Question 1

Which component of GDP includes spending on new structures and equipment?

Accepted Answer

The answer of Which component of GDP includes spending on...

Question 2

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 3

U.S. GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 4

Figure 23-1.  
-Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

Accepted Answer

A)  markets for factors of production and markets for goods and services 
B)  firms and households 
C)  GDP deflator and CPI 
D)  flow of dollars and flow of inputs and outputs 
A)  markets for factors of production and markets for goods and services 
B)  firms and households 
C)  GDP deflator and CPI 
D)  flow of dollars and flow of inputs and outputs

Question 5

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
  
-Refer to Table 23-10. In which year was this country's nominal GDP highest?

Accepted Answer

A)  2014 
B)  2015 
C)  2016 
D)  2017 
A)  2014 
B)  2015 
C)  2016 
D)  2017

Question 6

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Accepted Answer

A)  1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
B)  1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
C)  6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
D)  6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
A)  1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
B)  1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP. 
C)  6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP. 
D)  6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.

Question 7

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 investment in 2010?

Accepted Answer

A)  $1178 
B)  $1295 
C)  $1882 
D)  $1999 
A)  $1178 
B)  $1295 
C)  $1882 
D)  $1999

Question 8

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

Accepted Answer

A)  When she babysits for her sister and when she babysits for someone else. 
B)  When she babysits for her sister, but not when she babysits for someone else. 
C)  When she babysits for someone else, but not when she babysits for her sister. 
D)  Neither when she babysits for her sister nor for someone else. 
A)  When she babysits for her sister and when she babysits for someone else. 
B)  When she babysits for her sister, but not when she babysits for someone else. 
C)  When she babysits for someone else, but not when she babysits for her sister. 
D)  Neither when she babysits for her sister nor for someone else.

Question 9

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Accepted Answer

A)  consumption, investment and imports 
B)  only consumption and investment 
C)  only consumption and imports 
D)  only investment and imports 
A)  consumption, investment and imports 
B)  only consumption and investment 
C)  only consumption and imports 
D)  only investment and imports

Question 10

Which of the following transactions adds to U.S. GDP for 2015?

Accepted Answer

A)  In 2015, Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The 2000 pounds of cheese remains in Frank's inventory at the end of 2015. 
B)  An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time. 
C)  When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,500 per month. 
D)  All of the above transactions add to U.S. GDP for 2015. 
A)  In 2015, Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The 2000 pounds of cheese remains in Frank's inventory at the end of 2015. 
B)  An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time. 
C)  When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,500 per month. 
D)  All of the above transactions add to U.S. GDP for 2015.

Question 11

Which of the following transactions adds to U.S. GDP for 2015?

Accepted Answer

A)  In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000. 
B)  An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time. 
C)  When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month. 
D)  None of the above transactions adds to U.S. GDP for 2015. 
A)  In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000. 
B)  An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time. 
C)  When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month. 
D)  None of the above transactions adds to U.S. GDP for 2015.

Question 12

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

Accepted Answer

A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion. 
A)  $6.7 billion. 
B)  $15 billion. 
C)  $21.6 billion. 
D)  $38 billion.

Question 13

A recession has traditionally been defined as a period during which

Accepted Answer

A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters. 
A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters.

Question 14

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 15

Table 23-1
The table below contains data for Chereaux for the year 2015.
  
-Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

Accepted Answer

A)  $214. 
B)  $200. 
C)  $204. 
D)  $230. 
A)  $214. 
B)  $200. 
C)  $204. 
D)  $230.

Question 16

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Accepted Answer

A)  $150 to GDP. 
B)  $250 to GDP. 
C)  between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. 
D)  $400 to GDP. 
A)  $150 to GDP. 
B)  $250 to GDP. 
C)  between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. 
D)  $400 to GDP.

Question 17

Which of the following items is counted as part of government purchases?

Accepted Answer

A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas, Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct. 
A)  The federal government pays the salary of a Navy officer. 
B)  The state of Nevada pays a private firm to repair a Nevada state highway. 
C)  The city of Las Vegas, Nevada pays a private firm to collect garbage in that city. 
D)  All of the above are correct.

Question 18

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP?

Accepted Answer

A)  $8,000 
B)  $15,000 
C)  $17,000 
D)  $13,000 
A)  $8,000 
B)  $15,000 
C)  $17,000 
D)  $13,000

Question 19

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 GDP in 2010?

Accepted Answer

A)  $6359 
B)  $7136 
C)  $7253 
D)  $8147 
A)  $6359 
B)  $7136 
C)  $7253 
D)  $8147

Question 20

In the GDP accounts production equals

Accepted Answer

A)  income. 
B)  income + saving. 
C)  income - government expenditures. 
D)  income - imports. 
A)  income. 
B)  income + saving. 
C)  income - government expenditures. 
D)  income - imports.

Exam 15: Measuring a Nations Income

Which component of GDP includes spending on new structures and equipment?

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

U.S. GDP excludes the production of most illegal goods.

Figure 23-1. -Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's nominal GDP highest?

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

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 investment in 2010?

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Which of the following transactions adds to U.S. GDP for 2015?

Which of the following transactions adds to U.S. GDP for 2015?

If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

A recession has traditionally been defined as a period during which

Microeconomics and macroeconomics are closely linked.

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Which of the following items is counted as part of government purchases?

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP?

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 GDP in 2010?

In the GDP accounts production equals

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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