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

Java Hut, a U.S. coffee retailer, buys $10 million worth of coffee beans from Colombia. It also pays $5 million for paper cups and utilities, all produced in the U.S. It sells the coffee it produces using the above inputs to U.S. consumers for $50 million. Overall how do these expenditure affect net exports? How do these expenditures effect U.S. consumption?

Accepted Answer

Net exports are $10 million le

Question 3

How is net national product NNP) calculated?

Accepted Answer

A)  Saving is added to the total income of a nation's citizens. 
B)  Saving is added to the total income earned within a nation. 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are subtracted from the total income earned within a nation. 
A)  Saving is added to the total income of a nation's citizens. 
B)  Saving is added to the total income earned within a nation. 
C)  Depreciation losses are subtracted from the total income of a nation's citizens. 
D)  Depreciation losses are subtracted from the total income earned within a nation.

Question 4

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 5

The underground economy

Accepted Answer

A)  excludes the amount of criminal activity in an economy. 
B)  is larger for developed nations than developing nations when measured as a percent of GDP. 
C)  includes otherwise legal transactions that go unreported or unrecorded. 
D)  in the United States is insignificant is size when compared to the official measure of GDP. 
A)  excludes the amount of criminal activity in an economy. 
B)  is larger for developed nations than developing nations when measured as a percent of GDP. 
C)  includes otherwise legal transactions that go unreported or unrecorded. 
D)  in the United States is insignificant is size when compared to the official measure of GDP.

Question 6

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 7

If total spending rises from one year to the next, then which of the following could not be true?

Accepted Answer

A)  the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices. 
B)  the economy is producing a larger output of goods and services, and goods and services are selling at lower prices. 
C)  the economy is producing a larger output of goods and services, and goods and services are selling at higher prices. 
D)  the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices. 
A)  the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices. 
B)  the economy is producing a larger output of goods and services, and goods and services are selling at lower prices. 
C)  the economy is producing a larger output of goods and services, and goods and services are selling at higher prices. 
D)  the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.

Question 8

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Accepted Answer

A)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90. 
B)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1. 
C)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90. 
D)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1. 
A)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90. 
B)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1. 
C)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90. 
D)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1.

Question 9

Macroeconomists study

Accepted Answer

A)  the decisions of individual households and firms. 
B)  the interaction between households and firms. 
C)  economy-wide phenomena. 
D)  regulations imposed on firms and unions. 
A)  the decisions of individual households and firms. 
B)  the interaction between households and firms. 
C)  economy-wide phenomena. 
D)  regulations imposed on firms and unions.

Question 10

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

Accepted Answer

A)  GDP excludes the value of volunteer work. 
B)  GDP does not address the distribution of income. 
C)  GDP does not address environmental quality. 
D)  All of the above are correct. 
A)  GDP excludes the value of volunteer work. 
B)  GDP does not address the distribution of income. 
C)  GDP does not address environmental quality. 
D)  All of the above are correct.

Question 11

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Accepted Answer

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

Question 12

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974.
  
-Refer to Table 23-7. From 1975 to 1976,

Accepted Answer

A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew. 
A)  inflation was 25% and output did not grow. 
B)  inflation was 25% and output grew. 
C)  inflation was 50% and output did not grow. 
D)  inflation was 50% and output grew.

Question 13

Real GDP per person tells us the income and expenditure of the average person in the economy.

Accepted Answer

A) True 
 B)False

Question 14

If net exports is a negative number for a particular year, then

Accepted Answer

A)  the value of firms' inventories declined over the course of the year. 
B)  consumption exceeded the sum of investment and government purchases during the year. 
C)  the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D)  the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year. 
A)  the value of firms' inventories declined over the course of the year. 
B)  consumption exceeded the sum of investment and government purchases during the year. 
C)  the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. 
D)  the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

Question 15

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A)  Ghana, Kenya, Tanzania 
B)  Ghana, Tanzania, Kenya 
C)  Kenya, Tanzania, Ghana 
D)  Kenya, Ghana, Tanzania 
A)  Ghana, Kenya, Tanzania 
B)  Ghana, Tanzania, Kenya 
C)  Kenya, Tanzania, Ghana 
D)  Kenya, Ghana, Tanzania

Question 16

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 real GDP was

Accepted Answer

A)  $510. 
B)  $690. 
C)  $930. 
D)  $780. 
A)  $510. 
B)  $690. 
C)  $930. 
D)  $780.

Question 17

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

Accepted Answer

A)  spending to build new houses 
B)  spending to build new factories 
C)  spending on business equipment such as welding equipment 
D)  All of the above are included in the investment component of GDP. 
A)  spending to build new houses 
B)  spending to build new factories 
C)  spending on business equipment such as welding equipment 
D)  All of the above are included in the investment component of GDP.

Question 18

When economists refer to intangible items, they are referring to such things as

Accepted Answer

A)  illegal goods, and the value of such items is included in GDP. 
B)  illegal goods, and the value of such items is excluded from GDP. 
C)  hair styling and dental care, and the value of such items is included in GDP. 
D)  hair styling and dental care, and the value of such items is excluded from GDP. 
A)  illegal goods, and the value of such items is included in GDP. 
B)  illegal goods, and the value of such items is excluded from GDP. 
C)  hair styling and dental care, and the value of such items is included in GDP. 
D)  hair styling and dental care, and the value of such items is excluded from GDP.

Question 19

Which of the following is not correct?

Accepted Answer

A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries, including the United States, GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments. 
A)  GNP equals net national product plus losses from depreciation. 
B)  For most countries, including the United States, GDP and GNP are nearly the same. 
C)  GDP and GNP typically move in opposite directions. 
D)  Personal income equals disposable personal income plus personal taxes plus certain nontax payments.

Question 20

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $6200 
B)  $6400 
C)  $7000 
D)  $8200 
A)  $6200 
B)  $6400 
C)  $7000 
D)  $8200

Countries with low GDP per person tend to have

How is net national product NNP) calculated?

Which of the following statements about recessions is true?

The underground economy

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

If total spending rises from one year to the next, then which of the following could not be true?

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Macroeconomists study

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

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. From 1975 to 1976,

Real GDP per person tells us the income and expenditure of the average person in the economy.

If net exports is a negative number for a particular year, then

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

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 real GDP was

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

When economists refer to intangible items, they are referring to such things as

Which of the following is not correct?

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

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

Countries with low GDP per person tend to have

How is net national product NNP) calculated?

Which of the following statements about recessions is true?

The underground economy

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

If total spending rises from one year to the next, then which of the following could not be true?

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Macroeconomists study

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

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. From 1975 to 1976,

Real GDP per person tells us the income and expenditure of the average person in the economy.

If net exports is a negative number for a particular year, then

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

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 real GDP was

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

When economists refer to intangible items, they are referring to such things as

Which of the following is not correct?

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

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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