Question 1

Which of the following is not included in GDP?

Accepted Answer

A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP. 
A)  carrots grown in your garden and eaten by your family 
B)  carrots purchased at a farmer's market and eaten by your family 
C)  carrots purchased at a grocery store and eaten by your family 
D)  None of the above are included in GDP.

Question 2

Table 23-2
The table below contains data for country A for the year 2010.
  
-Refer to Table 23-2. 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 3

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Accepted Answer

A) True 
 B)False

Question 4

GDP is not a perfect measure of well-being; for example,

Accepted Answer

A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct. 
A)  GDP incorporates a large number of non-market goods and services that are of little value to society. 
B)  GDP places too much emphasis on the value of leisure. 
C)  GDP fails to account for the quality of the environment. 
D)  All of the above are correct.

Question 5

Expenditures on a nation's domestic production

Accepted Answer

A)  are less than its domestic production. 
B)  are equal to its domestic production. 
C)  are greater than its domestic production. 
D)  could be less than, equal to, or greater than its domestic production. 
A)  are less than its domestic production. 
B)  are equal to its domestic production. 
C)  are greater than its domestic production. 
D)  could be less than, equal to, or greater than its domestic production.

Question 6

Explain how real GDP differs from nominal GDP.

Accepted Answer

Real GDP reflects on

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

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Accepted Answer

Wages, rents, and pr

Question 9

Changes in nominal GDP reflect

Accepted Answer

A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced. 
A)  only changes in prices. 
B)  only changes in the amounts being produced. 
C)  both changes in prices and changes in the amounts being produced. 
D)  neither changes in prices nor changes in the amounts being produced.

Question 10

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)  GNP which is larger than GDP in country A. 
B)  GNP which is smaller than GDP in country A. 
C)  GDP which is larger than GNP in country A. 
D)  GDP which is smaller than GNP in country A. 
A)  GNP which is larger than GDP in country A. 
B)  GNP which is smaller than GDP in country A. 
C)  GDP which is larger than GNP in country A. 
D)  GDP which is smaller than GNP in country A.

Question 11

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

Accepted Answer

A)  $0 
B)  $10,000 
C)  $90,000 
D)  $100,000 
A)  $0 
B)  $10,000 
C)  $90,000 
D)  $100,000

Question 12

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Accepted Answer

A)  $500 
B)  -$700 
C)  $700 
D)  $500. 
A)  $500 
B)  -$700 
C)  $700 
D)  $500.

Question 13

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is included in the investment component of GDP?

Accepted Answer

A)  spending on new business equipment such as power tools and spending on stocks and bonds 
B)  spending on new business equipment such as power tools but not spending on stocks and bonds 
C)  spending on stocks and bonds but not spending on new business equipment such as power tools 
D)  neither spending on new business equipment such as power tools nor spending on stocks and bonds 
A)  spending on new business equipment such as power tools and spending on stocks and bonds 
B)  spending on new business equipment such as power tools but not spending on stocks and bonds 
C)  spending on stocks and bonds but not spending on new business equipment such as power tools 
D)  neither spending on new business equipment such as power tools nor spending on stocks and bonds

Question 15

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Accepted Answer

A) True 
 B)False

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

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.
  
-Refer to Table 23-6. In 2012, this country's GDP deflator was

Accepted Answer

A)  74.2. 
B)  100.0. 
C)  171.4. 
D)  240.0. 
A)  74.2. 
B)  100.0. 
C)  171.4. 
D)  240.0.

Question 18

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Accepted Answer

A) True 
 B)False

Question 19

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods

Question 20

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Accepted Answer

A) True 
 B)False

Which of the following is not included in GDP?

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's consumption in 2010?

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

GDP is not a perfect measure of well-being; for example,

Expenditures on a nation's domestic production

Explain how real GDP differs from nominal GDP.

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

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Changes in nominal GDP reflect

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

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Which of the following is included in the investment component of GDP?

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

National income differs from net national because

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2012, this country's GDP deflator was

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Changes in the GDP deflator reflect only changes in the prices of goods and services.

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 and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 5: Measuring a Nations Income

Which of the following is not included in GDP?

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's consumption in 2010?

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

GDP is not a perfect measure of well-being; for example,

Expenditures on a nation's domestic production

Explain how real GDP differs from nominal GDP.

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

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Changes in nominal GDP reflect

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

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Which of the following is included in the investment component of GDP?

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

National income differs from net national because

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2012, this country's GDP deflator was

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Changes in the GDP deflator reflect only changes in the prices of goods and services.

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 and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters