Question 1

GNP converted into dollars using an average exchange rate over several years adjusted for rates of inflation is

Accepted Answer

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

Question 2

Refer to the information provided in Table 6.5 below to answer the questions that follow.
Table 6.5  
-Refer to Table 6.5. Personal consumption expenditures in billions of dollars are

Accepted Answer

A)  1,400. 
B)  1,500. 
C)  1,700. 
D)  2,300. 
A)  1,400. 
B)  1,500. 
C)  1,700. 
D)  2,300.

Question 3

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 4

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 disposable personal income in billions of dollars is

Accepted Answer

A)  890. 
B)  920. 
C)  970. 
D)  1,020. 
A)  890. 
B)  920. 
C)  970. 
D)  1,020.

Question 5

In 2016 final sales equal $350 billion and the change in business inventories is -$60 billion. GDP in 2016

Accepted Answer

A)  is $290 billion. 
B)  is $295 billion. 
C)  is $410 billion. 
D)  cannot be determined from this information. 
A)  is $290 billion. 
B)  is $295 billion. 
C)  is $410 billion. 
D)  cannot be determined from this information.

Question 6

For any year beyond the base year, nominal GDP must be greater than real GDP.

Accepted Answer

A) True 
 B)False

Question 7

Refer to the information provided in Table 6.9 below to answer the questions that follow.
Table 6.9  
-Refer to Table 6.9. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 2 is

Accepted Answer

A)  $168. 
B)  $179. 
C)  $202. 
D)  $214. 
A)  $168. 
B)  $179. 
C)  $202. 
D)  $214.

Question 8

If depreciation equals zero and retained earnings equal $25 billion, then

Accepted Answer

A)  GNP is less than net national product by $25 billion. 
B)  GNP equals net national product. 
C)  net national product is less than GNP by $25 billion. 
D)  GNP is greater than GDP by $25 billion. 
A)  GNP is less than net national product by $25 billion. 
B)  GNP equals net national product. 
C)  net national product is less than GNP by $25 billion. 
D)  GNP is greater than GDP by $25 billion.

Question 9

Related to the Economics in Practice on p. 112: The National Income and Product Accounts (NIPAs) were originally developed for the Commerce Department

Accepted Answer

A)  during the Reconstruction era following the Civil War. 
B)  during the era of the Great Depression in the 1930s. 
C)  at the onset of the Cold War in the 1950s. 
D)  during the 1970s following the public distrust of the government from the Watergate scandal. 
A)  during the Reconstruction era following the Civil War. 
B)  during the era of the Great Depression in the 1930s. 
C)  at the onset of the Cold War in the 1950s. 
D)  during the 1970s following the public distrust of the government from the Watergate scandal.

Question 10

If investment is larger than depreciation, the capital stock decreases.

Accepted Answer

A) True 
 B)False

Question 11

Refer to the information provided in Table 6.6 below to answer the questions that follow.
Table 6.6  
-Refer to Table 6.6. Personal consumption expenditures in billions of dollars are

Accepted Answer

A)  1,000. 
B)  1,100. 
C)  1,300. 
D)  1,700. 
A)  1,000. 
B)  1,100. 
C)  1,300. 
D)  1,700.

Question 12

If GNP is $650 billion and depreciation is $70 billion, then net national product is

Accepted Answer

A)  $560 billion. 
B)  $580 billion. 
C)  $610 billion. 
D)  $720 billion. 
A)  $560 billion. 
B)  $580 billion. 
C)  $610 billion. 
D)  $720 billion.

Question 13

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 14

The income of U.S. citizens working abroad counts in U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

GNI per capita is gross national income divided by the population.

Accepted Answer

A) True 
 B)False

Question 17

Final sales plus changes in inventories equals GDP.

Accepted Answer

A) True 
 B)False

Question 18

Related to the Economics in Practice on p. 107: If a Swiss dealer sells a newly produced Swiss watch on eBay to a U.S. customer, the value of the watch is

Accepted Answer

A)  counted in U.S. GDP. 
B)  counted in U.S. GDP and Swiss GDP. 
C)  counted in Swiss GDP. 
D)  not counted in either U.S. or Swiss GDP. 
A)  counted in U.S. GDP. 
B)  counted in U.S. GDP and Swiss GDP. 
C)  counted in Swiss GDP. 
D)  not counted in either U.S. or Swiss GDP.

Question 19

When GDP is measured using "adjustments for price changes" it is known as the

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  real GNP. 
D)  nominal GNP. 
A)  real GDP. 
B)  nominal GDP. 
C)  real GNP. 
D)  nominal GNP.

Question 20

Refer to the information provided in Table 6.7 below to answer the questions that follow.
Table 6.7  
-Refer to Table 6.7. The value for gross domestic product in billions of dollars is

Accepted Answer

A)  720. 
B)  800. 
C)  920. 
D)  975. 
A)  720. 
B)  800. 
C)  920. 
D)  975.

Exam 6: Measuring National Output and National Income

GNP converted into dollars using an average exchange rate over several years adjusted for rates of inflation 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. Personal consumption expenditures in billions of dollars are

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

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 disposable personal income in billions of dollars is

In 2016 final sales equal $350 billion and the change in business inventories is -$60 billion. GDP in 2016

For any year beyond the base year, nominal GDP must be greater than real GDP.

Refer to the information provided in Table 6.9 below to answer the questions that follow. Table 6.9 -Refer to Table 6.9. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 2 is

If depreciation equals zero and retained earnings equal $25 billion, then

Related to the Economics in Practice on p. 112: The National Income and Product Accounts (NIPAs) were originally developed for the Commerce Department

If investment is larger than depreciation, the capital stock decreases.

Refer to the information provided in Table 6.6 below to answer the questions that follow. Table 6.6 -Refer to Table 6.6. Personal consumption expenditures in billions of dollars are

If GNP is $650 billion and depreciation is $70 billion, then net national product is

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

The income of U.S. citizens working abroad counts in U.S. GDP.

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

GNI per capita is gross national income divided by the population.

Final sales plus changes in inventories equals GDP.

Related to the Economics in Practice on p. 107: If a Swiss dealer sells a newly produced Swiss watch on eBay to a U.S. customer, the value of the watch is

When GDP is measured using "adjustments for price changes" it is known as the

Refer to the information provided in Table 6.7 below to answer the questions that follow. Table 6.7 -Refer to Table 6.7. The value for gross domestic product in billions of dollars is

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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