Question 1

A capital good is

Accepted Answer

A) a good that lasts more than three years. 
B) a good that is used to make other goods and services. 
C) an intermediate product and therefore not part of GDP. 
D) a good that should increase in value over time. 
A) a good that lasts more than three years. 
B) a good that is used to make other goods and services. 
C) an intermediate product and therefore not part of GDP. 
D) a good that should increase in value over time. B

Question 2

Profits are part of the

Accepted Answer

A) total income. 
B) monetary value of output. 
C) final consumer goods. 
D) factor services. 
A) total income. 
B) monetary value of output. 
C) final consumer goods. 
D) factor services. A

Question 3

The price-corrected value for Gross Domestic Product is

Accepted Answer

A) real Gross Domestic Product (GDP). 
B) net Gross Domestic Product (GDP). 
C) net national product. 
D) per capita income. 
A) real Gross Domestic Product (GDP). 
B) net Gross Domestic Product (GDP). 
C) net national product. 
D) per capita income. A

Question 4

Which of the following would NOT be included in consumption expenditures when calculating GDP?

Accepted Answer

A) an individual's purchase of a new car 
B) an individual's purchase of medical services 
C) an individual's purchase of newly issued shares of IBM stock 
D) an individual's purchase of legal services 
A) an individual's purchase of a new car 
B) an individual's purchase of medical services 
C) an individual's purchase of newly issued shares of IBM stock 
D) an individual's purchase of legal services

Question 5

Which of the following transactions would NOT be included in GDP?

Accepted Answer

A) the purchase of 100 shares of newly issued Microsoft stock 
B) the purchase of a newly issued government bond 
C) the purchase of previously issued corporate bond 
D) all of the above 
A) the purchase of 100 shares of newly issued Microsoft stock 
B) the purchase of a newly issued government bond 
C) the purchase of previously issued corporate bond 
D) all of the above

Question 6

The difference between Gross Domestic Income (GDI)and Gross Domestic Product (GDP)is that

Accepted Answer

A) GDI is GDP less indirect business taxes and depreciation. 
B) GDP is GDI less indirect business taxes and depreciation. 
C) GDI is equal to GDP. 
D) GDP is always smaller than GDI. 
A) GDI is GDP less indirect business taxes and depreciation. 
B) GDP is GDI less indirect business taxes and depreciation. 
C) GDI is equal to GDP. 
D) GDP is always smaller than GDI.

Question 7

Which of the following statements is NOT true about the relationship between the dollar value of total output and total income?

Accepted Answer

A) The dollar value of total output equals total income because the spending of one group is the income of another. 
B) The dollar value of total output equals total income because profit is considered a cost of production. 
C) The dollar value of total output equals total income because profit is not considered a cost of production. 
D) The dollar value of total output equals total income because of the economic definition of profit. 
A) The dollar value of total output equals total income because the spending of one group is the income of another. 
B) The dollar value of total output equals total income because profit is considered a cost of production. 
C) The dollar value of total output equals total income because profit is not considered a cost of production. 
D) The dollar value of total output equals total income because of the economic definition of profit.

Question 8

The observation that goods and services flow in one direction and money payments flow in another direction is the principle behind

Accepted Answer

A) the double coincidence of wants. 
B) a barter economy. 
C) a pure command economy. 
D) the circular flow of income. 
A) the double coincidence of wants. 
B) a barter economy. 
C) a pure command economy. 
D) the circular flow of income.

Question 9

Suppose that the following occurred in two countries during the past decade.Country A,real Gross Domestic Product (GDP)rose 40 percent and population rose 46 percent;Country B,real Gross Domestic Product (GDP)increased 80 percent and population increased 75 percent.Based on this information,which is true?

Accepted Answer

A) Both countries have experienced growth in per capita real Gross Domestic Product (GDP). 
B) Neither country has experienced growth in per capita real Gross Domestic Product (GDP). 
C) Chances for an improved standard of living are greater in Country A. 
D) Only Country B has experienced growth in its per capita real Gross Domestic Product (GDP). 
A) Both countries have experienced growth in per capita real Gross Domestic Product (GDP). 
B) Neither country has experienced growth in per capita real Gross Domestic Product (GDP). 
C) Chances for an improved standard of living are greater in Country A. 
D) Only Country B has experienced growth in its per capita real Gross Domestic Product (GDP).

Question 10

Which of the following is consistent with the circular flow of income? I.Goods and services flow in one direction.
II.Payments and incomes flow in one direction.
III.Sellers receive less than what buyers spend.

Accepted Answer

A) I only 
B) II only 
C) III only 
D) Both I and II 
A) I only 
B) II only 
C) III only 
D) Both I and II

Question 11

Nominal GDP is calculated using

Accepted Answer

A) the market prices during the year under consideration. 
B) the prices from some base year to adjust for price changes. 
C) the average of prices from the three preceding years. 
D) the prices from the preceding year. 
A) the market prices during the year under consideration. 
B) the prices from some base year to adjust for price changes. 
C) the average of prices from the three preceding years. 
D) the prices from the preceding year.

Question 12

Why must total income be identical to the dollar value of total output?

Accepted Answer

Total income must be identical to the do

Question 13

Disposable personal income is found by taking

Accepted Answer

A) personal income taxes minus personal income. 
B) personal income minus personal income taxes. 
C) personal income taxes plus personal income. 
D) personal income times personal income taxes. 
A) personal income taxes minus personal income. 
B) personal income minus personal income taxes. 
C) personal income taxes plus personal income. 
D) personal income times personal income taxes.

