. The economist then retires. In 2007, the government pays him $30,000 in retirement benefits. Which of the following is correct?

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?

The term economists use to describe a situation in which the economy's overall price level is rising is

U.S. GDP

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. In 2011, this country's real GDP was

Which of the following items is included in U.S. GDP?

Which of the following statements about GDP is correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters