Question 1

Figure 23-2.  
-Refer to Figure 23-2. Identify the location of firms and households.

Accepted Answer

W is firms

Question 2

Table 23-1
The table below contains data for Chereaux for the year 2015.
  
-Refer to Table 23-1. Gross national product for Chereaux in 2015 is

Accepted Answer

A)  $186. 
B)  $214. 
C)  $200. 
D)  $204. 
A)  $186. 
B)  $214. 
C)  $200. 
D)  $204.

Question 3

In the actual economy, households

Accepted Answer

A)  spend all of their income. 
B)  divide their income among spending, taxes, and saving. 
C)  buy all goods and services produced in the economy. 
D)  Both a) and c) are correct. 
A)  spend all of their income. 
B)  divide their income among spending, taxes, and saving. 
C)  buy all goods and services produced in the economy. 
D)  Both a) and c) are correct.

Question 4

Recently, the U.S. national income accounts have switched to calling government purchases

Accepted Answer

A)  government spending and transfer payments. 
B)  transfer payments and gross investment by government. 
C)  government consumption expenditure and gross investment. 
D)  government wages, salaries, and investment expenditure. 
A)  government spending and transfer payments. 
B)  transfer payments and gross investment by government. 
C)  government consumption expenditure and gross investment. 
D)  government wages, salaries, and investment expenditure.

Question 5

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974.
  
-Refer to Table 23-7. Which of the following is not correct?

Accepted Answer

A)  This economy experienced growth from 1974 to 1975. 
B)  This economy experienced growth from 1975 to 1976. 
C)  This economy experienced growth from 1976 to 1977. 
D)  This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977. 
A)  This economy experienced growth from 1974 to 1975. 
B)  This economy experienced growth from 1975 to 1976. 
C)  This economy experienced growth from 1976 to 1977. 
D)  This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977.

Question 6

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Accepted Answer

A)  exactly one-third as much to GDP as does a dress. 
B)  more than one-third as much to GDP as does a dress. 
C)  less than one-third as much to GDP as does a dress. 
D)  exactly one-fourth as much to GDP as does a dress. 
A)  exactly one-third as much to GDP as does a dress. 
B)  more than one-third as much to GDP as does a dress. 
C)  less than one-third as much to GDP as does a dress. 
D)  exactly one-fourth as much to GDP as does a dress.

Question 7

Table 23-3
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 23-3. What was Crete's investment in 2010?

Accepted Answer

A)  $675 
B)  $1090 
C)  $1491 
D)  $1793 
A)  $675 
B)  $1090 
C)  $1491 
D)  $1793

Question 8

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 9

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Accepted Answer

A)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83. 
A)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. 
B)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16. 
C)  nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16. 
D)  nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.

Question 10

For the purpose of calculating GDP, investment is spending on

Accepted Answer

A)  stocks, bonds, and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment, inventories, and structures, including household purchases of new housing. 
D)  capital equipment, inventories, and structures, excluding household purchases of new housing. 
A)  stocks, bonds, and other financial assets. 
B)  real estate and financial assets such as stocks and bonds. 
C)  capital equipment, inventories, and structures, including household purchases of new housing. 
D)  capital equipment, inventories, and structures, excluding household purchases of new housing.

Question 11

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $1350 
B)  $1450 
C)  $1050 
D)  $1750 
A)  $1350 
B)  $1450 
C)  $1050 
D)  $1750

Question 12

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1

Question 13

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 14

Which of the following represents a transfer payment?

Accepted Answer

A)  You transfer $1,000 from your bank account to a mutual fund. 
B)  The government sends your grandfather his Social Security check. 
C)  You make a payment to get legal documents showing you purchased a previously owned home. 
D)  Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account. 
A)  You transfer $1,000 from your bank account to a mutual fund. 
B)  The government sends your grandfather his Social Security check. 
C)  You make a payment to get legal documents showing you purchased a previously owned home. 
D)  Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.

Question 15

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 16

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

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 2013, this country's real GDP was

Accepted Answer

A)  $500. 
B)  $700. 
C)  $900. 
D)  $1200. 
A)  $500. 
B)  $700. 
C)  $900. 
D)  $1200.

Question 18

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 19

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 20

GDP includes the value of all

Accepted Answer

A)  final goods and services produced within a country using primarily market prices to measure the value of goods and services. 
B)  final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services. 
C)  goods and services produced within a country using primarily market prices to measure the value of goods and services. 
D)  goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services. 
A)  final goods and services produced within a country using primarily market prices to measure the value of goods and services. 
B)  final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services. 
C)  goods and services produced within a country using primarily market prices to measure the value of goods and services. 
D)  goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.

Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Gross national product for Chereaux in 2015 is

In the actual economy, households

Recently, the U.S. national income accounts have switched to calling government purchases

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. Which of the following is not correct?

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's investment in 2010?

The inflation rate is the

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

For the purpose of calculating GDP, investment is spending on

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

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 represents a transfer payment?

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

Periods during which real GDP rises are called recessions.

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 2013, this country's real GDP was

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?

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

GDP includes the value of all

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

Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Gross national product for Chereaux in 2015 is

In the actual economy, households

Recently, the U.S. national income accounts have switched to calling government purchases

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. Which of the following is not correct?

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's investment in 2010?

The inflation rate is the

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

For the purpose of calculating GDP, investment is spending on

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

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 represents a transfer payment?

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

Periods during which real GDP rises are called recessions.

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 2013, this country's real GDP was

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?

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

GDP includes the value of all

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