Question 14

Intermediate goods are goods that are used up entirely in the production of final goods.As such,intermediate goods

Accepted Answer

A) are excluded in calculating Gross Domestic Product (GDP)because they are not valuable. 
B) are excluded in calculating Gross Domestic Product (GDP)because to do so would be to double count them. 
C) make up only a small portion of Gross Domestic Product (GDP). 
D) are included in Gross Domestic Product (GDP)only if produced within the borders of the United States. 
A) are excluded in calculating Gross Domestic Product (GDP)because they are not valuable. 
B) are excluded in calculating Gross Domestic Product (GDP)because to do so would be to double count them. 
C) make up only a small portion of Gross Domestic Product (GDP). 
D) are included in Gross Domestic Product (GDP)only if produced within the borders of the United States.

Question 15

The production of a certain good involves 5 stages.The value added after the first stage of production occurs is is $1.20.The sale price of the good is $2.50.What amount is used to measure GDP?

Accepted Answer

A) $0.025 
B) $1.20 
C) $1.30 
D) $2.50 
A) $0.025 
B) $1.20 
C) $1.30 
D) $2.50

Question 16

Constant dollars are

Accepted Answer

A) the same as current dollars. 
B) dollars corrected for general price level changes. 
C) what nominal GDP is measured in. 
D) when an individual does not receive a cost of living increase. 
A) the same as current dollars. 
B) dollars corrected for general price level changes. 
C) what nominal GDP is measured in. 
D) when an individual does not receive a cost of living increase.

Question 17

The computation of GDP by adding up all components of national income including wages,interest,rent and profits is

Accepted Answer

A) the expenditure approach. 
B) the income approach. 
C) transfer payments. 
D) the value of all securities. 
A) the expenditure approach. 
B) the income approach. 
C) transfer payments. 
D) the value of all securities.

Question 18

The most accurate way to compare standards of living throughout the world is to look at

Accepted Answer

A) total Gross Domestic Product (GDP). 
B) GNP. 
C) purchasing power parity. 
D) foreign exchange rates. 
A) total Gross Domestic Product (GDP). 
B) GNP. 
C) purchasing power parity. 
D) foreign exchange rates.

Question 19

(amounts in billions of dollars)  
-According to the above table,national income is

Accepted Answer

A) $12,637 billion. 
B) $11,968 billion. 
C) $11,943 billion. 
D) $11,866 billion. 
A) $12,637 billion. 
B) $11,968 billion. 
C) $11,943 billion. 
D) $11,866 billion.

Question 20

-Refer to the above figure.The top two arrows of the figure refer to the product markets.The bottom arrows refer to the factor markets.Which arrow represents the final consumer goods and services?

Accepted Answer

A) Arrow A 
B) Arrow B 
C) Arrow C 
D) Arrow D 
A) Arrow A 
B) Arrow B 
C) Arrow C 
D) Arrow D

A capital good is

Profits are part of the

The price-corrected value for Gross Domestic Product is

Which of the following would NOT be included in consumption expenditures when calculating GDP?

Which of the following transactions would NOT be included in GDP?

The difference between Gross Domestic Income (GDI)and Gross Domestic Product (GDP)is that

Which of the following statements is NOT true about the relationship between the dollar value of total output and total income?

The observation that goods and services flow in one direction and money payments flow in another direction is the principle behind

Which of the following is consistent with the circular flow of income? I.Goods and services flow in one direction. II.Payments and incomes flow in one direction. III.Sellers receive less than what buyers spend.

Nominal GDP is calculated using

Why must total income be identical to the dollar value of total output?

Disposable personal income is found by taking

Intermediate goods are goods that are used up entirely in the production of final goods.As such,intermediate goods

The production of a certain good involves 5 stages.The value added after the first stage of production occurs is is $1.20.The sale price of the good is $2.50.What amount is used to measure GDP?

Constant dollars are

The computation of GDP by adding up all components of national income including wages,interest,rent and profits is

The most accurate way to compare standards of living throughout the world is to look at

(amounts in billions of dollars) -According to the above table,national income is

-Refer to the above figure.The top two arrows of the figure refer to the product markets.The bottom arrows refer to the factor markets.Which arrow represents the final consumer goods and services?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 8: Measuring the Economys Performance

A capital good is

Profits are part of the

The price-corrected value for Gross Domestic Product is

Which of the following would NOT be included in consumption expenditures when calculating GDP?

Which of the following transactions would NOT be included in GDP?

The difference between Gross Domestic Income (GDI)and Gross Domestic Product (GDP)is that

Which of the following statements is NOT true about the relationship between the dollar value of total output and total income?

The observation that goods and services flow in one direction and money payments flow in another direction is the principle behind

Which of the following is consistent with the circular flow of income? I.Goods and services flow in one direction. II.Payments and incomes flow in one direction. III.Sellers receive less than what buyers spend.

Nominal GDP is calculated using

Why must total income be identical to the dollar value of total output?

Disposable personal income is found by taking

Intermediate goods are goods that are used up entirely in the production of final goods.As such,intermediate goods

The production of a certain good involves 5 stages.The value added after the first stage of production occurs is is $1.20.The sale price of the good is $2.50.What amount is used to measure GDP?

Constant dollars are

The computation of GDP by adding up all components of national income including wages,interest,rent and profits is

The most accurate way to compare standards of living throughout the world is to look at

(amounts in billions of dollars) -According to the above table,national income is

-Refer to the above figure.The top two arrows of the figure refer to the product markets.The bottom arrows refer to the factor markets.Which arrow represents the final consumer goods and services?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters