Question 1

Which of the following is not included in U.S. GDP?

Accepted Answer

A)  additions of newly produced output to inventory 
B)  production of U.S citizens working in foreign countries. 
C)  the estimated rental value of owner-occupied housing 
D)  the value of food purchased from a grocery store to make meals at home without pay 
A)  additions of newly produced output to inventory 
B)  production of U.S citizens working in foreign countries. 
C)  the estimated rental value of owner-occupied housing 
D)  the value of food purchased from a grocery store to make meals at home without pay

Question 2

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Accepted Answer

A)  nominal GDP is $22,000 real GDP is $21,000, and the GDP deflator is 95.45. 
B)  nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77. 
C)  nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45. 
D)  nominal GDP is $21,00, real GDP is $22,000, and the GDP deflator is 104.77. 
A)  nominal GDP is $22,000 real GDP is $21,000, and the GDP deflator is 95.45. 
B)  nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77. 
C)  nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45. 
D)  nominal GDP is $21,00, real GDP is $22,000, and the GDP deflator is 104.77.

Question 3

Table 5-7
The table below contains data for the country of Togogo. The base year is 1974.
  
-Refer to Table 5-7. From 1976 to 1977,

Accepted Answer

A)  inflation was 33.3% and output grew at a rate of 20%. 
B)  inflation was 33.3% and output grew at a rate of 60%. 
C)  inflation was 50% and output grew at a rate of 20%. 
D)  inflation was 50% and output grew at a rate of 60%. 
A)  inflation was 33.3% and output grew at a rate of 20%. 
B)  inflation was 33.3% and output grew at a rate of 60%. 
C)  inflation was 50% and output grew at a rate of 20%. 
D)  inflation was 50% and output grew at a rate of 60%.

Question 4

A recession has traditionally been defined as a period during which

Accepted Answer

A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters. 
A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters.

Question 5

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following correctly orders U.S. income measures from largest to smallest?

Accepted Answer

A)  disposable personal income, gross national product, national income, net national product, personal income 
B)  personal income, net national product, national income, gross national product, disposable personal income 
C)  gross national product, net national product, national income, personal income, disposable personal income 
D)  disposable personal income, personal income, national income, net national product, gross national product 
A)  disposable personal income, gross national product, national income, net national product, personal income 
B)  personal income, net national product, national income, gross national product, disposable personal income 
C)  gross national product, net national product, national income, personal income, disposable personal income 
D)  disposable personal income, personal income, national income, net national product, gross national product

Question 7

When an Egyptian firm purchases a cement mixer from Slovakia,

Accepted Answer

A)  Egyptian investment does not change, Egyptian net exports decrease, Egyptian GDP decreases, Slovakian net exports increase, and Slovakian GDP increases. 
B)  Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases. 
C)  Egyptian investment decreases, Egyptian net exports increase, Egyptian GDP is unaffected, Slovakian net exports decrease, and Slovakian GDP decreases. 
D)  Egyptian investment increases, Egyptian net exports do not change, Egyptian GDP increases, Slovakian net exports do not change, and Slovakian GDP is unaffected. 
A)  Egyptian investment does not change, Egyptian net exports decrease, Egyptian GDP decreases, Slovakian net exports increase, and Slovakian GDP increases. 
B)  Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases. 
C)  Egyptian investment decreases, Egyptian net exports increase, Egyptian GDP is unaffected, Slovakian net exports decrease, and Slovakian GDP decreases. 
D)  Egyptian investment increases, Egyptian net exports do not change, Egyptian GDP increases, Slovakian net exports do not change, and Slovakian GDP is unaffected.

Question 8

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements about recessions is true?

Accepted Answer

A)  An old rule of thumb defining recession is two consecutive quarters of falling nominal GDP. 
B)  Recessions occur at regular intervals and last standard amounts of time. 
C)  There is no ironclad rule for the declaration of recessions. 
D)  Recessions are associated with low unemployment and high income. 
A)  An old rule of thumb defining recession is two consecutive quarters of falling nominal GDP. 
B)  Recessions occur at regular intervals and last standard amounts of time. 
C)  There is no ironclad rule for the declaration of recessions. 
D)  Recessions are associated with low unemployment and high income.

Question 10

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2009 for $205,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)  The 2009 sale increased 2009 GDP by $205,000 and had no effect on 2007 GDP. 
B)  The 2009 sale reduced 2009 GDP by $70,000 and had no effect on 2007 GDP. 
C)  The 2009 sale increased 2009 GDP by $205,000; and caused 2007 GDP to be revised downward by $70,000. 
D)  The 2009 sale affected neither 2007 GDP nor 2009 GDP. 
A)  The 2009 sale increased 2009 GDP by $205,000 and had no effect on 2007 GDP. 
B)  The 2009 sale reduced 2009 GDP by $70,000 and had no effect on 2007 GDP. 
C)  The 2009 sale increased 2009 GDP by $205,000; and caused 2007 GDP to be revised downward by $70,000. 
D)  The 2009 sale affected neither 2007 GDP nor 2009 GDP.

