Question 1

In 2009, government purchases was the largest component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 2

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 3

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

Accepted Answer

A)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government purchases. 
B)  The 2013 payment is included in 2013 GDP as government purchases, but the 2014 payment is not included in 2014 GDP. 
C)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government transfer payments. 
D)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year. 
A)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government purchases. 
B)  The 2013 payment is included in 2013 GDP as government purchases, but the 2014 payment is not included in 2014 GDP. 
C)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government transfer payments. 
D)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year.

Question 4

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 5

In the economy of Talikastan in 2015, consumption was $5300, GDP was $8800, government purchases were $1800, imports were $600, and investment was $2000. What were Talikastan's exports in 2015?

Accepted Answer

A)  -$900 
B)  -$600 
C)  $200 
D)  $300 
A)  -$900 
B)  -$600 
C)  $200 
D)  $300

Question 6

The consumption component of GDP includes spending on

Accepted Answer

A)  durable goods and nondurable goods, but not spending on services. 
B)  durable goods and services, but not spending on nondurable goods. 
C)  nondurable goods and services, but not spending on durable goods. 
D)  durable goods, nondurable goods, and services. 
A)  durable goods and nondurable goods, but not spending on services. 
B)  durable goods and services, but not spending on nondurable goods. 
C)  nondurable goods and services, but not spending on durable goods. 
D)  durable goods, nondurable goods, and services.

Question 7

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 8

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

Accepted Answer

A)  $24,450. 
B)  $11,550. 
C)  $15,300. 
D)  $20,700. 
A)  $24,450. 
B)  $11,550. 
C)  $15,300. 
D)  $20,700.

Question 9

Which of the following statements about GDP is correct?

Accepted Answer

A)  Nominal GDP values production at current prices, whereas real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices, whereas real GDP values production at current prices. 
C)  Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices. 
A)  Nominal GDP values production at current prices, whereas real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices, whereas real GDP values production at current prices. 
C)  Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices.

Question 10

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

Accepted Answer

A)  GDP would definitely increase, despite the fact that GDP includes environmental quality. 
B)  GDP would definitely decrease because GDP includes environmental quality. 
C)  GDP would definitely increase because GDP excludes environmental quality. 
D)  GDP could either increase or decrease because GDP excludes environmental quality. 
A)  GDP would definitely increase, despite the fact that GDP includes environmental quality. 
B)  GDP would definitely decrease because GDP includes environmental quality. 
C)  GDP would definitely increase because GDP excludes environmental quality. 
D)  GDP could either increase or decrease because GDP excludes environmental quality.

Question 11

Which of the following is included in government purchases?

Accepted Answer

A)  unemployment benefits a state pays 
B)  Social Security payments the U.S. government makes 
C)  the services of a U.S. government attorney valued at the cost of her salary 
D)  All of the above are correct. 
A)  unemployment benefits a state pays 
B)  Social Security payments the U.S. government makes 
C)  the services of a U.S. government attorney valued at the cost of her salary 
D)  All of the above are correct.

Question 12

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

Accepted Answer

A) True 
 B)False

Question 13

GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.

Accepted Answer

GDP excludes some products because they

Question 14

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Accepted Answer

A)  the amount she paid to buy the new parts 
B)  the amount she paid to buy new parts and gasoline 
C)  the amount she paid to buy new parts, gasoline, and oil. 
D)  the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter. 
A)  the amount she paid to buy the new parts 
B)  the amount she paid to buy new parts and gasoline 
C)  the amount she paid to buy new parts, gasoline, and oil. 
D)  the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.

Question 15

Recessions are not associated with which of the following?

Accepted Answer

A)  increased bankruptcies 
B)  falling profits 
C)  falling incomes 
D)  falling unemployment 
A)  increased bankruptcies 
B)  falling profits 
C)  falling incomes 
D)  falling unemployment

Question 16

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

Accepted Answer

A)  -$75 
B)  -$225 
C)  $225 
D)  $75 
A)  -$75 
B)  -$225 
C)  $225 
D)  $75

Question 17

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 18

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 19

Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015.
Prices and Quantities
  
-Refer to Table 23-5. This country's inflation rate from 2017 to 2018 was

Accepted Answer

A)  20.0%. 
B)  21.8%. 
C)  38.9%. 
D)  28.0%. 
A)  20.0%. 
B)  21.8%. 
C)  38.9%. 
D)  28.0%.

Question 20

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.

Accepted Answer

A) True 
 B)False

In 2009, government purchases was the largest component of U.S. GDP.

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

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

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,

In the economy of Talikastan in 2015, consumption was $5300, GDP was $8800, government purchases were $1800, imports were $600, and investment was $2000. What were Talikastan's exports in 2015?

The consumption component of GDP includes spending on

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

Which of the following statements about GDP is correct?

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

Which of the following is included in government purchases?

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Recessions are not associated with which of the following?

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

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

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

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. This country's inflation rate from 2017 to 2018 was

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.

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

In 2009, government purchases was the largest component of U.S. GDP.

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

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

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,

In the economy of Talikastan in 2015, consumption was $5300, GDP was $8800, government purchases were $1800, imports were $600, and investment was $2000. What were Talikastan's exports in 2015?

The consumption component of GDP includes spending on

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

Which of the following statements about GDP is correct?

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

Which of the following is included in government purchases?

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Recessions are not associated with which of the following?

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

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

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

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. This country's inflation rate from 2017 to 2018 was

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.

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