Question 1

If personal income is $700 billion and personal income taxes are $140 billion, the value of disposable personal income is

Accepted Answer

A)  $560 billion. 
B)  $630 billion. 
C)  $640 billion. 
D)  $840 billion. 
A)  $560 billion. 
B)  $630 billion. 
C)  $640 billion. 
D)  $840 billion.

Question 2

National income minus the amount of national income not going to households is

Accepted Answer

A)  proprietor's income. 
B)  interest income. 
C)  personal income. 
D)  disposable income. 
A)  proprietor's income. 
B)  interest income. 
C)  personal income. 
D)  disposable income.

Question 3

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 NNP in billions of dollars is

Accepted Answer

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

Question 4

Which of the following is not a component of gross domestic product?

Accepted Answer

A)  net exports 
B)  government purchases 
C)  purchases by consumers of used goods 
D)  purchases by consumers of finished goods 
A)  net exports 
B)  government purchases 
C)  purchases by consumers of used goods 
D)  purchases by consumers of finished goods

Question 5

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 for gross private domestic investment in billions of dollars is

Accepted Answer

A)  360. 
B)  400. 
C)  440. 
D)  510. 
A)  360. 
B)  400. 
C)  440. 
D)  510.

Question 6

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 7

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 of disposable income in billions of dollars

Accepted Answer

A)  is 625. 
B)  is 710. 
C)  is 800. 
D)  cannot be calculated given the information in Table 6.3. 
A)  is 625. 
B)  is 710. 
C)  is 800. 
D)  cannot be calculated given the information in Table 6.3.

Question 8

Refer to the information provided in Table 6.6 below to answer the questions that follow.
Table 6.6  
-Refer to Table 6.6. The value for gross private domestic investment in billions of dollars is

Accepted Answer

A)  800. 
B)  900. 
C)  1,000. 
D)  1,100. 
A)  800. 
B)  900. 
C)  1,000. 
D)  1,100.

Question 9

Interest paid by businesses is

Accepted Answer

A)  counted in national income, but not in GDP. 
B)  not counted in GDP because it is not assumed to flow from the production of goods and services. 
C)  not counted in GDP but is counted in GNP because it is paid by U.S. businesses. 
D)  included in both GDP and national income. 
A)  counted in national income, but not in GDP. 
B)  not counted in GDP because it is not assumed to flow from the production of goods and services. 
C)  not counted in GDP but is counted in GNP because it is paid by U.S. businesses. 
D)  included in both GDP and national income.

Question 10

Gross investment minus net investment is

Accepted Answer

A)  the change in inventories. 
B)  total investment. 
C)  depreciation. 
D)  zero. 
A)  the change in inventories. 
B)  total investment. 
C)  depreciation. 
D)  zero.

Question 11

Real GDP is gross domestic product measured

Accepted Answer

A)  at a constant output level but at current prices. 
B)  in current dollars. 
C)  in the prices of a base year. 
D)  as the difference between the current year's GDP and last year's GDP. 
A)  at a constant output level but at current prices. 
B)  in current dollars. 
C)  in the prices of a base year. 
D)  as the difference between the current year's GDP and last year's GDP.

Question 12

If nominal GDP rises, then so must real GDP.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of an intermediate good?

Accepted Answer

A)  the dough you buy to fix yourself a pizza for dinner 
B)  the chocolate you buy to make yourself some cookies 
C)  the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to 
D)  lumber you buy to build a house for your dog 
A)  the dough you buy to fix yourself a pizza for dinner 
B)  the chocolate you buy to make yourself some cookies 
C)  the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to 
D)  lumber you buy to build a house for your dog

Question 14

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 disposable personal income in billions of dollars is

Accepted Answer

A)  750. 
B)  770. 
C)  820. 
D)  990. 
A)  750. 
B)  770. 
C)  820. 
D)  990.

Question 15

The GDP deflator in year 2 is 95 using year 1 as a base year. This means that, on average, the price of goods and services is

Accepted Answer

A)  105% higher in year 2 than in year 1. 
B)  5% higher in year 2 than in year 1. 
C)  5% higher in year 1 than in year 2. 
D)  105% higher in year 1 than in year 2. 
A)  105% higher in year 2 than in year 1. 
B)  5% higher in year 2 than in year 1. 
C)  5% higher in year 1 than in year 2. 
D)  105% higher in year 1 than in year 2.

Question 16

If the value of net exports is negative, then

Accepted Answer

A)  exports exceed imports. 
B)  imports exceed exports. 
C)  exports equal imports. 
D)  imports are zero. 
A)  exports exceed imports. 
B)  imports exceed exports. 
C)  exports equal imports. 
D)  imports are zero.

Question 17

If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is

Accepted Answer

A)  48. 
B)  75. 
C)  133.33. 
D)  480. 
A)  48. 
B)  75. 
C)  133.33. 
D)  480.

Question 18

If net investment in 2016 is $350 billion and gross investment in 2016 is $500 billion, depreciation in 2016 is

Accepted Answer

A)  $0.7 billion. 
B)  $150 billion. 
C)  $175 billion. 
D)  $250 billion. 
A)  $0.7 billion. 
B)  $150 billion. 
C)  $175 billion. 
D)  $250 billion.

Question 19

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1  
-Refer to Table 6.1. Personal consumption expenditures in billions of dollars are

Accepted Answer

A)  1,000. 
B)  1,300. 
C)  1,500. 
D)  2,000. 
A)  1,000. 
B)  1,300. 
C)  1,500. 
D)  2,000.

Question 20

Consumers can spend their entire personal income.

Accepted Answer

A) True 
 B)False

Exam 6: Measuring National Output and National Income

If personal income is $700 billion and personal income taxes are $140 billion, the value of disposable personal income is

National income minus the amount of national income not going to households 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 NNP in billions of dollars is

Which of the following is not a component of gross domestic product?

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 for gross private domestic investment in billions of dollars is

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

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 of disposable income in billions of dollars

Refer to the information provided in Table 6.6 below to answer the questions that follow. Table 6.6 -Refer to Table 6.6. The value for gross private domestic investment in billions of dollars is

Interest paid by businesses is

Gross investment minus net investment is

Real GDP is gross domestic product measured

If nominal GDP rises, then so must real GDP.

Which of the following is an example of an intermediate good?

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 disposable personal income in billions of dollars is

The GDP deflator in year 2 is 95 using year 1 as a base year. This means that, on average, the price of goods and services is

If the value of net exports is negative, then

If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is

If net investment in 2016 is $350 billion and gross investment in 2016 is $500 billion, depreciation in 2016 is

Refer to the information provided in Table 6.1 below to answer the questions that follow. Table 6.1 -Refer to Table 6.1. Personal consumption expenditures in billions of dollars are

Consumers can spend their entire personal income.

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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