Question 1

The "underground economy" refers to

Accepted Answer

A) the buying and selling of goods that is concealed from the government. 
B) the production of goods and services used by the government for covert spy operations. 
C) the sector of the economy that earns profits that are higher than average. 
D) the formal sector of the economy in developing countries. 
A) the buying and selling of goods that is concealed from the government. 
B) the production of goods and services used by the government for covert spy operations. 
C) the sector of the economy that earns profits that are higher than average. 
D) the formal sector of the economy in developing countries.

Question 2

If the GDP deflator is less than 100,which will be higher: nominal GDP or real GDP? Why?

Accepted Answer

Real GDP will be higher.The GD

Question 3

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A) If nominal GDP increases from one year to the next,we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next,we know that production of goods and services has risen. 
A) If nominal GDP increases from one year to the next,we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next,we know that production of goods and services has risen.

Question 4

What is the largest component of spending in the United States?

Accepted Answer

A) consumption spending 
B) investment spending 
C) government spending 
D) net investment spending 
A) consumption spending 
B) investment spending 
C) government spending 
D) net investment spending

Question 5

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Accepted Answer

A) CPI;real GDP;nominal GDP 
B) GDP deflator;real GDP;nominal GDP 
C) GDP deflator;nominal GDP;real GDP 
D) PPI;nominal GDP;real GDP 
E) PPI;real GDP;nominal GDP 
A) CPI;real GDP;nominal GDP 
B) GDP deflator;real GDP;nominal GDP 
C) GDP deflator;nominal GDP;real GDP 
D) PPI;nominal GDP;real GDP 
E) PPI;real GDP;nominal GDP

Question 6

If the quantity of goods and services produced in the economy decreases,

Accepted Answer

A) it may be possible for real GDP to increase. 
B) real GDP would certainly increase. 
C) it may be possible for nominal GDP to increase. 
D) nominal GDP would certainly increase. 
A) it may be possible for real GDP to increase. 
B) real GDP would certainly increase. 
C) it may be possible for nominal GDP to increase. 
D) nominal GDP would certainly increase.

Question 7

If an American firm opens a production facility in India,the total value of the production will be included in the

Accepted Answer

A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India. 
A) gross domestic product of the United States. 
B) national income of the United States. 
C) gross domestic product of India. 
D) national income of India.

Question 8

GDP is not a complete measure of well-being.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following accurately describes an effect of hurricane Katrina on GDP?

Accepted Answer

A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D) GDP would increase well-being. 
A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. 
D) GDP would increase well-being.

Question 10

Value added equals the market price of the firm's product minus

Accepted Answer

A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment. 
A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment.

Question 11

Macroeconomics seeks to understand

Accepted Answer

A) economic growth,business cycles,and inflation. 
B) industry sales,marketing strategies,and corporate growth. 
C) product demand,product cost,and profit maximization. 
D) public choices,private choices,and consumer maximization. 
A) economic growth,business cycles,and inflation. 
B) industry sales,marketing strategies,and corporate growth. 
C) product demand,product cost,and profit maximization. 
D) public choices,private choices,and consumer maximization.

Question 12

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

Accepted Answer

A) U.S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP. 
A) U.S.GDP. 
B) Canada's GDP. 
C) Brazil's GDP. 
D) Brazil's GNP.

Question 13

Table 8-25
  
-Refer to Table 8-25.Given the following information,calculate the rate of increase in the price level from 2015 to 2016.Use the percent change in the GDP deflator.

Accepted Answer

To calculate the rate of chang

Question 14

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Accepted Answer

A) the sale of a used door to a homeowner 
B) the sale of a new door to homeowner 
C) the sale of a used door to TapKon construction for installation into a new home 
D) the sale of a new door to TapKon construction for installation into a new home 
A) the sale of a used door to a homeowner 
B) the sale of a new door to homeowner 
C) the sale of a used door to TapKon construction for installation into a new home 
D) the sale of a new door to TapKon construction for installation into a new home

Question 15

The largest component of spending in GDP is

Accepted Answer

A) consumption spending. 
B) investment spending. 
C) government spending. 
D) net export spending. 
A) consumption spending. 
B) investment spending. 
C) government spending. 
D) net export spending.

Question 16

Which of the following is not true about the composition of GDP in 2014?

Accepted Answer

A) The majority of consumer spending is on durable goods. 
B) Purchases made by state and local governments are greater than purchases made by the federal government. 
C) Imports are greater than exports. 
D) Business fixed investment is the largest component of investment. 
A) The majority of consumer spending is on durable goods. 
B) Purchases made by state and local governments are greater than purchases made by the federal government. 
C) Imports are greater than exports. 
D) Business fixed investment is the largest component of investment.

Question 17

Investment spending includes spending on

Accepted Answer

A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments. 
A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments.

Question 18

Depreciation is

Accepted Answer

A) the value of worn-out equipment,machinery,and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market,net of dividends. 
A) the value of worn-out equipment,machinery,and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market,net of dividends.

Question 19

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) the underground economy. 
B) intermediate goods. 
C) inflation. 
D) exports. 
A) the underground economy. 
B) intermediate goods. 
C) inflation. 
D) exports.

Question 20

If a country passes a labor law limiting the number of hours of work per week,GDP would ________ and leisure would ________.

Accepted Answer

A) decrease;increase 
B) increase;increase 
C) decrease;decrease 
D) increase;decrease 
A) decrease;increase 
B) increase;increase 
C) decrease;decrease 
D) increase;decrease

The "underground economy" refers to

If the GDP deflator is less than 100,which will be higher: nominal GDP or real GDP? Why?

Which of the following is a true statement about real and nominal GDP?

What is the largest component of spending in the United States?

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

If the quantity of goods and services produced in the economy decreases,

If an American firm opens a production facility in India,the total value of the production will be included in the

GDP is not a complete measure of well-being.

Which of the following accurately describes an effect of hurricane Katrina on GDP?

Value added equals the market price of the firm's product minus

Macroeconomics seeks to understand

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

Table 8-25 -Refer to Table 8-25.Given the following information,calculate the rate of increase in the price level from 2015 to 2016.Use the percent change in the GDP deflator.

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

The largest component of spending in GDP is

Which of the following is not true about the composition of GDP in 2014?

Investment spending includes spending on

Depreciation is

Gross domestic product understates the total production of final goods and services because of the omission of

If a country passes a labor law limiting the number of hours of work per week,GDP would and leisure would .

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

The "underground economy" refers to

If the GDP deflator is less than 100,which will be higher: nominal GDP or real GDP? Why?

Which of the following is a true statement about real and nominal GDP?

What is the largest component of spending in the United States?

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

If the quantity of goods and services produced in the economy decreases,

If an American firm opens a production facility in India,the total value of the production will be included in the

GDP is not a complete measure of well-being.

Which of the following accurately describes an effect of hurricane Katrina on GDP?

Value added equals the market price of the firm's product minus

Macroeconomics seeks to understand

When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada,the value of the furniture produced will be counted as a final good in

Table 8-25 -Refer to Table 8-25.Given the following information,calculate the rate of increase in the price level from 2015 to 2016.Use the percent change in the GDP deflator.

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

The largest component of spending in GDP is

Which of the following is not true about the composition of GDP in 2014?

Investment spending includes spending on

Depreciation is

Gross domestic product understates the total production of final goods and services because of the omission of

If a country passes a labor law limiting the number of hours of work per week,GDP would ________ and leisure would ________.

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

The is a measure of the price level and is calculated by dividing by and multiplying by 100.

If a country passes a labor law limiting the number of hours of work per week,GDP would and leisure would .