Question 1

In 1820,the country with the highest per capita GDP was

Accepted Answer

A)  Australia. 
B)  the United States. 
C)  Austria. 
D)  Germany. 
E)  the Netherlands. 
A)  Australia. 
B)  the United States. 
C)  Austria. 
D)  Germany. 
E)  the Netherlands.

Question 2

List and explain the two different approaches used to measure GDP.

Accepted Answer

The two different approaches are: the ex

Question 3

Which of the following is the correct equation for computing personal income?

Accepted Answer

A)  Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B)  Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C)  Personal income = National income - taxes 
D)  Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E)  none of the above 
A)  Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B)  Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C)  Personal income = National income - taxes 
D)  Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E)  none of the above

Question 4

Underground activities are not counted in GDP because

Accepted Answer

A)  some underground activities are illegal and the government doesn't want to place,for instance,drug dealers on an equal footing with small businesses. 
B)  there are no written records of underground activities. 
C)  of a decision made in the 1930s and no one has gotten around to changing it yet. 
D)  although it is possible to accurately measure underground activities,it is harder than measuring above-ground activities because with the latter,one doesn't have to dig as deep. 
A)  some underground activities are illegal and the government doesn't want to place,for instance,drug dealers on an equal footing with small businesses. 
B)  there are no written records of underground activities. 
C)  of a decision made in the 1930s and no one has gotten around to changing it yet. 
D)  although it is possible to accurately measure underground activities,it is harder than measuring above-ground activities because with the latter,one doesn't have to dig as deep.

Question 5

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

Accepted Answer

A)  No,since data on services and prices are missing. 
B)  No,since data on inventory investment are missing. 
C)  No,since data on inventory investment and services are missing. 
D)  No,since data on services are missing. 
E)  Yes. 
A)  No,since data on services and prices are missing. 
B)  No,since data on inventory investment are missing. 
C)  No,since data on inventory investment and services are missing. 
D)  No,since data on services are missing. 
E)  Yes.

Question 6

Which of the following statements is false?

Accepted Answer

A)  Domestic income is the total income earned by the people and businesses within a country's borders. 
B)  National income is the total income earned by U.S.citizens and businesses,no matter where they reside or are located. 
C)  Corporate profits is the largest component of national income. 
D)  National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
A)  Domestic income is the total income earned by the people and businesses within a country's borders. 
B)  National income is the total income earned by U.S.citizens and businesses,no matter where they reside or are located. 
C)  Corporate profits is the largest component of national income. 
D)  National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest.

Question 7

Exhibit 7-4
Economic Data for Country A
  
-Refer to Exhibit 7-4.Did Country A experience a recession (based on the standard definition)in 2012?

Accepted Answer

A)  Yes,because Real GDP declined during two consecutive quarters in 2012 
B)  No,because Real GDP did not decline during three consecutive quarters in 2012. 
C)  Yes,because Real GDP was lower at the end of the year than it was at the beginning of the year. 
D)  This information cannot be determined because the determination of a recession is based upon GDP not Real GDP. 
A)  Yes,because Real GDP declined during two consecutive quarters in 2012 
B)  No,because Real GDP did not decline during three consecutive quarters in 2012. 
C)  Yes,because Real GDP was lower at the end of the year than it was at the beginning of the year. 
D)  This information cannot be determined because the determination of a recession is based upon GDP not Real GDP.

Question 8

Exhibit 7-5
Economic Data for Country Z
  
-Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 2 and year 3?

Accepted Answer

A)  -3.0% 
B)  2.6% 
C)  14.0% 
D)  -2.2% 
A)  -3.0% 
B)  2.6% 
C)  14.0% 
D)  -2.2%

Question 9

Net interest is the interest paid out by US households and government minus the interest income they received.

Accepted Answer

A) True 
 B)False

Question 10

Net domestic product is the total value of

Accepted Answer

A)  all final goods and services produced within a country's borders in a year. 
B)  only intermediate goods produced within a country's borders in a year. 
C)  all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D)  only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E)  all final goods and services produced within a country's borders in a year minus capital consumption allowance. 
A)  all final goods and services produced within a country's borders in a year. 
B)  only intermediate goods produced within a country's borders in a year. 
C)  all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D)  only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E)  all final goods and services produced within a country's borders in a year minus capital consumption allowance.

Question 11

You have data for compensation of employees,proprietors' income,rental income,and net interest.Can you compute national income?

