Question 1

The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is

Accepted Answer

A)  4.55%. 
B)  7.27%. 
C)  8%. 
D)  18%. 
A)  4.55%. 
B)  7.27%. 
C)  8%. 
D)  18%.

Question 2

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 GDP in billions of dollars is

Accepted Answer

A)  910. 
B)  920. 
C)  950. 
D)  1,050. 
A)  910. 
B)  920. 
C)  950. 
D)  1,050.

Question 3

The total market value of all final goods and services produced within a given period by factors of production located within a country is

Accepted Answer

A)  gross domestic product. 
B)  gross national product. 
C)  net national product. 
D)  net national income. 
A)  gross domestic product. 
B)  gross national product. 
C)  net national product. 
D)  net national income.

Question 4

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 5

Refer to the information provided in Table 6.2 below to answer the questions that follow.
Table 6.2  
-Refer to Table 6.2. Personal consumption expenditures in billions of dollars are

Accepted Answer

A)  900. 
B)  1,100. 
C)  1,400. 
D)  1,600. 
A)  900. 
B)  1,100. 
C)  1,400. 
D)  1,600.

Question 6

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 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 in billions of dollars is

Accepted Answer

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

Question 8

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5  
-Refer to Table 6.5. The value of gross domestic product in billions of dollars is

Accepted Answer

A)  3,190. 
B)  3,430. 
C)  3,460. 
D)  3,650. 
A)  3,190. 
B)  3,430. 
C)  3,460. 
D)  3,650.

Question 9

If in the same period output doubles and the price level remains the same, nominal GDP doubles.

Accepted Answer

A) True 
 B)False

Question 10

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 1 is the base year, the value for this economy's real GDP in year 2 is

Accepted Answer

A)  $120. 
B)  $122. 
C)  $132. 
D)  $140. 
A)  $120. 
B)  $122. 
C)  $132. 
D)  $140.

Question 11

If personal saving is -$40 billion and disposable personal income is $430 billion, then personal consumption spending is

Accepted Answer

A)  $40 billion. 
B)  $390 billion. 
C)  $410 billion. 
D)  $470 billion. 
A)  $40 billion. 
B)  $390 billion. 
C)  $410 billion. 
D)  $470 billion.

Question 12

If gross investment in 2017 is $750 billion and depreciation in 2017 is $750 billion, net investment in 2017 is

Accepted Answer

A)  -$750 billion. 
B)  zero. 
C)  $750 billion. 
D)  $1,500 billion. 
A)  -$750 billion. 
B)  zero. 
C)  $750 billion. 
D)  $1,500 billion.

Question 13

Related to the Economics in Practice on p. 107: The value of the used goods sold on eBay from a U.S. seller to a U.S. buyer is

Accepted Answer

A)  counted in U.S. GDP but not GNP. 
B)  counted in U.S. GNP but not GDP. 
C)  counted in both U.S. GDP and GNP. 
D)  not counted in either U.S. GDP or GNP. 
A)  counted in U.S. GDP but not GNP. 
B)  counted in U.S. GNP but not GDP. 
C)  counted in both U.S. GDP and GNP. 
D)  not counted in either U.S. GDP or GNP.

Question 14

A GDP deflator is real GDP divided by nominal GDP times 100.

Accepted Answer

A) True 
 B)False

Question 15

If depreciation equals zero and retained earnings equal $5 billion, then

Accepted Answer

A)  GNP is less than net national product by $5 billion. 
B)  GNP equals net national product. 
C)  Net national product is less than GNP by $5 billion. 
D)  GNP is greater than GDP by $5 billion. 
A)  GNP is less than net national product by $5 billion. 
B)  GNP equals net national product. 
C)  Net national product is less than GNP by $5 billion. 
D)  GNP is greater than GDP by $5 billion.

Question 16

Net national product is

Accepted Answer

A)  GDP plus depreciation. 
B)  GDP minus depreciation. 
C)  GNP minus depreciation. 
D)  GNP plus depreciation. 
A)  GDP plus depreciation. 
B)  GDP minus depreciation. 
C)  GNP minus depreciation. 
D)  GNP plus depreciation.

Question 17

The single largest expenditure component in GDP is

Accepted Answer

A)  government spending. 
B)  investment. 
C)  consumption. 
D)  net exports. 
A)  government spending. 
B)  investment. 
C)  consumption. 
D)  net exports.

Question 18

If net investment is zero, then

Accepted Answer

A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is zero. 
A)  gross investment is greater than depreciation. 
B)  gross investment is less than depreciation. 
C)  gross investment equals depreciation. 
D)  depreciation is zero.

Question 19

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 disposable income in billions of dollars

Accepted Answer

A)  is 505. 
B)  is 560. 
C)  is 605. 
D)  cannot be calculated given the information in Table 6.3. 
A)  is 505. 
B)  is 560. 
C)  is 605. 
D)  cannot be calculated given the information in Table 6.3.

Question 20

"Final goods and services" are those that are

Accepted Answer

A)  double counted in the calculation of GDP. 
B)  produced outside of the United States. 
C)  used in the production of other goods and services. 
D)  sold to the ultimate or final purchasers. 
A)  double counted in the calculation of GDP. 
B)  produced outside of the United States. 
C)  used in the production of other goods and services. 
D)  sold to the ultimate or final purchasers.

Exam 6: Measuring National Output and National Income

The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 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 GDP in billions of dollars is

The total market value of all final goods and services produced within a given period by factors of production located within a country is

Net investment 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. Personal consumption expenditures in billions of dollars are

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 6.3 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 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. The value of gross domestic product in billions of dollars is

If in the same period output doubles and the price level remains the same, nominal GDP doubles.

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 1 is the base year, the value for this economy's real GDP in year 2 is

If personal saving is -$40 billion and disposable personal income is $430 billion, then personal consumption spending is

If gross investment in 2017 is $750 billion and depreciation in 2017 is $750 billion, net investment in 2017 is

Related to the Economics in Practice on p. 107: The value of the used goods sold on eBay from a U.S. seller to a U.S. buyer is

A GDP deflator is real GDP divided by nominal GDP times 100.

If depreciation equals zero and retained earnings equal $5 billion, then

Net national product is

The single largest expenditure component in GDP is

If net investment is zero, then

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 disposable income in billions of dollars

"Final goods and services" are those that are

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

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