Question 1

Which of the following is a good or service counted in GDP?

Accepted Answer

A) tires Ford buys to put on a car 
B) a used tire you buy for your personal car 
C) a new tire you buy for your personal car 
D) used tires bought by a used car dealer to put on a car on his lot 
A) tires Ford buys to put on a car 
B) a used tire you buy for your personal car 
C) a new tire you buy for your personal car 
D) used tires bought by a used car dealer to put on a car on his lot

Question 2

Double counting can be avoided by

Accepted Answer

A) including the value of intermediate goods in the current year. 
B) not counting the value of intermediate goods in GDP. 
C) including the value of intermediate goods in the GNP but not in the GDP. 
D) including the value of intermediate goods in the production year but not in the selling year of those goods. 
A) including the value of intermediate goods in the current year. 
B) not counting the value of intermediate goods in GDP. 
C) including the value of intermediate goods in the GNP but not in the GDP. 
D) including the value of intermediate goods in the production year but not in the selling year of those goods.

Question 3

Net investment is

Accepted Answer

A) gross investment minus depreciation. 
B) gross investment plus depreciation. 
C) depreciation minus gross investment. 
D) GNP minus final sales. 
A) gross investment minus depreciation. 
B) gross investment plus depreciation. 
C) depreciation minus gross investment. 
D) GNP minus final sales.

Question 4

Refer to the information provided in Table 6.3 below to answer the questions that follow.
Table 6.3  
-Refer to Table 6.3.The value for gross domestic product in billions of dollars is

Accepted Answer

A) 485. 
B) 680. 
C) 685. 
D) 710. 
A) 485. 
B) 680. 
C) 685. 
D) 710.

Question 5

Gross domestic product measures

Accepted Answer

A) the total spending of everyone in the economy. 
B) the value of all output in the economy. 
C) the total income of everyone in the economy. 
D) all of the above 
A) the total spending of everyone in the economy. 
B) the value of all output in the economy. 
C) the total income of everyone in the economy. 
D) all of the above

Question 6

If the change in business inventories is zero,then final sales are

Accepted Answer

A) zero. 
B) less than GDP. 
C) greater than GDP. 
D) equal to GDP. 
A) zero. 
B) less than GDP. 
C) greater than GDP. 
D) equal to GDP.

Question 7

Refer to the information provided in Table 6.3 below to answer the questions that follow.
Table 6.3  
-Refer to Table 6.3.The value of net factor payments to the rest of the world is

Accepted Answer

A) 5. 
B) 15. 
C) 25. 
D) 35. 
A) 5. 
B) 15. 
C) 25. 
D) 35.

Question 8

In 2012,GDP was exactly equal to final sales.This implies that

Accepted Answer

A) there was accumulation of inventories that year. 
B) there was a decline in inventories that year. 
C) there was no change in inventories that year. 
D) GDP did not grow that year compared to the year before. 
A) there was accumulation of inventories that year. 
B) there was a decline in inventories that year. 
C) there was no change in inventories that year. 
D) GDP did not grow that year compared to the year before.

Question 9

In 2012 final sales equal $200 billion,and the change in business inventories is $50 billion.GDP in 2012

Accepted Answer

A) is $250 billion. 
B) is $200 billion. 
C) is $150 billion. 
D) is $40 billion. 
A) is $250 billion. 
B) is $200 billion. 
C) is $150 billion. 
D) is $40 billion.

Question 10

If GNP is $600 billion,receipts of factor income from the rest of the world are $50 billion,and payments of factor income to the rest of the world are $30 billion,then GDP is

Accepted Answer

A) $520 billion. 
B) $580 billion. 
C) $620 billion. 
D) $680 billion. 
A) $520 billion. 
B) $580 billion. 
C) $620 billion. 
D) $680 billion.

Question 11

Gross national income is

Accepted Answer

A) GNP converted into dollars using an average exchange rate over several years adjusted for rates of inflation. 
B) GDP converted into dollars using an average exchange rate over several years adjusted for rates of inflation. 
C) GNP measured using an incomes approach. 
D) GNP divided by population. 
A) GNP converted into dollars using an average exchange rate over several years adjusted for rates of inflation. 
B) GDP converted into dollars using an average exchange rate over several years adjusted for rates of inflation. 
C) GNP measured using an incomes approach. 
D) GNP divided by population.

Question 12

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 private domestic investment in billions of dollars is

Accepted Answer

A) 740. 
B) 810. 
C) 850. 
D) 890. 
A) 740. 
B) 810. 
C) 850. 
D) 890.

