Question 1

Nominal GDP will definitely increase when

Accepted Answer

A)   prices increase and output increases.
B)   prices increase and output decreases.
C)   prices decrease and output increases.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 2

In the United States in 2012, government purchases of goods and services were

Accepted Answer

A)   larger than consumption, but smaller than investment.
B)   larger than investment, but smaller than consumption.
C)   smaller than both consumption and investment.
D)   larger than both consumption and investment.E) None of the above
F) A) and B)

Question 3

The GDP deflator is the ratio of

Accepted Answer

A)   real GDP to nominal GDP multiplied by 100.
B)   real GDP to the inflation rate multiplied by 100.
C)   nominal GDP to real GDP multiplied by 100.
D)   nominal GDP to the inflation rate multiplied by 100.E) All of the above
F) C) and D)

Question 4

If a U.S. citizen buys a television made in Korea by a Korean firm, then

Accepted Answer

A)   U.S. net exports decrease and U.S. GDP decreases.
B)   U.S. net exports are unaffected and U.S. GDP decreases.
C)   U.S. net exports are unaffected and U.S. GDP is unaffected.
D)   U.S. net exports decrease and U.S. GDP is unaffected.E) All of the above
F) A) and D)

Question 5

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays $2,000 in Social Security benefits to a retired person.
B)   The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
C)   The state of Nebraska pays $1,000 to help a low-income family pay its medical bills.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 6

Net exports equal

Accepted Answer

A)   exports plus imports.
B)   imports minus exports.
C)   Y - C + I + G) .
D)   Y - C - I - G) .E) A) and B)
F) None of the above

Question 7

A U.S.-owned automobile factory uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Accepted Answer

A)   $300,000
B)   $500,000
C)   $600,000
D)   $700,000E) A) and B)
F) A) and C)

Question 8

Which of the following is an example of depreciation?

Accepted Answer

A)   falling stock prices
B)   the retirement of several employees
C)   computers becoming obsolete
D)   All of the above are examples of depreciation.E) None of the above
F) All of the above

Question 9

In 2012, U.S. GDP was almost

Accepted Answer

A)   $16 trillion.
B)   $12 trillion.
C)   $15 trillion.
D)   $14 trillion.E) A) and C)
F) B) and D)

Question 10

A transfer payment is

Accepted Answer

A)   a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location.
B)   a payment that is automatically transferred from your bank account to pay a bill or some other obligation.
C)   a form of government spending that is not made in exchange for a currently produced good or service.
D)   the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.E) None of the above
F) A) and D)

Question 11

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Accepted Answer

A) True 
 B)False

Question 12

Changes in the GDP deflator reflect

Accepted Answer

A)   only changes in prices.
B)   only changes in the amounts being produced.
C)   both changes in prices and changes in the amounts being produced.
D)   neither changes in prices nor changes in the amounts being produced.E) All of the above
F) B) and C)

Question 13

If an economy's GDP rises, then it must be the case that the economy's

Accepted Answer

A)   income rises and saving falls.
B)   income and saving both rise.
C)   income rises and expenditure falls.
D)   income and expenditure both rise.E) None of the above
F) C) and D)

Question 14

Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015.
Prices and Quantities
 
-Refer to Table 23-5. In 2017, this country's

Accepted Answer

A)   real GDP was $900, and the GDP deflator was 138.9.
B)   real GDP was $1250, and the GDP deflator was 128.0.
C)   real GDP was $900, and the GDP deflator was 128.0.
D)   real GDP was $1250, and the GDP deflator was 138.9.E) A) and D)
F) A) and C)

Question 15

For the economy as a whole, how does income compare to expenditures? Explain.

Accepted Answer

For the economy as a whole inc...

Question 16

Which of the following is included in the calculation of GDP?

Accepted Answer

A)   The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country.
B)   The purchase of a new edition of a foreign textbook that was produced in a different nation.
C)   The purchase of ink and paper supplies by a textbook company for the production of new textbooks.
D)   The purchase of a used textbook from a friend who took the same class last year.E) A) and B)
F) A) and C)

Question 17

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.E) A) and B)
F) A) and D)

Question 18

What are exports, and how are they different from imports?

Accepted Answer

Exports are domestically produ...

Question 19

An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarters)  doesdo)  the value of the shoes add to U.S. GDP?

Accepted Answer

A)   the second and third quarters
B)   the second quarter but not the third quarter
C)   the third but not the second quarter
D)   neither the second nor the third quarterE) C) and D)
F) None of the above

Question 20

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Accepted Answer

A) True 
 B)False

Exam 5: Measuring a Nations Income

A U.S.-owned automobile factory uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

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Nominal GDP will definitely increase when

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The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

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The GDP deflator is the ratio of

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Net exports equal

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In 2012, U.S. GDP was almost

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An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarters) doesdo) the value of the shoes add to U.S. GDP?

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Which of the following is included in the calculation of GDP?

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In the United States in 2012, government purchases of goods and services were

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Which of the following is an example of depreciation?

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If an economy's GDP rises, then it must be the case that the economy's

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Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. In 2017, this country's

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A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

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If a U.S. citizen buys a television made in Korea by a Korean firm, then

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For the economy as a whole, how does income compare to expenditures? Explain.

Correct AnswerverifiedFor the economy as a whole inc...View AnswerShow Answer

What are exports, and how are they different from imports?

Correct AnswerverifiedExports are domestically produ...View AnswerShow Answer

Changes in the GDP deflator reflect

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Which of the following items is counted as part of government purchases?

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Recessions are associated with lower incomes, rising unemployment, and falling profits.

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A transfer payment is

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For the economy as a whole inc...
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Exports are domestically produ...
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