Question 1

Residential investment includes spending by firms on office buildings.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not an example of a transfer payment?

Accepted Answer

A) unemployment insurance payments 
B) health insurance payments to an army private 
C) social security payments to retirees 
D) social security payments to disabled persons 
A) unemployment insurance payments 
B) health insurance payments to an army private 
C) social security payments to retirees 
D) social security payments to disabled persons

Question 3

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Accepted Answer

A) chained-weighted prices. 
B) fixed-weight prices. 
C) current-year prices. 
D) fixed base-year prices. 
A) chained-weighted prices. 
B) fixed-weight prices. 
C) current-year prices. 
D) fixed base-year prices.

Question 4

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Accepted Answer

A) employment in a specific industry. 
B) employment in the economy. 
C) output of a specific firm. 
D) output of a specific industry. 
A) employment in a specific industry. 
B) employment in the economy. 
C) output of a specific firm. 
D) output of a specific industry.

Question 5

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Accepted Answer

A) GDP rises by $1,875. 
B) GDP is not affected by Scott's production of the jewelry box. 
C) GDP rises by $125. 
D) GDP falls by $1,875. 
A) GDP rises by $1,875. 
B) GDP is not affected by Scott's production of the jewelry box. 
C) GDP rises by $125. 
D) GDP falls by $1,875.

Question 6

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Accepted Answer

A) GDP would increase reflecting the fact that the environment would be cleaner. 
B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. 
C) GDP would increase as the citizens of China were made happier as the environment was cleaned up. 
D) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP. 
A) GDP would increase reflecting the fact that the environment would be cleaner. 
B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. 
C) GDP would increase as the citizens of China were made happier as the environment was cleaned up. 
D) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP.

Question 7

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Accepted Answer

A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent 
A) 2 percent 
B) 8 percent 
C) 13 percent 
D) over 50 percent

Question 8

In 2015,the U.S.auto industry experienced rising sales.The automobile industry was experiencing the effects of

Accepted Answer

A) inflation. 
B) the underground economy. 
C) the business cycle. 
D) depreciation. 
A) inflation. 
B) the underground economy. 
C) the business cycle. 
D) depreciation.

Question 9

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi

Question 10

The GDP deflator is the

Accepted Answer

A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP divided by 100. 
C) ratio of real GDP to nominal GDP multiplied by 100. 
D) ratio of nominal GDP to real GDP multiplied by 100. 
A) difference between real GDP and nominal GDP multiplied by 100. 
B) difference between nominal GDP and real GDP divided by 100. 
C) ratio of real GDP to nominal GDP multiplied by 100. 
D) ratio of nominal GDP to real GDP multiplied by 100.

Question 11

Which of the following equations correctly measures GDP in an economy?

Accepted Answer

A) GDP = C + I + G + X 
B) GDP = C + net I + G + NX 
C) GDP = C + I + G + NX 
D) GDP = C + G + I - taxes 
A) GDP = C + I + G + X 
B) GDP = C + net I + G + NX 
C) GDP = C + I + G + NX 
D) GDP = C + G + I - taxes

Question 12

Table 8-22
2011 2015 2016
  
-Refer to Table 8-22.Consider the data above for a simple economy: Using 2011 as the base year,calculate nominal GDP,real GDP,and the GDP deflator for 2016.Show your work.

Accepted Answer

Nominal GDP for 2016 equals (5

Question 13

Investment,as defined by economists,would include the purchase of a

Accepted Answer

A) corporate bond. 
B) government bond. 
C) share of stock in ExxonMobil. 
D) computer by an accounting firm. 
A) corporate bond. 
B) government bond. 
C) share of stock in ExxonMobil. 
D) computer by an accounting firm.

Question 14

Consumption expenditures do not include household purchases of

Accepted Answer

A) medical care. 
B) education. 
C) new houses. 
D) durable goods. 
A) medical care. 
B) education. 
C) new houses. 
D) durable goods.

Question 15

If prices are rising on average,then

Accepted Answer

A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year. 
A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year.

Question 16

If the value added of a firm is positive,will the firm necessarily have positive profits?

Accepted Answer

No.Value added equals the price of the f

Question 17

Debbie makes porcelain plates in her home and sells them to the Opus gallery.She spent $400 last month on supplies and made 50 plates.She sold the plates to the gallery at $25 per plate.The gallery sells all the plates for $40 each.For all of the 50 plates,what is Debbie's total value added? For all the 50 plates,what is the gallery's total value added?

Accepted Answer

To determine Debbie's value added,we mus

Question 18

In a small economy,consumption spending is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Accepted Answer

A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700 
A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700

Question 19

Which of the following is not directly counted in GDP?

Accepted Answer

A) investment expenditures 
B) government purchases 
C) intermediate goods 
D) consumer goods 
A) investment expenditures 
B) government purchases 
C) intermediate goods 
D) consumer goods

Question 20

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,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

Accepted Answer

A) $1,425 
B) $1,500 
C) $3,000 
D) $4,500 
A) $1,425 
B) $1,500 
C) $3,000 
D) $4,500

Residential investment includes spending by firms on office buildings.

Which of the following is not an example of a transfer payment?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

In 2015,the U.S.auto industry experienced rising sales.The automobile industry was experiencing the effects of

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

The GDP deflator is the

Which of the following equations correctly measures GDP in an economy?

Table 8-22 2011 2015 2016 -Refer to Table 8-22.Consider the data above for a simple economy: Using 2011 as the base year,calculate nominal GDP,real GDP,and the GDP deflator for 2016.Show your work.

Investment,as defined by economists,would include the purchase of a

Consumption expenditures do not include household purchases of

If prices are rising on average,then

If the value added of a firm is positive,will the firm necessarily have positive profits?

In a small economy,consumption spending is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Which of the following is not directly counted in GDP?

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,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

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

Residential investment includes spending by firms on office buildings.

Which of the following is not an example of a transfer payment?

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

If China decides to enact laws to clean up the environment,what would be the effect on GDP?

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

In 2015,the U.S.auto industry experienced rising sales.The automobile industry was experiencing the effects of

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

The GDP deflator is the

Which of the following equations correctly measures GDP in an economy?

Table 8-22 2011 2015 2016 -Refer to Table 8-22.Consider the data above for a simple economy: Using 2011 as the base year,calculate nominal GDP,real GDP,and the GDP deflator for 2016.Show your work.

Investment,as defined by economists,would include the purchase of a

Consumption expenditures do not include household purchases of

If prices are rising on average,then

If the value added of a firm is positive,will the firm necessarily have positive profits?

In a small economy,consumption spending is $6,000,government spending is $1,200,gross investment is $1,500,exports are $2,000,and imports are $1,000.What is gross domestic product?

Which of the following is not directly counted in GDP?

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,which,in turn,sells it to an art lover for $4,500.How much value does the gallery add?

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