Question 1

Which of the following statements is true?

Accepted Answer

A) A decrease in the crime rate increases GDP as people will spend more on security. 
B) Household production is counted in GDP as it amounts to real production. 
C) GDP accounting rules do not adjust for production that pollutes the economy. 
D) GDP growth distributes income equally to people in the economy. 
A) A decrease in the crime rate increases GDP as people will spend more on security. 
B) Household production is counted in GDP as it amounts to real production. 
C) GDP accounting rules do not adjust for production that pollutes the economy. 
D) GDP growth distributes income equally to people in the economy.

Question 2

Table 12-10
   Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 12-10.Nominal GDP for Vicuna for 2009 equals

Accepted Answer

A) $4,920. 
B) $5,100. 
C) $5,300. 
D) $5,850. 
A) $4,920. 
B) $5,100. 
C) $5,300. 
D) $5,850.

Question 3

Scenario 12-1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 12-1.The value of each canoe in gross domestic product equals

Accepted Answer

A) $1,200. 
B) $800. 
C) $500. 
D) $400. 
A) $1,200. 
B) $800. 
C) $500. 
D) $400.

Question 4

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

Accepted Answer

A) True 
 B)False

Question 5

In the United States,households were saving about ________ of their income in the mid 1980s,and by 2005,saving ________.

Accepted Answer

A) 5 percent;increased to 25 percent 
B) 10 percent;dropped to about 1 percent. 
C) 2 percent;dropped to negative 15 percent. 
D) 64 percent;increased to 70 percent. 
A) 5 percent;increased to 25 percent 
B) 10 percent;dropped to about 1 percent. 
C) 2 percent;dropped to negative 15 percent. 
D) 64 percent;increased to 70 percent.

Question 6

Suppose that in 2011,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2011 is

Accepted Answer

A) $185 billion. 
B) $215 billion. 
C) $220 billion. 
D) $245 billion. 
A) $185 billion. 
B) $215 billion. 
C) $220 billion. 
D) $245 billion.

Question 7

Presently,GDP is ________ to compensate for the costs of environmental damage.

Accepted Answer

A) fully adjusted 
B) partially adjusted 
C) adjusted on a chain-weight basis 
D) not adjusted 
A) fully adjusted 
B) partially adjusted 
C) adjusted on a chain-weight basis 
D) not adjusted

Question 8

Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

Accepted Answer

A) True 
 B)False

Question 9

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Accepted Answer

A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent 
A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent

Question 10

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following goods is directly counted in GDP?

Accepted Answer

A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches 
A) the lettuce that Subway purchases for its sandwiches 
B) the bread that Subway purchases for its sandwiches 
C) a 12-inch Subway sandwich purchased by a student 
D) the plastic bags that Subway purchases to wrap its sandwiches

Question 12

Which of the following is included in both the U.S.GDP and U.S.GNP?

Accepted Answer

A) the value of all cars produced by General Motors in the United States 
B) the value of all cars produced by Ford in Mexico 
C) the value of all cars produced by Toyota in the United States 
D) the value of all cars produced by Nissan in Japan and the United States 
A) the value of all cars produced by General Motors in the United States 
B) the value of all cars produced by Ford in Mexico 
C) the value of all cars produced by Toyota in the United States 
D) the value of all cars produced by Nissan in Japan and the United States

Question 13

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP

Accepted Answer

A) True 
 B)False

Question 14

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

Accepted Answer

A) 5% higher in year 2 than in year 1. 
B) 105% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2. 
A) 5% higher in year 2 than in year 1. 
B) 105% higher in year 2 than in year 1. 
C) 5% higher in year 1 than in year 2. 
D) 105% higher in year 1 than in year 2.

Question 15

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production. 
A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production.

Which of the following statements is true?

Table 12-10 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 12-10.Nominal GDP for Vicuna for 2009 equals

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

In the United States,households were saving about of their income in the mid 1980s,and by 2005,saving .

Suppose that in 2011,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2011 is

Presently,GDP is ________ to compensate for the costs of environmental damage.

Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Which of the following goods is directly counted in GDP?

Which of the following is included in both the U.S.GDP and U.S.GNP?

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

Gross domestic product understates the total production of final goods and services because of the omission of

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

Exam 12: GDP: Measuring Total Production and Income

Which of the following statements is true?

Table 12-10 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 12-10.Nominal GDP for Vicuna for 2009 equals

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

In the United States,households were saving about ________ of their income in the mid 1980s,and by 2005,saving ________.

Suppose that in 2011,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2011 is

Presently,GDP is ________ to compensate for the costs of environmental damage.

Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Which of the following goods is directly counted in GDP?

Which of the following is included in both the U.S.GDP and U.S.GNP?

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

Gross domestic product understates the total production of final goods and services because of the omission of

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

In the United States,households were saving about of their income in the mid 1980s,and by 2005,saving .