Question 1

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 nominal GDP in 2014?

Accepted Answer

A)   $9,500
B)   $10,000
C)   $10,200
D)   $10,500E) C) and D)
F) B) and D)

Question 2

Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year.
 
-Refer to Table 23-12. Calculate real and nominal GDP for the year 2012.

Accepted Answer

Nominal GD...

Question 3

Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 4

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Accepted Answer

A)   consumption and imports
B)   consumption but not imports
C)   imports but not consumption
D)   neither consumption nor importsE) B) and C)
F) None of the above

Question 5

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Accepted Answer

A)   $11 million
B)   $10 million
C)   $7 million
D)   $9 millionE) All of the above
F) A) and B)

Question 6

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

Accepted Answer

A) True 
 B)False

Question 7

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)   nominal GDP from the base year that cannot be attributable to a change in real GDP.
B)   real GDP from the base year that cannot be attributable to a change in nominal GDP.
C)   nominal GDP from the base year that cannot be attributable to a change in prices.
D)   real GDP from the base year that cannot be attributable to a change in prices.E) A) and B)
F) A) and C)

Question 8

In 2012 a country had a real GDP $15.4 trillion and GDP deflator of 125. If that country's GDP deflator equals 115 in 2013, what is the rate of inflation in 2013?

Accepted Answer

The answer of In 2012 a country had a real...

Question 9

A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

Accepted Answer

A)   $500
B)   $700
C)   $1200
D)   $1700E) None of the above
F) B) and D)

Question 10

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.
 
-Refer to Table 23-6. This country's inflation rate from 2012 to 2013 was

Accepted Answer

A)   35.6%.
B)   25.8%.
C)   34.8%.
D)   100.0%.E) A) and B)
F) A) and C)

Question 11

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities
 
-Refer to Table 23-11.
What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Accepted Answer

Nominal GDP was $5x100 + $60x1...

Question 12

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

Accepted Answer

A)   reduced measured GDP.
B)   not affected measured GDP.
C)   increased measured GDP by the value of the restaurant meals.
D)   increased measured GDP by the value added by the restaurant's preparation and serving of the meals.E) A) and D)
F) All of the above

Question 13

A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

Accepted Answer

A)   Mexican GNP and U.S. GNP.
B)   Mexican GDP and U.S. GNP.
C)   Mexican GNP and U.S. GDP.
D)   Mexican GDP and U.S. GDP.E) None of the above
F) B) and D)

Question 14

How is net national product NNP)  calculated?

Accepted Answer

A)   Saving is subtracted from the total income of a nation's citizens.
B)   Saving is added to the total income of a nation's citizens
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are added to the total income of a nation's citizens.E) None of the above
F) All of the above

Question 15

U.S. GDP and U.S. GNP are related as follows:

Accepted Answer

A)   GNP = GDP + Value of exported goods - Value of imported goods.
B)   GNP = GDP - Value of exported goods + Value of imported goods.
C)   GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad.
D)   GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.E) C) and D)
F) All of the above

Question 16

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)   The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP.
B)   The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP.
C)   The 2015 sale increased 2015 GDP by $255,000; and caused 2007 GDP to be revised downward by $20,000.
D)   The 2015 sale affected neither 2007 GDP nor 2015 GDP.E) None of the above
F) B) and C)

Question 17

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Accepted Answer

A)   consumption, investment and imports
B)   only consumption and investment
C)   only consumption and imports
D)   only investment and importsE) All of the above
F) B) and D)

Question 18

The government of a country, which has adopted American GDP accounting conventions, reported that seasonally adjusted GDP in quarter 3 was $48 billion at an annual rate. This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Accepted Answer

A)   $4 billion.
B)   $12 billion.
C)   $16 billion.
D)   $48 billion.E) A) and B)
F) C) and D)

Question 19

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   households' purchases of newly constructed homes
B)   net additions to firms' inventories
C)   firms' purchases of capital equipment
D)   All of the above are correct.E) C) and D)
F) A) and B)

Exam 5: Measuring a Nations Income

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. This country's inflation rate from 2012 to 2013 was

Correct AnswerverifiedShow Answer

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Correct AnswerverifiedShow Answer

A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

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U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

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In 2012 a country had a real GDP $15.4 trillion and GDP deflator of 125. If that country's GDP deflator equals 115 in 2013, what is the rate of inflation in 2013?

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A Mexican oil field service company works on oil rigs in the U.S. The value of the company's services produced by Mexican citizens and the equipment they own is included in

Correct AnswerverifiedShow Answer

How is net national product NNP) calculated?

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Which of the following is included in the investment component of GDP?

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A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Correct AnswerverifiedShow Answer

Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Correct AnswerverifiedShow Answer

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

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 nominal GDP in 2014?

Correct AnswerverifiedShow Answer

Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2012.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

Correct AnswerverifiedShow Answer

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

Correct AnswerverifiedShow Answer

U.S. GDP and U.S. GNP are related as follows:

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Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Correct AnswerverifiedNominal GDP was $5x100 + $60x1...View AnswerShow Answer

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

Correct AnswerverifiedShow Answer

The GDP deflator for years subsequent to the base year measures the change in

Correct AnswerverifiedShow Answer

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

Correct AnswerverifiedShow Answer

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Nominal GDP was $5x100 + $60x1...
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