Question 1

Which prices are used to measure goods and services in calculating GDP?

Accepted Answer

A)  past year prices 
B)  current prices 
C)  average prices 
D)  projected prices 
A)  past year prices 
B)  current prices 
C)  average prices 
D)  projected prices

Question 2

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).

Question 3

The costs of pollution are subtracted from the value of final sales before calculating GDP.

Accepted Answer

A) True 
 B)False

Question 4

A company produced 12 motorcycles in 2015. The company sold 8 in 2015 and added 4 to its inventories. The market value of the motorcycles in 2015 was $1,000 per unit. What is the value of this company's output that will be included in the 2015 GDP?

Accepted Answer

A)  $4,000 
B)  $8,000 
C)  $12,000 
D)  $16,000 
A)  $4,000 
B)  $8,000 
C)  $12,000 
D)  $16,000

Question 5

The total market value of all final goods and services produced by resources owned by a country, regardless of where production takes place is

Accepted Answer

A)  gross private domestic investment. 
B)  national income. 
C)  gross domestic product. 
D)  gross national product. 
A)  gross private domestic investment. 
B)  national income. 
C)  gross domestic product. 
D)  gross national product.

Question 6

In 2016 the change in business inventories is -$70 billion and GDP is $200 billion. Final sales in 2016

Accepted Answer

A)  are $130 billion. 
B)  are $200 billion. 
C)  are $270 billion. 
D)  are $340 billion. 
A)  are $130 billion. 
B)  are $200 billion. 
C)  are $270 billion. 
D)  are $340 billion.

Question 7

Net interest is the interest on loans paid by

Accepted Answer

A)  businesses, households, and the government. 
B)  businesses and households. 
C)  businesses and the government. 
D)  businesses. 
A)  businesses, households, and the government. 
B)  businesses and households. 
C)  businesses and the government. 
D)  businesses.

Question 8

If the change in business inventories is positive, 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 9

A weakness in the concept of GDP is that it ignores income distribution.

Accepted Answer

A) True 
 B)False

Question 10

The only component of GDP which can have a negative value is

Accepted Answer

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

Question 11

GDP measured in base year prices is real GDP.

Accepted Answer

A) True 
 B)False

Question 12

If GNP is $200 billion, receipts of factor income from the rest of the world are $10 billion, and payments of factor income to the rest of the world are $30 billion, then GDP is

Accepted Answer

A)  $160 billion. 
B)  $210 billion. 
C)  $220 billion. 
D)  $240 billion. 
A)  $160 billion. 
B)  $210 billion. 
C)  $220 billion. 
D)  $240 billion.

Question 13

If the value of net exports is positive, 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 14

When differences between nominal GDP and real GDP result due to price changes and nothing else is compared, an index called the ________ is created.

Accepted Answer

A)  inflation index 
B)  consumer price index 
C)  GDP deflator 
D)  index of leading indicators 
A)  inflation index 
B)  consumer price index 
C)  GDP deflator 
D)  index of leading indicators

Question 15

If personal saving is -$10 billion and disposable personal income is $370 billion, then personal consumption spending

Accepted Answer

A)  is $360 billion. 
B)  is $380 billion. 
C)  is $390 billion. 
D)  cannot be determined from this information. 
A)  is $360 billion. 
B)  is $380 billion. 
C)  is $390 billion. 
D)  cannot be determined from this information.

Question 16

If nominal GDP falls, then so must real GDP.

Accepted Answer

A) True 
 B)False

Question 17

If GDP is $400 billion, depreciation is $100 billion, and net factor income from the rest of the world is -$60 billion, then net national product is

Accepted Answer

A)  $240 billion. 
B)  $300 billion. 
C)  $360 billion. 
D)  $440 billion. 
A)  $240 billion. 
B)  $300 billion. 
C)  $360 billion. 
D)  $440 billion.

Question 18

Which of the following is added to personal income to get national income?

Accepted Answer

A)  retained earnings 
B)  personal interest income 
C)  depreciation 
D)  personal taxes 
A)  retained earnings 
B)  personal interest income 
C)  depreciation 
D)  personal taxes

Question 19

New automobiles count as consumer durables.

Accepted Answer

A) True 
 B)False

Question 20

Legalizing all forms of illegal activities would

Accepted Answer

A)  reduce measured GDP. 
B)  reduce the size of the underground economy and increase measured GDP. 
C)  reduce both the underground economy and measured GDP. 
D)  increase the size of the underground economy and reduce measured GDP. 
A)  reduce measured GDP. 
B)  reduce the size of the underground economy and increase measured GDP. 
C)  reduce both the underground economy and measured GDP. 
D)  increase the size of the underground economy and reduce measured GDP.

Exam 6: Measuring National Output and National Income

Which prices are used to measure goods and services in calculating GDP?

Exports equal

The costs of pollution are subtracted from the value of final sales before calculating GDP.

A company produced 12 motorcycles in 2015. The company sold 8 in 2015 and added 4 to its inventories. The market value of the motorcycles in 2015 was $1,000 per unit. What is the value of this company's output that will be included in the 2015 GDP?

The total market value of all final goods and services produced by resources owned by a country, regardless of where production takes place is

In 2016 the change in business inventories is -$70 billion and GDP is $200 billion. Final sales in 2016

Net interest is the interest on loans paid by

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

A weakness in the concept of GDP is that it ignores income distribution.

The only component of GDP which can have a negative value is

GDP measured in base year prices is real GDP.

If GNP is $200 billion, receipts of factor income from the rest of the world are $10 billion, and payments of factor income to the rest of the world are $30 billion, then GDP is

If the value of net exports is positive, then

When differences between nominal GDP and real GDP result due to price changes and nothing else is compared, an index called the ________ is created.

If personal saving is -$10 billion and disposable personal income is $370 billion, then personal consumption spending

If nominal GDP falls, then so must real GDP.

If GDP is $400 billion, depreciation is $100 billion, and net factor income from the rest of the world is -$60 billion, then net national product is

Which of the following is added to personal income to get national income?

New automobiles count as consumer durables.

Legalizing all forms of illegal activities would

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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