Question 1

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 2

Per capita gross national income (GNI) increases when

Accepted Answer

A)  GNI and the population increase at the same rate. 
B)  GNI does not change and the population increases. 
C)  GNI and the population decrease at the same rate. 
D)  GNI increases and the population does not change. 
A)  GNI and the population increase at the same rate. 
B)  GNI does not change and the population increases. 
C)  GNI and the population decrease at the same rate. 
D)  GNI increases and the population does not change.

Question 3

If real GDP rises, then so must nominal GDP.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Refer to the information provided in Table 6.10 below to answer the questions that follow.
Table 6.10  
-Refer to Table 6.10. Assume that this economy produces only two goods Good X and Good Y. If year 2 is the base year, the value for this economy's real GDP in year 3 is

Accepted Answer

A)  $270. 
B)  $178. 
C)  $156. 
D)  $132. 
A)  $270. 
B)  $178. 
C)  $156. 
D)  $132.

Question 6

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 7

A country's GNP will definitely exceed its GDP if ________ foreign companies produce in the country and ________ of the country's companies produce abroad.

Accepted Answer

A)  no; many 
B)  many; none 
C)  many; many 
D)  no; none 
A)  no; many 
B)  many; none 
C)  many; many 
D)  no; none

Question 8

Stock market transactions are part of GNP.

Accepted Answer

A) True 
 B)False

Question 9

Proprietors' income is

Accepted Answer

A)  the income of unincorporated businesses. 
B)  the income of all businesses-incorporated and unincorporated. 
C)  the income of sole proprietorships. 
D)  the income of partnerships. 
A)  the income of unincorporated businesses. 
B)  the income of all businesses-incorporated and unincorporated. 
C)  the income of sole proprietorships. 
D)  the income of partnerships.

Question 10

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 11

When calculating GDP, exports are ________ and imports are ________.

Accepted Answer

A)  added; added 
B)  added; subtracted 
C)  subtracted; added 
D)  subtracted; subtracted 
A)  added; added 
B)  added; subtracted 
C)  subtracted; added 
D)  subtracted; subtracted

Question 12

The base year of an index is

Accepted Answer

A)  the year chosen for the weights in a fixed weight procedure. 
B)  the year currently being calculated. 
C)  the last year of the index. 
D)  the first year of the index. 
A)  the year chosen for the weights in a fixed weight procedure. 
B)  the year currently being calculated. 
C)  the last year of the index. 
D)  the first year of the index.

Question 13

Refer to the information provided in Table 6.8 below to answer the questions that follow.
Table 6.8  
-Refer to Table 6.8. The value for personal income in billions of dollars is

Accepted Answer

A)  970. 
B)  1,000. 
C)  1,050. 
D)  1,110. 
A)  970. 
B)  1,000. 
C)  1,050. 
D)  1,110.

Question 14

The GDP of the U.S. in 2014 was around $17.4 trillion. This means

Accepted Answer

A)  that the value of output in the U.S. in 2014 was around $17.4 trillion. 
B)  that total income in the U.S. in 2014 was around $17.4 trillion. 
C)  that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. 
D)  all of the above 
A)  that the value of output in the U.S. in 2014 was around $17.4 trillion. 
B)  that total income in the U.S. in 2014 was around $17.4 trillion. 
C)  that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. 
D)  all of the above

Question 15

Indirect taxes include all of the following except

Accepted Answer

A)  sales taxes. 
B)  license fees. 
C)  customs duties. 
D)  property taxes. 
A)  sales taxes. 
B)  license fees. 
C)  customs duties. 
D)  property taxes.

Question 16

If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be

Accepted Answer

A)  $400. 
B)  $600. 
C)  $1,000. 
D)  $1,600. 
A)  $400. 
B)  $600. 
C)  $1,000. 
D)  $1,600.

Question 17

Refer to the information provided in Table 6.8 below to answer the questions that follow.
Table 6.8  
-Refer to Table 6.8. The value for NNP in billions of dollars is

Accepted Answer

A)  970. 
B)  1,030. 
C)  1,060. 
D)  1,200. 
A)  970. 
B)  1,030. 
C)  1,060. 
D)  1,200.

Question 18

Related to the Economics in Practice on p. 107: The value of the fees charged by eBay to sellers who use eBay is

Accepted Answer

A)  counted in U.S. GDP. 
B)  only counted in U.S. GDP if the seller is in the U.S. 
C)  only counted in U.S. GDP if the product being sold is new. 
D)  never counted in U.S. GDP. 
A)  counted in U.S. GDP. 
B)  only counted in U.S. GDP if the seller is in the U.S. 
C)  only counted in U.S. GDP if the product being sold is new. 
D)  never counted in U.S. GDP.

Question 19

Refer to the information provided in Table 6.4 below to answer the questions that follow.
Table 6.4  
-Refer to Table 6.4. The value for national income in billions of dollars is

Accepted Answer

A)  890. 
B)  910. 
C)  940. 
D)  970. 
A)  890. 
B)  910. 
C)  940. 
D)  970.

Question 20

If the economy grows at 10 percent from year 1 to year 2 and real GDP is 300 in year 1, what will real GDP be in year 2?

Accepted Answer

A)  10 
B)  300 
C)  315 
D)  330 
A)  10 
B)  300 
C)  315 
D)  330

Exam 6: Measuring National Output and National Income

Double counting can be avoided by

Per capita gross national income (GNI) increases when

If real GDP rises, then so must nominal GDP.

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

Refer to the information provided in Table 6.10 below to answer the questions that follow. Table 6.10 -Refer to Table 6.10. Assume that this economy produces only two goods Good X and Good Y. If year 2 is the base year, the value for this economy's real GDP in year 3 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.

A country's GNP will definitely exceed its GDP if ________ foreign companies produce in the country and ________ of the country's companies produce abroad.

Stock market transactions are part of GNP.

Proprietors' income is

The change in business inventories is measured as

When calculating GDP, exports are ________ and imports are ________.

The base year of an index is

Refer to the information provided in Table 6.8 below to answer the questions that follow. Table 6.8 -Refer to Table 6.8. The value for personal income in billions of dollars is

The GDP of the U.S. in 2014 was around $17.4 trillion. This means

Indirect taxes include all of the following except

If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be

Refer to the information provided in Table 6.8 below to answer the questions that follow. Table 6.8 -Refer to Table 6.8. The value for NNP in billions of dollars is

Related to the Economics in Practice on p. 107: The value of the fees charged by eBay to sellers who use eBay is

Refer to the information provided in Table 6.4 below to answer the questions that follow. Table 6.4 -Refer to Table 6.4. The value for national income in billions of dollars is

If the economy grows at 10 percent from year 1 to year 2 and real GDP is 300 in year 1, what will real GDP be in year 2?

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters

A country's GNP will definitely exceed its GDP if foreign companies produce in the country and of the country's companies produce abroad.

When calculating GDP, exports are and imports are .