Question 1

Countries with low GDP per person tend to have

Accepted Answer

A)  lower rates of child malnutrition. 
B)  fewer infants with low birth weight. 
C)  higher rates of infant mortality. 
D)  more access to safe drinking water. 
A)  lower rates of child malnutrition. 
B)  fewer infants with low birth weight. 
C)  higher rates of infant mortality. 
D)  more access to safe drinking water.

Question 2

A Mexican company operates a restaurant in the U.S. The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A)  U.S. GNP and Mexican GNP. 
B)  U.S. GNP and Mexican GDP. 
C)  U.S. GDP and Mexican GNP. 
D)  U.S. GDP and Mexican GDP. 
A)  U.S. GNP and Mexican GNP. 
B)  U.S. GNP and Mexican GDP. 
C)  U.S. GDP and Mexican GNP. 
D)  U.S. GDP and Mexican GDP.

Question 3

If a good produced this quarter goes into inventory, then it is included in this period's GDP. If it is sold in the next quarter, it will have no effect on GDP.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an example of a durable good?

Accepted Answer

A)  a refrigerator 
B)  a quart of motor oil 
C)  a business suit 
D)  a can of soup 
A)  a refrigerator 
B)  a quart of motor oil 
C)  a business suit 
D)  a can of soup

Question 5

Which of the following is a way to compute GDP?

Accepted Answer

A)  add up the wages paid to all workers 
B)  add up the quantities of all final goods and services 
C)  add up the market values of all final goods and services 
D)  add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services 
A)  add up the wages paid to all workers 
B)  add up the quantities of all final goods and services 
C)  add up the market values of all final goods and services 
D)  add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services

Question 6

Table 5-1
The table below contains data for Bahkan for the year 2010.
  
-Refer to Table 5-1. The market value of all final goods and services produced within Bahkan in 2010 is

Accepted Answer

A)  $95. 
B)  $100. 
C)  $110. 
D)  $120. 
A)  $95. 
B)  $100. 
C)  $110. 
D)  $120.

Question 7

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Accepted Answer

A)  raises GDP. 
B)  decreases GDP. 
C)  doesn't change GDP because gambling is never included in GDP. 
D)  doesn't change GDP because in either case his income is included. 
A)  raises GDP. 
B)  decreases GDP. 
C)  doesn't change GDP because gambling is never included in GDP. 
D)  doesn't change GDP because in either case his income is included.

Question 8

Social Security payments are

Accepted Answer

A)  included in GDP because they represent current income. 
B)  included in GDP because they represent potential consumption. 
C)  excluded from GDP because they are not private pensions. 
D)  excluded from GDP because they do not reflect the economy's production. 
A)  included in GDP because they represent current income. 
B)  included in GDP because they represent potential consumption. 
C)  excluded from GDP because they are not private pensions. 
D)  excluded from GDP because they do not reflect the economy's production.

Question 9

Disposable income is

Accepted Answer

A)  the total income earned by a nation's permanent residents. 
B)  the total income earned by a nation's residents in the production of good and services. 
C)  the income that households and non-corporate businesses receive. 
D)  the income that households and businesses have remaining after satisfying their obligations to the government. 
A)  the total income earned by a nation's permanent residents. 
B)  the total income earned by a nation's residents in the production of good and services. 
C)  the income that households and non-corporate businesses receive. 
D)  the income that households and businesses have remaining after satisfying their obligations to the government.

Question 10

A form of government spending that is not made in exchange for a currently produced good or service is called

Accepted Answer

A)  a transfer payment. 
B)  consumption. 
C)  investment. 
D)  None of the above is correct. 
A)  a transfer payment. 
B)  consumption. 
C)  investment. 
D)  None of the above is correct.

Question 11

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

Accepted Answer

A) True 
 B)False

Question 12

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,

Accepted Answer

A)  real output and the price level both rose. 
B)  real output rose and the price level fell. 
C)  real output fell and the price level rose. 
D)  real output and the price level both fell. 
A)  real output and the price level both rose. 
B)  real output rose and the price level fell. 
C)  real output fell and the price level rose. 
D)  real output and the price level both fell.

Question 13

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Accepted Answer

A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate. 
A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate.

