Question 1

GDP measures the total income of everyone and the total spending by everyone in the economy.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of a final good or service?

Accepted Answer

A) wheat a bakery purchases to make bread 
B) coffee beans Starbucks purchases to make coffee 
C) lumber purchased by a construction company to used in building houses 
D) a computer purchased by Federal Express to track shipments 
A) wheat a bakery purchases to make bread 
B) coffee beans Starbucks purchases to make coffee 
C) lumber purchased by a construction company to used in building houses 
D) a computer purchased by Federal Express to track shipments

Question 3

What should be subtracted from GDP to calculate national income?

Accepted Answer

A) depreciation 
B) indirect taxes 
C) personal income taxes 
D) net factor payments to the rest of the world 
A) depreciation 
B) indirect taxes 
C) personal income taxes 
D) net factor payments to the rest of the world

Question 4

If national income is $600 billion,personal income is $400 billion,personal taxes are $120 billion,then disposable income equals

Accepted Answer

A) $480 billion. 
B) $320 billion. 
C) $280 billion. 
D) $80 billion. 
A) $480 billion. 
B) $320 billion. 
C) $280 billion. 
D) $80 billion.

Question 5

Total income in the economy can sometimes be greater than total spending.

Accepted Answer

A) True 
 B)False

Question 6

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1  
-Refer to Table 6.1.The value for gross private domestic investment in billions of dollars is

Accepted Answer

A) 300. 
B) 375. 
C) 425. 
D) 450. 
A) 300. 
B) 375. 
C) 425. 
D) 450.

Question 7

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.The value for this economy's nominal GDP in year 3 is

Accepted Answer

A) $204. 
B) $222. 
C) $250. 
D) $270. 
A) $204. 
B) $222. 
C) $250. 
D) $270.

Question 8

The costs of pollution are subtracted from the value of final sales before calculating GDP.

Accepted Answer

A) True 
 B)False

Question 9

If real GDP increased during a year,then output must have increased.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT included in 2013's GDP?

Accepted Answer

A) the value of a motorcycle produced in the United States and exported to Japan 
B) the profit earned in 2013 from selling a stock that you purchased in 2008 
C) the value of a motor that is used in the production of a lawn mower 
D) the commission earned by a headhunter when she locates a job for a client 
A) the value of a motorcycle produced in the United States and exported to Japan 
B) the profit earned in 2013 from selling a stock that you purchased in 2008 
C) the value of a motor that is used in the production of a lawn mower 
D) the commission earned by a headhunter when she locates a job for a client

Question 11

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5  
-Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 2 is

Accepted Answer

A) 93.9. 
B) 100. 
C) 106.5. 
D) 179. 
A) 93.9. 
B) 100. 
C) 106.5. 
D) 179.

Question 12

Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.

Accepted Answer

A) True 
 B)False

Question 13

If the personal saving rate is 5% and personal saving is $10 billion,the value of personal disposable income

Accepted Answer

A) is $100 billion. 
B) is $200 billion. 
C) is $500 billion. 
D) cannot be determined from this information. 
A) is $100 billion. 
B) is $200 billion. 
C) is $500 billion. 
D) cannot be determined from this information.

Question 14

The change in business inventories is measured as

Accepted Answer

A) final sales minus GDP. 
B) final sales plus GDP. 
C) GDP minus final sales. 
D) the ratio of final sales to GDP. 
A) final sales minus GDP. 
B) final sales plus GDP. 
C) GDP minus final sales. 
D) the ratio of final sales to GDP.

Question 15

The largest income component of GDP is

Accepted Answer

A) proprietors' income. 
B) rental income. 
C) compensation of employees. 
D) corporate profit. 
A) proprietors' income. 
B) rental income. 
C) compensation of employees. 
D) corporate profit.

Question 16

Disposable personal income is personal income minus personal taxes.

Accepted Answer

A) True 
 B)False

Question 17

If GDP is $300 billion,depreciation is $30 billion,and net factor income from the rest of the world is -$40 billion,then net national product is

Accepted Answer

A) $230 billion. 
B) $270 billion. 
C) $290 billion. 
D) $310 billion. 
A) $230 billion. 
B) $270 billion. 
C) $290 billion. 
D) $310 billion.

Question 18

Refer to the information provided in Table 6.2 below to answer the questions that follow.
Table 6.2  
-Refer to Table 6.2.The value for gross domestic product in billions of dollars is

Accepted Answer

A) 2,900. 
B) 3,140. 
C) 3,440. 
D) 3,650. 
A) 2,900. 
B) 3,140. 
C) 3,440. 
D) 3,650.

Question 19

If personal income is $925 billion and personal income taxes are $70 billion,the value of disposable personal income is

Accepted Answer

A) $835 billion. 
B) $855 billion. 
C) $890 billion. 
D) $995 billion. 
A) $835 billion. 
B) $855 billion. 
C) $890 billion. 
D) $995 billion.

Question 20

The difference between GNP and GDP is depreciation.

Accepted Answer

A) True 
 B)False

Exam 6: Measuring National Output and National Income

GDP measures the total income of everyone and the total spending by everyone in the economy.

Which of the following is an example of a final good or service?

What should be subtracted from GDP to calculate national income?

If national income is $600 billion,personal income is $400 billion,personal taxes are $120 billion,then disposable income equals

Total income in the economy can sometimes be greater than total spending.

Refer to the information provided in Table 6.1 below to answer the questions that follow. Table 6.1 -Refer to Table 6.1.The value for gross private domestic investment in billions of dollars is

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.The value for this economy's nominal GDP in year 3 is

The costs of pollution are subtracted from the value of final sales before calculating GDP.

If real GDP increased during a year,then output must have increased.

Which of the following is NOT included in 2013's GDP?

Refer to the information provided in Table 6.5 below to answer the questions that follow. Table 6.5 -Refer to Table 6.5.Assume that this economy produces only two goods Good X and Good Y.If year 1 is the base year,the value for this economy's GDP deflator in year 2 is

Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.

If the personal saving rate is 5% and personal saving is $10 billion,the value of personal disposable income

The change in business inventories is measured as

The largest income component of GDP is

Disposable personal income is personal income minus personal taxes.

If GDP is $300 billion,depreciation is $30 billion,and net factor income from the rest of the world is -$40 billion,then net national product is

Refer to the information provided in Table 6.2 below to answer the questions that follow. Table 6.2 -Refer to Table 6.2.The value for gross domestic product in billions of dollars is

If personal income is $925 billion and personal income taxes are $70 billion,the value of disposable personal income is

The difference between GNP and GDP is depreciation.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Unemployment, inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade,comparative Advantage,and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

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