Question 1

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Accepted Answer

A)   GDP would definitely increase, despite the fact that GDP includes leisure.
B)   GDP would definitely increase because GDP excludes leisure.
C)   GDP could either increase or decrease because GDP includes leisure.
D)   GDP could either increase or decrease because GDP excludes leisure.E) B) and C)
F) None of the above

Question 2

Table 23-9
A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.
Prices and Quantities
 
-Refer to Table 23-9. This country's inflation rate from 2009 to 2010 to the nearest tenth was

Accepted Answer

A)   2.9%
B)   8.8%
C)   13.3%
D)   None of the above is correct.E) A) and C)
F) All of the above

Question 3

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

Accepted Answer

A)   83.33, and this indicates that the price level has decreased by 16.67 percent since the base year.
B)   83.33, and this indicates that the price level has increased by 83.33 percent since the base year.
C)   120, and this indicates that the price level has increased by 20 percent since the base year.
D)   120, and this indicates that the price level has increased by 120 percent since the base year.E) A) and D)
F) None of the above

Question 4

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Accepted Answer

A) True 
 B)False

Question 5

Government purchases include spending on goods and services by

Accepted Answer

A)   the federal government, but not by state or local governments.
B)   federal and state governments, but not by local governments.
C)   federal, state, and local governments.
D)   federal, state, and local governments, as well as household spending by employees of those governments.E) None of the above
F) All of the above

Question 6

Suppose there are only two firms in an economy: Cowhide, Inc. produces leather and sells it to Couches, Inc., which produces and sells leather furniture. With each $1,000 worth of leather that it buys from Cowhide, Inc., Couches, Inc. produces a couch and sells it for $2,600. Neither firm had any inventory at the beginning of 2015. During that year, Cowhide produced enough leather for 25 couches. Couches, Inc. bought 80% of that leather for $20,000 and promised to buy the remaining 20% for $5,000 in 2016. Couches, Inc. produced 20 couches during 2015 and sold each one during that year for $2,600. What was the economy's GDP for 2015?

Accepted Answer

A)   $25,000
B)   $52,000
C)   $57,000
D)   $65,000E) A) and B)
F) A) and C)

Question 7

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Accepted Answer

GDP = C + I + G + NX = $5.5 tr...

Question 8

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Accepted Answer

A)   $150 to GDP.
B)   $250 to GDP.
C)   between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.
D)   $400 to GDP.E) B) and D)
F) All of the above

Question 9

Which of the following is correct?

Accepted Answer

A)   Nominal GDP is always less than real GDP.
B)   Nominal GDP is always greater than real GDP.
C)   Nominal GDP equals real GDP in the base year.
D)   Nominal GDP equals real GDP in all years but the base year.E) All of the above
F) A) and D)

Question 10

For monitoring fluctuations in the national economy, which measure of income is best?

Accepted Answer

A)   GDP
B)   GNP
C)   NNP
D)   It does not matter very much which measure we use.E) A) and B)
F) B) and C)

Question 11

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following examples of production of goods and services would be included in U.S. GDP?

Accepted Answer

A)   Sally, a Canadian citizen, works on a drilling crew in North Dakota for Northland Gas Services, and Northland sells the natural gas to a utility company in Canada.
B)   Jim grows pecans for his family in the yard of their San Antonio home.
C)   Joe grows marijuana in his Kansas City home and sells it to his friends and neighbors.
D)   None of the above examples of production would be included in U.S. GDP.E) A) and B)
F) A) and C)

Question 13

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Accepted Answer

A)   87.5.
B)   114.3.
C)   400.
D)   896.E) B) and C)
F) None of the above

Question 14

Which of the following is a way to compute GDP?

Accepted Answer

A)   total income earned.
B)   total expenditures on final goods.
C)   add up the market values of all final goods and services.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

GDP

Accepted Answer

A)   is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being.
B)   is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
C)   is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being.
D)   is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well­being.E) A) and D)
F) A) and C)

Question 16

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

Accepted Answer

A)   $2.5 billion.
B)   $10 billion.
C)   $40 billion.
D)   $100 billion.E) A) and C)
F) A) and D)

Question 17

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Accepted Answer

The GDP deflator for 2010 was ...

Question 18

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. What was this country's GDP deflator in 2017?

Accepted Answer

A)   123.4
B)   116.7
C)   120.0
D)   None of the above is correct.E) B) and C)
F) B) and D)

Question 19

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

Accepted Answer

A)   $2.72 billion.
B)   $17 billion.
C)   $36.8 billion.
D)   $43 billion.E) A) and B)
F) All of the above

Question 20

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A)   capital
B)   consumption
C)   investment
D)   costsE) C) and D)
F) B) and C)

Exam 5: Measuring a Nations Income

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Correct Answer
verified

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Correct Answer
verified

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct Answer
verified

Which of the following is a way to compute GDP?

Correct Answer
verified

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

Correct Answer
verified

Which of the following examples of production of goods and services would be included in U.S. GDP?

Correct Answer
verified

Table 23-9 A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities -Refer to Table 23-9. This country's inflation rate from 2009 to 2010 to the nearest tenth was

Correct Answer
verified

Government purchases include spending on goods and services by

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

GDP

Correct Answer
verified

For monitoring fluctuations in the national economy, which measure of income is best?

Correct Answer
verified

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Correct Answer
verified

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

Correct Answer
verified

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct Answer
verified

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

Correct Answer
verified

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Correct Answer
verified
The GDP deflator for 2010 was ...
View Answer

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Correct Answer
verified

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct Answer
verified

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Correct Answer
verified
GDP = C + I + G + NX = $5.5 tr...
View Answer

Exam 5: Measuring a Nations Income

Suppose the government passes a law eliminating holidays and, as a result, the production of goods and services increases because people work more days per year and thus enjoy less leisure per year) . Based on this scenario, which of the following statements is correct?

Correct AnswerverifiedShow Answer

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Correct AnswerverifiedShow Answer

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct AnswerverifiedShow Answer

Which of the following is a way to compute GDP?

Correct AnswerverifiedShow Answer

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

Correct AnswerverifiedShow Answer

Which of the following examples of production of goods and services would be included in U.S. GDP?

Correct AnswerverifiedShow Answer

Table 23-9 A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities -Refer to Table 23-9. This country's inflation rate from 2009 to 2010 to the nearest tenth was

Correct AnswerverifiedShow Answer

Government purchases include spending on goods and services by

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

GDP

Correct AnswerverifiedShow Answer

For monitoring fluctuations in the national economy, which measure of income is best?

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Correct AnswerverifiedShow Answer

If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is

Correct AnswerverifiedShow Answer

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

Correct AnswerverifiedShow Answer

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Correct AnswerverifiedThe GDP deflator for 2010 was ...View AnswerShow Answer

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct AnswerverifiedShow Answer

Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Correct AnswerverifiedGDP = C + I + G + NX = $5.5 tr...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The GDP deflator for 2010 was ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
GDP = C + I + G + NX = $5.5 tr...
View Answer