Question 11

The basic tools of supply and demand are

Accepted Answer

A)  useful only in the analysis of economic behavior in individual markets. 
B)  useful in analyzing the overall economy, but not in analyzing individual markets. 
C)  central to microeconomic analysis, but seldom used in macroeconomic analysis. 
D)  central to macroeconomic analysis as well as to microeconomic analysis. 
A)  useful only in the analysis of economic behavior in individual markets. 
B)  useful in analyzing the overall economy, but not in analyzing individual markets. 
C)  central to microeconomic analysis, but seldom used in macroeconomic analysis. 
D)  central to macroeconomic analysis as well as to microeconomic analysis.

Question 12

GDP is the market value of all final goods and services produced within a country in a given period of time.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit. Production of good A contributes

Accepted Answer

A)  2 times as much to GDP as the production of good B. 
B)  8/5 times as much to GDP as the production of good B. 
C)  5/4 times as much to GDP as the production of good B. 
D)  4/5 times as much to GDP as production of good B. 
A)  2 times as much to GDP as the production of good B. 
B)  8/5 times as much to GDP as the production of good B. 
C)  5/4 times as much to GDP as the production of good B. 
D)  4/5 times as much to GDP as production of good B.

Question 14

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 2008, this country's nominal GDP was

Accepted Answer

A)  $300. 
B)  $390. 
C)  $400. 
D)  $540. 
A)  $300. 
B)  $390. 
C)  $400. 
D)  $540.

Question 15

Real GDP is a better gauge of economic well-being than is nominal GDP.

Accepted Answer

A) True 
 B)False

Question 16

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Accepted Answer

A)  nominal GDP is $400, real GDP is $500, and the GDP deflator is 80. 
B)  nominal GDP is $400, real GDP is $500, and the GDP deflator is 125. 
C)  nominal GDP is $500, real GDP is $400, and the GDP deflator is 80. 
D)  nominal GDP is $500, real GDP is $400, and the GDP deflator is 125. 
A)  nominal GDP is $400, real GDP is $500, and the GDP deflator is 80. 
B)  nominal GDP is $400, real GDP is $500, and the GDP deflator is 125. 
C)  nominal GDP is $500, real GDP is $400, and the GDP deflator is 80. 
D)  nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.

Question 17

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

Accepted Answer

A)  the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S. GDP. 
A)  the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S. GDP.

Question 18

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Accepted Answer

A)  Janet's purchase and ABC Bakery's purchase. 
B)  ABC Bakery's purchase but not Janet's purchase. 
C)  Janet's purchase but not ABC Bakery's purchase. 
D)  Neither Janet's purchase nor ABC Bakery's purchase. 
A)  Janet's purchase and ABC Bakery's purchase. 
B)  ABC Bakery's purchase but not Janet's purchase. 
C)  Janet's purchase but not ABC Bakery's purchase. 
D)  Neither Janet's purchase nor ABC Bakery's purchase.

Question 19

Which of the following transactions would be included in GDP for 2010?

Accepted Answer

A)  In February 2010, Amanda sells a 1996 Honda Accord to Isabella. 
B)  In February 2010, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in April 2011. 
C)  In December 2010, Isabella eats onions that she harvested from her backyard garden in October 2010. 
D)  All of the above are correct. 
A)  In February 2010, Amanda sells a 1996 Honda Accord to Isabella. 
B)  In February 2010, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in April 2011. 
C)  In December 2010, Isabella eats onions that she harvested from her backyard garden in October 2010. 
D)  All of the above are correct.

Question 20

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator ?

Accepted Answer

A)  87.5 
B)  114.3 
C)  400 
D)  896 
A)  87.5 
B)  114.3 
C)  400 
D)  896

Which of the following is not included in U.S. GDP?

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. From 1976 to 1977,

A recession has traditionally been defined as a period during which

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Which of the following correctly orders U.S. income measures from largest to smallest?

When an Egyptian firm purchases a cement mixer from Slovakia,

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Which of the following statements about recessions is true?

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2009 for $205,000. Which of the following statements is correct regarding the sale of the house?

The basic tools of supply and demand are

GDP is the market value of all final goods and services produced within a country in a given period of time.

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit. Production of good A contributes

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 2008, this country's nominal GDP was

Real GDP is a better gauge of economic well-being than is nominal GDP.

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

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

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Which of the following transactions would be included in GDP for 2010?

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator ?

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

Which of the following is not included in U.S. GDP?

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. From 1976 to 1977,

A recession has traditionally been defined as a period during which

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Which of the following correctly orders U.S. income measures from largest to smallest?

When an Egyptian firm purchases a cement mixer from Slovakia,

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180, then the inflation rate in 2010 was 12.5%.

Which of the following statements about recessions is true?

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2009 for $205,000. Which of the following statements is correct regarding the sale of the house?

The basic tools of supply and demand are

GDP is the market value of all final goods and services produced within a country in a given period of time.

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit. Production of good A contributes

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 2008, this country's nominal GDP was

Real GDP is a better gauge of economic well-being than is nominal GDP.

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

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

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Which of the following transactions would be included in GDP for 2010?

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator ?

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