Accepted Answer

A)  Yes. 
B)  No,since data on indirect business taxes are missing. 
C)  No,since data on corporate profits is missing. 
D)  No,since data on the capital consumption allowance is missing. 
E)  No,since net interest has not been adjusted for profits. 
A)  Yes. 
B)  No,since data on indirect business taxes are missing. 
C)  No,since data on corporate profits is missing. 
D)  No,since data on the capital consumption allowance is missing. 
E)  No,since net interest has not been adjusted for profits.

Question 12

Exhibit 7-1
  
-Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

Accepted Answer

A)  GDP - $222 
B)  GDP - $331 
C)  GDP - $412 
D)  GDP - $295 
E)  GDP + $134 
A)  GDP - $222 
B)  GDP - $331 
C)  GDP - $412 
D)  GDP - $295 
E)  GDP + $134

Question 13

For economists trying to determine peoples' preferences,observing how people act is more important than what people say in surveys.

Accepted Answer

A) True 
 B)False

Question 14

Look at the following data: personal income = $4,900 billion;personal taxes = $900 billion;transfer payments = $980 billion.What is disposable income?

Accepted Answer

A)  $3,200 billion 
B)  $4,000 billion 
C)  $4,980 billion 
D)  $1,880 billion 
E)  There is not enough information to answer the question. 
A)  $3,200 billion 
B)  $4,000 billion 
C)  $4,980 billion 
D)  $1,880 billion 
E)  There is not enough information to answer the question.

Question 15

Sales tax is an example of an indirect business tax.

Accepted Answer

A) True 
 B)False

Question 16

Net domestic product (NDP)is the total value of new goods available in the economy after worn out capital goods have been replaced.

Accepted Answer

A) True 
 B)False

Question 17

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

Accepted Answer

A)  the Netherlands;New Zealand;the United States. 
B)  the Netherlands;Australia;Switzerland. 
C)  the United States;the United States;the United States. 
D)  Austria;Australia;New Zealand. 
A)  the Netherlands;New Zealand;the United States. 
B)  the Netherlands;Australia;Switzerland. 
C)  the United States;the United States;the United States. 
D)  Austria;Australia;New Zealand.

Question 18

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

Accepted Answer

A)  It had no impact on GDP. 
B)  GDP increased by $300. 
C)  GDP increased by $20,000. 
D)  GDP increased by $19,700. 
E)  GDP increased by $20,300. 
A)  It had no impact on GDP. 
B)  GDP increased by $300. 
C)  GDP increased by $20,000. 
D)  GDP increased by $19,700. 
E)  GDP increased by $20,300.

Question 19

Exhibit 7-3
  
-Refer to Exhibit 7-3.Net exports is equal to

Accepted Answer

A)  $200. 
B)  -$200. 
C)  $600. 
D)  -$1,400. 
E)  $1,400 
A)  $200. 
B)  -$200. 
C)  $600. 
D)  -$1,400. 
E)  $1,400

Question 20

Exhibit 7-1
  
-Refer to Exhibit 7-1.What is the value of net domestic product?

Accepted Answer

A)  $5,840 
B)  $5,731 
C)  $5,650 
D)  $5,767 
E)  $6,637 
A)  $5,840 
B)  $5,731 
C)  $5,650 
D)  $5,767 
E)  $6,637

Exam 7: Macroeconomic Measurements, Gdp and Real Gdp

In 1820,the country with the highest per capita GDP was

List and explain the two different approaches used to measure GDP.

Which of the following is the correct equation for computing personal income?

Underground activities are not counted in GDP because

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

Which of the following statements is false?

Exhibit 7-4 Economic Data for Country A -Refer to Exhibit 7-4.Did Country A experience a recession (based on the standard definition)in 2012?

Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 2 and year 3?

Net interest is the interest paid out by US households and government minus the interest income they received.

Net domestic product is the total value of

You have data for compensation of employees,proprietors' income,rental income,and net interest.Can you compute national income?

Exhibit 7-1 -Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

For economists trying to determine peoples' preferences,observing how people act is more important than what people say in surveys.

Look at the following data: personal income = $4,900 billion;personal taxes = $900 billion;transfer payments = $980 billion.What is disposable income?

Sales tax is an example of an indirect business tax.

Net domestic product (NDP)is the total value of new goods available in the economy after worn out capital goods have been replaced.

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

Exhibit 7-3 -Refer to Exhibit 7-3.Net exports is equal to

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of net domestic product?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

In 1820 the country with the highest per capita GDP was ____________.In 1900 the country that ranked #1 in terms of per capita GDP was _ and fifty years later the top ranking was held by _________________.