Question 1

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Accepted Answer

A) True 
 B)False

Question 2

Table 8-27
   The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars.
-Refer to Table 8-27.What is the level of personal income for this economy?

Accepted Answer

A) $1,140 billion 
B) $1,010 billion 
C) $990 billion 
D) $860 billion 
A) $1,140 billion 
B) $1,010 billion 
C) $990 billion 
D) $860 billion

Question 3

An example of a transfer payment is

Accepted Answer

A) a teacher's paycheck. 
B) a paycheck for a member of the National Guard. 
C) a welfare payment. 
D) a purchase of a new bridge in Alaska. 
A) a teacher's paycheck. 
B) a paycheck for a member of the National Guard. 
C) a welfare payment. 
D) a purchase of a new bridge in Alaska.

Question 4

The size of the underground economy would tend to increase if the government of a country

Accepted Answer

A) decreased government regulations on businesses. 
B) increased income tax rates. 
C) legalized prostitution. 
D) legalized marijuana. 
A) decreased government regulations on businesses. 
B) increased income tax rates. 
C) legalized prostitution. 
D) legalized marijuana.

Question 5

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Accepted Answer

A) 270% 
B) 50% 
C) 5% 
D) 2.7% 
A) 270% 
B) 50% 
C) 5% 
D) 2.7%

Question 6

Which of the following would not be included in the expenditure category called investment expenditures?

Accepted Answer

A) spending on new houses 
B) a purchase of shares of preferred stock 
C) a purchase of a copy machine by FedEx Office 
D) the cars held in inventory on a local Ford dealer's lot 
A) spending on new houses 
B) a purchase of shares of preferred stock 
C) a purchase of a copy machine by FedEx Office 
D) the cars held in inventory on a local Ford dealer's lot

Question 7

Which of the following could cause nominal GDP to increase,but real GDP to decrease?

Accepted Answer

A) The price level rises and the quantity of final goods and services produced rises. 
B) The price level rises and the quantity of final goods and services produced falls. 
C) The price level falls and the quantity of final goods and services produced rises. 
D) The price level falls and the quantity of final goods and services produced falls. 
A) The price level rises and the quantity of final goods and services produced rises. 
B) The price level rises and the quantity of final goods and services produced falls. 
C) The price level falls and the quantity of final goods and services produced rises. 
D) The price level falls and the quantity of final goods and services produced falls.

Question 8

Table 8-30
  
-Refer to Table 8-30.Based on the table above,what is personal income for this economy?

Accepted Answer

A) $1,950 billion 
B) $2,030 billion 
C) $2,450 billion 
D) $5,130 billion 
A) $1,950 billion 
B) $2,030 billion 
C) $2,450 billion 
D) $5,130 billion

Question 9

Give two reasons why GDP does not reflect total production in an economy.

Accepted Answer

The measure of GDP leaves out production

Question 10

Table 8-31
  
-Refer to Table 8-31.The table above represents hypothetical data from the National Income Accounts for 2015.Use the data to calculate personal income and disposable personal income.

Accepted Answer

Personal Income = National income - Reta

Question 11

Which of the following would result in GDP for an economy equal to $10 trillion?

Accepted Answer

A) C = $6 trillion I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion 
B) C = $7 trillion I = $2 trillion
G = $4 trillion
NX = $3 trillion 
C) C = $5 trillion I = $5 trillion
G = $2 trillion
NX = -$2 trillion 
D) C = $4 trillion I = $3 trillion
G = $2 trillion
NX = -$1 trillion 
A) C = $6 trillion I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion 
B) C = $7 trillion I = $2 trillion
G = $4 trillion
NX = $3 trillion 
C) C = $5 trillion I = $5 trillion
G = $2 trillion
NX = -$2 trillion 
D) C = $4 trillion I = $3 trillion
G = $2 trillion
NX = -$1 trillion

Question 12

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Accepted Answer

The underground economy is that part of

Question 13

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much value does Caroline add?

Accepted Answer

A) $75 
B) $1,425 
C) $1,500 
D) $4,425 
A) $75 
B) $1,425 
C) $1,500 
D) $4,425

Question 14

Which of the following are not considered part of government purchases?

Accepted Answer

A) welfare benefits 
B) teachers' salaries paid by a local government 
C) a tank purchased by the federal government 
D) a bridge purchased by the state government 
A) welfare benefits 
B) teachers' salaries paid by a local government 
C) a tank purchased by the federal government 
D) a bridge purchased by the state government

Question 15

Table 8-28
  
-Refer to Table 8-28.Based on the table above,what is national income for this economy?