Question 13

If GDP is $500 billion and depreciation is $40 billion,then net national product

Accepted Answer

A) is $460 billion. 
B) is $500 billion. 
C) is $540 billion. 
D) cannot be determined from this information. 
A) is $460 billion. 
B) is $500 billion. 
C) is $540 billion. 
D) cannot be determined from this information.

Question 14

Which of the following is NOT counted in the GNP of the United States?

Accepted Answer

A) The wage of a U.S.citizen who works in a foreign country for a foreign firm. 
B) The interest earned by a U.S.bank on loans to a business firm located in Brazil. 
C) The profit earned by a restaurant located in the United States but owned by a Mexican company. 
D) The value of services that are produced by state and local governments in the United States. 
A) The wage of a U.S.citizen who works in a foreign country for a foreign firm. 
B) The interest earned by a U.S.bank on loans to a business firm located in Brazil. 
C) The profit earned by a restaurant located in the United States but owned by a Mexican company. 
D) The value of services that are produced by state and local governments in the United States.

Question 15

Gross national product is the total market value of

Accepted Answer

A) all final and intermediate goods and service produced by resources owned by a country in a given year. 
B) all final and intermediate goods and services produced in a country,regardless of who owns the resources. 
C) all final goods and services produced in a country in a given year,regardless of who owns the resources. 
D) all final goods and services produced by resources owned by a country,regardless of where production takes place. 
A) all final and intermediate goods and service produced by resources owned by a country in a given year. 
B) all final and intermediate goods and services produced in a country,regardless of who owns the resources. 
C) all final goods and services produced in a country in a given year,regardless of who owns the resources. 
D) all final goods and services produced by resources owned by a country,regardless of where production takes place.

Question 16

If in a year there is a positive inventory investment,then final sales

Accepted Answer

A) exceed GDP. 
B) are less than GDP. 
C) equal GDP. 
D) are zero. 
A) exceed GDP. 
B) are less than GDP. 
C) equal GDP. 
D) are zero.

Question 17

Personal income is national income minus

Accepted Answer

A) depreciation. 
B) net factor income to the rest of the world. 
C) the amount of national income not going to households. 
D) imports. 
A) depreciation. 
B) net factor income to the rest of the world. 
C) the amount of national income not going to households. 
D) imports.

Question 18

If gross investment in 2012 is $750 billion and depreciation in 2012 is $850 billion,net investment in 2012 is

Accepted Answer

A) -$50 billion. 
B) -$100 billion. 
C) -$800 billion. 
D) -$1,600 billion. 
A) -$50 billion. 
B) -$100 billion. 
C) -$800 billion. 
D) -$1,600 billion.

Question 19

If the GDP deflator is greater than 100,then

Accepted Answer

A) nominal GDP is greater than real GDP. 
B) nominal GDP is lower than real GDP. 
C) nominal GDP equals real GDP. 
D) prices decreased by more than half between the current and the base years. 
A) nominal GDP is greater than real GDP. 
B) nominal GDP is lower than real GDP. 
C) nominal GDP equals real GDP. 
D) prices decreased by more than half between the current and the base years.

Question 20

Exports equal

Accepted Answer

A) imports - net exports. 
B) net exports + imports. 
C) net exports - imports. 
D) imports + (exports + imports). 
A) imports - net exports. 
B) net exports + imports. 
C) net exports - imports. 
D) imports + (exports + imports).

Exam 6: Measuring National Output and National Income

Which of the following is a good or service counted in GDP?

Double counting can be avoided by

Net investment is

Refer to the information provided in Table 6.3 below to answer the questions that follow. Table 6.3 -Refer to Table 6.3.The value for gross domestic product in billions of dollars is

Gross domestic product measures

If the change in business inventories is zero,then final sales are

Refer to the information provided in Table 6.3 below to answer the questions that follow. Table 6.3 -Refer to Table 6.3.The value of net factor payments to the rest of the world is

In 2012,GDP was exactly equal to final sales.This implies that

In 2012 final sales equal $200 billion,and the change in business inventories is $50 billion.GDP in 2012

If GNP is $600 billion,receipts of factor income from the rest of the world are $50 billion,and payments of factor income to the rest of the world are $30 billion,then GDP is

Gross national income 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 private domestic investment in billions of dollars is

If GDP is $500 billion and depreciation is $40 billion,then net national product

Which of the following is NOT counted in the GNP of the United States?

Gross national product is the total market value of

If in a year there is a positive inventory investment,then final sales

Personal income is national income minus

If gross investment in 2012 is $750 billion and depreciation in 2012 is $850 billion,net investment in 2012 is

If the GDP deflator is greater than 100,then

Exports equal

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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