Question 1

GDP

Accepted Answer

A)  is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being. 
B)  is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being. 
C)  is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being. 
D)  is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well­being. 
A)  is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being. 
B)  is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being. 
C)  is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being. 
D)  is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well­being.

Question 2

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. In 2015, this country's

Accepted Answer

A)  nominal GDP was greater than real GDP, and the GDP deflator was greater than 100. 
B)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%. 
C)  nominal GDP was less than real GDP, and the GDP deflator was less than 100. 
D)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100. 
A)  nominal GDP was greater than real GDP, and the GDP deflator was greater than 100. 
B)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%. 
C)  nominal GDP was less than real GDP, and the GDP deflator was less than 100. 
D)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100.

Question 3

The value of the housing services provided by the economy's owner-occupied houses is

Accepted Answer

A)  included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. 
B)  included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. 
C)  excluded from GDP since these services are not sold in any market. 
D)  excluded from GDP since the value of these housing services cannot be estimated with any degree of precision. 
A)  included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. 
B)  included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. 
C)  excluded from GDP since these services are not sold in any market. 
D)  excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.

Question 4

Table 23-3
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 23-3. What was Crete's GDP in 2010?

Accepted Answer

A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839 
A)  $4623 
B)  $5731 
C)  $6037 
D)  $6839

Question 5

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

Accepted Answer

A)  household purchases of appliances. 
B)  household purchases of medical care. 
C)  household purchases of food. 
D)  All of the above are included in the consumption component of GDP. 
A)  household purchases of appliances. 
B)  household purchases of medical care. 
C)  household purchases of food. 
D)  All of the above are included in the consumption component of GDP.

Question 6

Otherwise legal transactions that go unreported or unrecorded are called

Accepted Answer

A)  the underground economy. 
B)  the shadow economy. 
C)  the informal economy. 
D)  All of the above are correct. 
A)  the underground economy. 
B)  the shadow economy. 
C)  the informal economy. 
D)  All of the above are correct.

Question 7

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A)  capital 
B)  consumption 
C)  investment 
D)  costs 
A)  capital 
B)  consumption 
C)  investment 
D)  costs

Question 8

Which of the following correctly lists what is included in the consumption component of GDP?

Accepted Answer

A)  household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B)  household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C)  household purchases of services, nondurable goods, and all durable goods 
D)  household purchases of services, nondurable goods, and durable goods other than residential construction 
A)  household purchases of services and household purchases of nondurable goods but not any household purchases of durable goods 
B)  household purchases of nondurable goods and durable goods other than residential construction but not household purchases of services 
C)  household purchases of services, nondurable goods, and all durable goods 
D)  household purchases of services, nondurable goods, and durable goods other than residential construction

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 2010, this country's nominal GDP was

Accepted Answer

A)  $260. 
B)  $440. 
C)  $620. 
D)  $760. 
A)  $260. 
B)  $440. 
C)  $620. 
D)  $760.

Question 11

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

Accepted Answer

A)  U.S. consumption falls by $500, U.S. net exports decline by $500, and U.S. GDP declines by $1000. 
B)  U.S. consumption does not change, U.S. net exports decline by $500, and U.S. GDP declines by $500. 
C)  U.S. consumption increases by $500, U.S. net exports remain the same, and U.S. GDP increases by $500. 
D)  U.S. consumption increases by $500, U.S. net exports decline by $500, and U.S. GDP remains the same. 
A)  U.S. consumption falls by $500, U.S. net exports decline by $500, and U.S. GDP declines by $1000. 
B)  U.S. consumption does not change, U.S. net exports decline by $500, and U.S. GDP declines by $500. 
C)  U.S. consumption increases by $500, U.S. net exports remain the same, and U.S. GDP increases by $500. 
D)  U.S. consumption increases by $500, U.S. net exports decline by $500, and U.S. GDP remains the same.

Question 12

Which of the following domestically produced items is not included in GDP?

Accepted Answer

A)  a bottle of shampoo 
B)  a hairdryer 
C)  a haircut 
D)  All of the above are included in GDP. 
A)  a bottle of shampoo 
B)  a hairdryer 
C)  a haircut 
D)  All of the above are included in GDP.

Question 13

Table 23-3
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 23-3. What were Crete's government purchases in 2010?

Accepted Answer

A)  $1130 
B)  $1601 
C)  $1837 
D)  $2544 
A)  $1130 
B)  $1601 
C)  $1837 
D)  $2544

Question 14

The GDP deflator can be used to take inflation out of nominal GDP.

Accepted Answer

A) True 
 B)False

Question 15

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Accepted Answer

GDP = C + I + G + NX = $5.5 tr

Question 16

Total income from the domestic production of final goods and services equals

Accepted Answer

A)  only household expenditures for these goods. 
B)  only household and business expenditures for these goods. 
C)  only household and government expenditures for these goods. 
D)  the expenditures for these goods whoever buys them. 
A)  only household expenditures for these goods. 
B)  only household and business expenditures for these goods. 
C)  only household and government expenditures for these goods. 
D)  the expenditures for these goods whoever buys them.

Question 17

The percentage change in the price level from one period to another is called

Accepted Answer

A)  the growth rate. 
B)  the inflation rate. 
C)  the GDP deflator. 
D)  the unemployment rate. 
A)  the growth rate. 
B)  the inflation rate. 
C)  the GDP deflator. 
D)  the unemployment rate.

Question 18

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

Accepted Answer

A)  $553 
B)  $1198 
C)  $1975 
D)  $2752 
A)  $553 
B)  $1198 
C)  $1975 
D)  $2752

Question 19

Which of the following is included in government purchases?

Accepted Answer

A)  unemployment benefits a state pays 
B)  Social Security payments the U.S. government makes 
C)  the services of a U.S. government attorney valued at the cost of her salary 
D)  All of the above are correct. 
A)  unemployment benefits a state pays 
B)  Social Security payments the U.S. government makes 
C)  the services of a U.S. government attorney valued at the cost of her salary 
D)  All of the above are correct.

Question 20

Consumption consists of spending by households on goods and services, with the exception of

Accepted Answer

A)  purchases of intangible services. 
B)  purchases of durable goods. 
C)  purchases of new houses. 
D)  spending on education. 
A)  purchases of intangible services. 
B)  purchases of durable goods. 
C)  purchases of new houses. 
D)  spending on education.

Exam 15: Measuring a Nations Income

GDP

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. In 2015, this country's

The value of the housing services provided by the economy's owner-occupied houses is

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's GDP in 2010?

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

Otherwise legal transactions that go unreported or unrecorded are called

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Which of the following correctly lists what is included in the consumption component of GDP?

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

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 2010, this country's nominal GDP was

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

Which of the following domestically produced items is not included in GDP?

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's government purchases in 2010?

The GDP deflator can be used to take inflation out of nominal GDP.

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Total income from the domestic production of final goods and services equals

The percentage change in the price level from one period to another is called

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

Which of the following is included in government purchases?

Consumption consists of spending by households on goods and services, with the exception of

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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