Question 14

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

Accepted Answer

A)  both the increased inventory of sugar and the increased inventory of energy drinks. 
B)  the increased inventory of sugar, but not the increased inventory of energy drinks. 
C)  the increased inventory of energy drinks, but not the increased inventory of sugar. 
D)  neither the increased inventory of sugar nor the increased inventory of energy drinks. 
A)  both the increased inventory of sugar and the increased inventory of energy drinks. 
B)  the increased inventory of sugar, but not the increased inventory of energy drinks. 
C)  the increased inventory of energy drinks, but not the increased inventory of sugar. 
D)  neither the increased inventory of sugar nor the increased inventory of energy drinks.

Question 15

In the economy of Ukzten in 2010, consumption was $500, exports were $200, GDP was $1200, government purchases were $250, and investment was $300. What were Ukzten's imports in 2010?

Accepted Answer

A)  -$150 
B)  -$50 
C)  $50 
D)  $150 
A)  -$150 
B)  -$50 
C)  $50 
D)  $150

Question 16

National income differs from net national because

Accepted Answer

A)  it includes profits of corporations. 
B)  of a statistical discrepancy. 
C)  it includes transfer payments. 
D)  it excludes depreciation. 
A)  it includes profits of corporations. 
B)  of a statistical discrepancy. 
C)  it includes transfer payments. 
D)  it excludes depreciation.

Question 17

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Accepted Answer

A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected. 
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000. 
C)  U.S. government purchases, net exports, and GDP are unaffected. 
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000. 
A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected. 
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000. 
C)  U.S. government purchases, net exports, and GDP are unaffected. 
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.

Question 18

The purchase of rice produced this period is included in GDP if the rice is

Accepted Answer

A)  used in a meal a restaurant sells during the same period they buy the rice. 
B)  purchased by a family who uses it to make tuna casserole for its supper. 
C)  purchased by a frozen food company to increase its inventory. 
D)  B and C are correct. 
A)  used in a meal a restaurant sells during the same period they buy the rice. 
B)  purchased by a family who uses it to make tuna casserole for its supper. 
C)  purchased by a frozen food company to increase its inventory. 
D)  B and C are correct.

Question 19

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Accepted Answer

A)  Both item (1) and item (2) are included in the consumption component of GDP. 
B)  Item (1) is included in the consumption component of GDP, while item (2) is included in the investment component of GDP. 
C)  Item (1) is included in the investment component of GDP, while item (2) is included in the consumption component of GDP. 
D)  Only item (2) is included in GDP, and it is included in the investment component. 
A)  Both item (1) and item (2) are included in the consumption component of GDP. 
B)  Item (1) is included in the consumption component of GDP, while item (2) is included in the investment component of GDP. 
C)  Item (1) is included in the investment component of GDP, while item (2) is included in the consumption component of GDP. 
D)  Only item (2) is included in GDP, and it is included in the investment component.

Question 20

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these transactions raise investment?

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

Countries with low GDP per person tend to have

A Mexican company operates a restaurant in the U.S. The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

If a good produced this quarter goes into inventory, then it is included in this period's GDP. If it is sold in the next quarter, it will have no effect on GDP.

Which of the following is an example of a durable good?

Which of the following is a way to compute GDP?

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. The market value of all final goods and services produced within Bahkan in 2010 is

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Social Security payments are

Disposable income is

A form of government spending that is not made in exchange for a currently produced good or service is called

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

In the economy of Ukzten in 2010, consumption was $500, exports were $200, GDP was $1200, government purchases were $250, and investment was $300. What were Ukzten's imports in 2010?

National income differs from net national because

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

The purchase of rice produced this period is included in GDP if the rice is

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these transactions raise investment?

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

Countries with low GDP per person tend to have

A Mexican company operates a restaurant in the U.S. The value of the restaurant's output produced by Mexican citizens and the equipment they own is included in

If a good produced this quarter goes into inventory, then it is included in this period's GDP. If it is sold in the next quarter, it will have no effect on GDP.

Which of the following is an example of a durable good?

Which of the following is a way to compute GDP?

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. The market value of all final goods and services produced within Bahkan in 2010 is

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Social Security payments are

Disposable income is

A form of government spending that is not made in exchange for a currently produced good or service is called

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include

In the economy of Ukzten in 2010, consumption was $500, exports were $200, GDP was $1200, government purchases were $250, and investment was $300. What were Ukzten's imports in 2010?

National income differs from net national because

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

The purchase of rice produced this period is included in GDP if the rice is

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these transactions raise investment?

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