Question 1

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 2

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Accepted Answer

A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  may have increased, decreased, or stayed the same. 
A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  may have increased, decreased, or stayed the same.

Question 3

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Accepted Answer

A)  market prices. 
B)  statistical estimates of the value of goods and services to consumers. 
C)  prices based on the assumption that producers make no profits. 
D)  the maximum amount consumers would be willing to pay. 
A)  market prices. 
B)  statistical estimates of the value of goods and services to consumers. 
C)  prices based on the assumption that producers make no profits. 
D)  the maximum amount consumers would be willing to pay.

Question 4

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 5

Table 23-2
The table below contains data for country A for the year 2010.
  
-Refer to Table 23-2. What was country A's consumption in 2010?

Accepted Answer

A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015 
A)  $2018 
B)  $3010 
C)  $3311 
D)  $4015

Question 6

In the economy of Talikastan in 2015, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Talikastan's net exports in 2015?

Accepted Answer

A)  -$200 
B)  $200 
C)  $1800 
D)  Net exports cannot be calculated from the information given. 
A)  -$200 
B)  $200 
C)  $1800 
D)  Net exports cannot be calculated from the information given.

Question 7

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)  The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP. 
B)  The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP. 
C)  The 2015 sale increased 2015 GDP by $255,000; and caused 2007 GDP to be revised downward by $20,000. 
D)  The 2015 sale affected neither 2007 GDP nor 2015 GDP. 
A)  The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP. 
B)  The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP. 
C)  The 2015 sale increased 2015 GDP by $255,000; and caused 2007 GDP to be revised downward by $20,000. 
D)  The 2015 sale affected neither 2007 GDP nor 2015 GDP.

Question 8

What measure of GDP shows the value of goods and services produced if we valued these good and services at the prices that prevailed in some specific year in the past?

Accepted Answer

The answer of What measure of GDP shows the value...

Question 9

Which of the following is included in the calculation of GDP?

Accepted Answer

A)  The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country. 
B)  The purchase of a new edition of a foreign textbook that was produced in a different nation. 
C)  The purchase of ink and paper supplies by a textbook company for the production of new textbooks. 
D)  The purchase of a used textbook from a friend who took the same class last year. 
A)  The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country. 
B)  The purchase of a new edition of a foreign textbook that was produced in a different nation. 
C)  The purchase of ink and paper supplies by a textbook company for the production of new textbooks. 
D)  The purchase of a used textbook from a friend who took the same class last year.

Question 10

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 11

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

Accepted Answer

A)  included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B)  included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C)  included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it. 
D)  not included in GDP whether Susan pays Speedy lube to change it or she changes it herself. 
A)  included in GDP whether Susan pays Speedy Lube to change it or changes it herself. 
B)  included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. 
C)  included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it. 
D)  not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Question 12

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 13

In the economy of Talikastan in 2015, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Talikastan's net exports in 2015?

Accepted Answer

A)  -$250 
B)  $250 
C)  $2200 
D)  Net exports cannot be calculated from the information given. 
A)  -$250 
B)  $250 
C)  $2200 
D)  Net exports cannot be calculated from the information given.

Question 14

A transfer payment is

Accepted Answer

A)  a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B)  a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C)  a form of government spending that is not made in exchange for a currently produced good or service. 
D)  the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure. 
A)  a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. 
B)  a payment that is automatically transferred from your bank account to pay a bill or some other obligation. 
C)  a form of government spending that is not made in exchange for a currently produced good or service. 
D)  the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.

Question 15

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment 
A)  consumption of durable goods 
B)  consumption of nondurable goods 
C)  consumption of services 
D)  investment

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. This country's inflation rate from 2010 to 2011 was

Accepted Answer

A)  1.38%. 
B)  38.20%. 
C)  138.20%. 
D)  41.90. 
A)  1.38%. 
B)  38.20%. 
C)  138.20%. 
D)  41.90.

Question 17

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

Question 18

In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015?

Accepted Answer

A)  $1200 
B)  $1900 
C)  $2500 
D)  $4500 
A)  $1200 
B)  $1900 
C)  $2500 
D)  $4500

Question 19

If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.

Accepted Answer

A) True 
 B)False

Question 20

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. This country's inflation rate from 2012 to 2013 was

Accepted Answer

A)  35.6%. 
B)  25.8%. 
C)  34.8%. 
D)  100.0%. 
A)  35.6%. 
B)  25.8%. 
C)  34.8%. 
D)  100.0%.

Exam 15: Measuring a Nations Income

Macroeconomists study

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

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?

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's consumption in 2010?

In the economy of Talikastan in 2015, consumption was $800, GDP was $2000, government purchases were $400, and investment was $600. What were Talikastan's net exports in 2015?

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

What measure of GDP shows the value of goods and services produced if we valued these good and services at the prices that prevailed in some specific year in the past?

Which of the following is included in the calculation of GDP?

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?

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

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

In the economy of Talikastan in 2015, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Talikastan's net exports in 2015?

A transfer payment is

Household spending on education is counted in which component or subcomponent of GDP?

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. This country's inflation rate from 2010 to 2011 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.

In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015?

If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.

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. This country's inflation rate from 2012 to 2013 was

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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