Question 1

If real GDP doubles and the GDP deflator doubles, then nominal GDP

Accepted Answer

A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples. 
A)  remains constant. 
B)  doubles. 
C)  triples. 
D)  quadruples.

Question 2

U.S. GDP

Accepted Answer

A)  includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
A)  includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries. 
B)  includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries. 
C)  excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries. 
D)  excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.

Question 3

For an economy as a whole, income must exceed expenditure.

Accepted Answer

A) True 
 B)False

Question 4

Figure 23-2.  
-Refer to Figure 23-2. List the locations associated with the flow of inputs and outputs.

Accepted Answer

The answer of Figure 23-2.  
-Refer to Figure 23-2....

Question 5

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 6

In a simple circular-flow diagram, firms use the money they get from a sale to

Accepted Answer

A)  pay wages to workers. 
B)  pay rent to landlords. 
C)  pay profit to the firms' owners. 
D)  All of the above are correct. 
A)  pay wages to workers. 
B)  pay rent to landlords. 
C)  pay profit to the firms' owners. 
D)  All of the above are correct.

Question 7

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 2011, this country's GDP deflator was

Accepted Answer

A)  57.9. 
B)  100.0. 
C)  137.5. 
D)  169.2. 
A)  57.9. 
B)  100.0. 
C)  137.5. 
D)  169.2.

Question 8

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Accepted Answer

A)  both real GDP and nominal GDP. 
B)  real GDP but not nominal GDP. 
C)  nominal GDP but not real GDP. 
D)  neither nominal GDP nor real GDP. 
A)  both real GDP and nominal GDP. 
B)  real GDP but not nominal GDP. 
C)  nominal GDP but not real GDP. 
D)  neither nominal GDP nor real GDP.

Question 9

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices. 
A)  nominal GDP from the base year that cannot be attributable to a change in real GDP. 
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP. 
C)  nominal GDP from the base year that cannot be attributable to a change in prices. 
D)  real GDP from the base year that cannot be attributable to a change in prices.

Question 10

Which of the following is included in Singapore's GDP?

Accepted Answer

A)  The value of production by a Singaporean working in the U.S. 
B)  The value of production by an American working in Singapore 
C)  The value of production by a Singaporean that crosses the border to work in Malaysia. 
D)  All of the above are correct. 
A)  The value of production by a Singaporean working in the U.S. 
B)  The value of production by an American working in Singapore 
C)  The value of production by a Singaporean that crosses the border to work in Malaysia. 
D)  All of the above are correct.

Question 11

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

Accepted Answer

A)  $0 
B)  $10,000 
C)  $12,000 
D)  $22,000 
A)  $0 
B)  $10,000 
C)  $12,000 
D)  $22,000

Question 12

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 13

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 2016 to 2017 was

Accepted Answer

A)  25.0%. 
B)  23.1%. 
C)  26.1%. 
D)  18.8%. 
A)  25.0%. 
B)  23.1%. 
C)  26.1%. 
D)  18.8%.

Question 14

In the equation Y = C + I + G + NX,

Accepted Answer

A)  Y represents the economy's total expenditure. 
B)  C represents household expenditures on services and durable goods. 
C)  all of the variables are always positive numbers. 
D)  All of the above are correct. 
A)  Y represents the economy's total expenditure. 
B)  C represents household expenditures on services and durable goods. 
C)  all of the variables are always positive numbers. 
D)  All of the above are correct.

Question 15

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 2011, this country's real GDP was

Accepted Answer

A)  $320. 
B)  $440. 
C)  $760. 
D)  $770. 
A)  $320. 
B)  $440. 
C)  $760. 
D)  $770.

Question 16

Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

Accepted Answer

A)  $1 
B)  $19 
C)  $20 
D)  $21 
A)  $1 
B)  $19 
C)  $20 
D)  $21

Question 17

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 18

Which of the following items is included in U.S. GDP?

Accepted Answer

A)  the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S. GDP. 
A)  the estimated value of production accomplished at home, such as backyard production of fruits and vegetables 
B)  the value of illegally-produced goods and services 
C)  the value of cars and trucks produced in foreign countries and sold in the U.S. 
D)  None of the above is included in U.S. GDP.

Question 19

Expenditures by households on education are included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 20

In the base year, the GDP deflator is always

Accepted Answer

A)  -1. 
B)  0. 
C)  1. 
D)  100. 
A)  -1. 
B)  0. 
C)  1. 
D)  100.

Exam 15: Measuring a Nations Income

If real GDP doubles and the GDP deflator doubles, then nominal GDP

U.S. GDP

For an economy as a whole, income must exceed expenditure.

Figure 23-2. -Refer to Figure 23-2. List the locations associated with the flow of inputs and outputs.

Which of the following statements about GDP is correct?

In a simple circular-flow diagram, firms use the money they get from a sale to

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 2011, this country's GDP deflator was

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

The GDP deflator for years subsequent to the base year measures the change in

Which of the following is included in Singapore's GDP?

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

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,

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 2016 to 2017 was

In the equation Y = C + I + G + NX,

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 2011, this country's real GDP was

Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

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.

Which of the following items is included in U.S. GDP?

Expenditures by households on education are included in the consumption component of GDP.

In the base year, the GDP deflator is always

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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