Question 1

GDP does not reflect

Accepted Answer

A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct. 
A)  the value of leisure. 
B)  the value of goods and services produced at home. 
C)  the quality of the environment. 
D)  All of the above are correct.

Question 2

Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion?

Accepted Answer

A)  GDP necessarily increases. 
B)  GDP necessarily decreases. 
C)  GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP. 
D)  GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of owner occupied housing services. 
A)  GDP necessarily increases. 
B)  GDP necessarily decreases. 
C)  GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP. 
D)  GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of owner occupied housing services.

Question 3

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Accepted Answer

A)  $18,000 
B)  $22,000 
C)  $39,000 
D)  $57,000 
A)  $18,000 
B)  $22,000 
C)  $39,000 
D)  $57,000

Question 4

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur

Question 5

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

Accepted Answer

A) True 
 B)False

Question 6

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Accepted Answer

A)  $6700 
B)  $6800 
C)  $7000 
D)  $7200 
A)  $6700 
B)  $6800 
C)  $7000 
D)  $7200

Question 7

Identify the immediate effect of each of the following events on U.S. GDP and its components.
a.James receives a Social Security check.
b.John buys an Italian sports car.
c.Henry buys domestically produced tools for his construction company.

Accepted Answer

a.
Since this is a transfer payment, the

Question 8

Table 5-1
The table below contains data for Bahkan for the year 2010.
  
-Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

Accepted Answer

A)  $37. 
B)  $44. 
C)  $54. 
D)  $63. 
A)  $37. 
B)  $44. 
C)  $54. 
D)  $63.

Question 9

When economists talk about growth in the economy, they measure that growth as the

Accepted Answer

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

Question 10

In 2009, U.S. net exports were

Accepted Answer

A)  positive and about 3 percent the size of GDP. 
B)  positive and about 6 percent the size of GDP. 
C)  negative and about 3 percent the size of GDP. 
D)  negative and about 6 percent the size of GDP. 
A)  positive and about 3 percent the size of GDP. 
B)  positive and about 6 percent the size of GDP. 
C)  negative and about 3 percent the size of GDP. 
D)  negative and about 6 percent the size of GDP.

Question 11

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

Accepted Answer

A)  in both German GDP and U.S. GDP. 
B)  in German GDP, but is not included in U.S. GDP. 
C)  in U.S. GDP, but is not included in German GDP. 
D)  in neither German GDP nor U.S. GDP. 
A)  in both German GDP and U.S. GDP. 
B)  in German GDP, but is not included in U.S. GDP. 
C)  in U.S. GDP, but is not included in German GDP. 
D)  in neither German GDP nor U.S. GDP.

Question 12

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Accepted Answer

A)  -$250 
B)  $250 
C)  $2200 
D)  Net exports cannot be calculated from the information given. 
A)  -$250 
B)  $250 
C)  $2200 
D)  Net exports cannot be calculated from the information given.

Question 13

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Accepted Answer

A)  market prices. 
B)  statistical estimates of the value of goods and services to consumers. 
C)  prices based on the assumption that producers make no profits. 
D)  the maximum amount consumers would be willing to pay. 
A)  market prices. 
B)  statistical estimates of the value of goods and services to consumers. 
C)  prices based on the assumption that producers make no profits. 
D)  the maximum amount consumers would be willing to pay.

Question 14

GDP is equal to

Accepted Answer

A)  the market value of all final goods and services produced within a country in a given period of time. 
B)  Y. 
C)  C + I + G + NX. 
D)  All of the above are correct. 
A)  the market value of all final goods and services produced within a country in a given period of time. 
B)  Y. 
C)  C + I + G + NX. 
D)  All of the above are correct.

Question 15

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

Accepted Answer

A)  In 2010, Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis. The windows remain in Marvin's inventory at the end of 2010. 
B)  An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time. 
C)  When Tim and Tina were both single, they lived in separate apartments and each paid $750 in rent. Tim and Tina got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,550 per month. 
D)  All of the above transactions add to U.S. GDP for 2006. 
A)  In 2010, Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis. The windows remain in Marvin's inventory at the end of 2010. 
B)  An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time. 
C)  When Tim and Tina were both single, they lived in separate apartments and each paid $750 in rent. Tim and Tina got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,550 per month. 
D)  All of the above transactions add to U.S. GDP for 2006.

Question 16

Table 5-1
The table below contains data for country A for the year 2010.
  
-Refer to Table 5-1. What was country A's consumption in 2010?

Accepted Answer

A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015 
A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015

Question 17

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures. 
A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures.

Question 18

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

Accepted Answer

A)  the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and subtracted from the investment category of 2011 GDP. 
B)  the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP. 
C)  the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP. 
D)  the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and added to the investment category of 2011 GDP. 
A)  the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and subtracted from the investment category of 2011 GDP. 
B)  the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP. 
C)  the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP. 
D)  the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and added to the investment category of 2011 GDP.

Question 19

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Accepted Answer

A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples. 
A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples.

Question 20

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)  the quality of these items is not high enough to contribute value to GDP. 
B)  measuring them is so difficult. 
C)  the government wants to discourage the production and consumption of these items. 
D)  these items are not reported on income tax forms. 
A)  the quality of these items is not high enough to contribute value to GDP. 
B)  measuring them is so difficult. 
C)  the government wants to discourage the production and consumption of these items. 
D)  these items are not reported on income tax forms.

GDP does not reflect

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Identify the immediate effect of each of the following events on U.S. GDP and its components. a.James receives a Social Security check. b.John buys an Italian sports car. c.Henry buys domestically produced tools for his construction company.

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

When economists talk about growth in the economy, they measure that growth as the

In 2009, U.S. net exports were

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

GDP is equal to

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

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What was country A's consumption in 2010?

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

If nominal GDP doubles and the GDP deflator doubles, then real GDP

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

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

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Exam 5: Measuring a Nations Income

GDP does not reflect

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Identify the immediate effect of each of the following events on U.S. GDP and its components. a.James receives a Social Security check. b.John buys an Italian sports car. c.Henry buys domestically produced tools for his construction company.

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

When economists talk about growth in the economy, they measure that growth as the

In 2009, U.S. net exports were

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

GDP is equal to

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

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What was country A's consumption in 2010?

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

If nominal GDP doubles and the GDP deflator doubles, then real GDP

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

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