Accepted Answer

A) $1,950 billion 
B) $2,250 billion 
C) $2,950 billion 
D) $3,550 billion 
A) $1,950 billion 
B) $2,250 billion 
C) $2,950 billion 
D) $3,550 billion

Question 16

To calculate GDP using the value-added method,one would add up

Accepted Answer

A) the market value of final goods and services produced during a particular period. 
B) only the value added by the underground economy. 
C) the value added by each firm involved in the production of final goods and services. 
D) the market value of intermediate goods and services produced during a particular period. 
A) the market value of final goods and services produced during a particular period. 
B) only the value added by the underground economy. 
C) the value added by each firm involved in the production of final goods and services. 
D) the market value of intermediate goods and services produced during a particular period.

Question 17

Which of the following is likely to increase measured GDP?

Accepted Answer

A) A greater number of women decide to stay at home and provide day care for their children under age 5. 
B) Marijuana becomes legal to grow and sell. 
C) Tax rates increase and more people attempt to underreport their income for tax purposes. 
D) More people decide to do their own lawn maintenance and give up using a professional service. 
A) A greater number of women decide to stay at home and provide day care for their children under age 5. 
B) Marijuana becomes legal to grow and sell. 
C) Tax rates increase and more people attempt to underreport their income for tax purposes. 
D) More people decide to do their own lawn maintenance and give up using a professional service.

Question 18

Real GDP will increase

Accepted Answer

A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level rises or the quantity of final goods and services produced rises. 
A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level rises or the quantity of final goods and services produced rises.

Question 19

Gross domestic product in the economy is measured by the

Accepted Answer

A) total number of goods and services produced in the economy. 
B) dollar value of all final goods and services produced in the economy. 
C) total number of goods produced in the economy. 
D) total number of services produced in the economy. 
A) total number of goods and services produced in the economy. 
B) dollar value of all final goods and services produced in the economy. 
C) total number of goods produced in the economy. 
D) total number of services produced in the economy.

Question 20

The size of the underground economy would tend to decrease if the government of a country

Accepted Answer

A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes. 
A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes.

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Table 8-27 The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars. -Refer to Table 8-27.What is the level of personal income for this economy?

An example of a transfer payment is

The size of the underground economy would tend to increase if the government of a country

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Which of the following would not be included in the expenditure category called investment expenditures?

Which of the following could cause nominal GDP to increase,but real GDP to decrease?

Table 8-30 -Refer to Table 8-30.Based on the table above,what is personal income for this economy?

Give two reasons why GDP does not reflect total production in an economy.

Table 8-31 -Refer to Table 8-31.The table above represents hypothetical data from the National Income Accounts for 2015.Use the data to calculate personal income and disposable personal income.

Which of the following would result in GDP for an economy equal to $10 trillion?

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much value does Caroline add?

Which of the following are not considered part of government purchases?

Table 8-28 -Refer to Table 8-28.Based on the table above,what is national income for this economy?

To calculate GDP using the value-added method,one would add up

Which of the following is likely to increase measured GDP?

Real GDP will increase

Gross domestic product in the economy is measured by the

The size of the underground economy would tend to decrease if the government of a country

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 8: Gdp: Measuring Total Production and Income

If income is unequally distributed in an economy,increases in GDP may not raise well-being in an economy.

Table 8-27 The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars. -Refer to Table 8-27.What is the level of personal income for this economy?

An example of a transfer payment is

The size of the underground economy would tend to increase if the government of a country

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Which of the following would not be included in the expenditure category called investment expenditures?

Which of the following could cause nominal GDP to increase,but real GDP to decrease?

Table 8-30 -Refer to Table 8-30.Based on the table above,what is personal income for this economy?

Give two reasons why GDP does not reflect total production in an economy.

Table 8-31 -Refer to Table 8-31.The table above represents hypothetical data from the National Income Accounts for 2015.Use the data to calculate personal income and disposable personal income.

Which of the following would result in GDP for an economy equal to $10 trillion?

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?

Caroline is an artist.She purchases canvas,paints,brushes,and accessories for $75.She sells one of her original paintings to an art gallery for $1,500,even though an art lover would pay $4,500 for that painting.How much value does Caroline add?

Which of the following are not considered part of government purchases?

Table 8-28 -Refer to Table 8-28.Based on the table above,what is national income for this economy?

To calculate GDP using the value-added method,one would add up

Which of the following is likely to increase measured GDP?

Real GDP will increase

Gross domestic product in the economy is measured by the

The size of the underground economy would tend to decrease if the government of a country

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters