Question 1

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) B) and C)
F) None of the above

Question 2

When economists refer to intangible items, they are referring to such things as

Accepted Answer

A)   illegal goods, and the value of such items is included in GDP.
B)   illegal goods, and the value of such items is excluded from GDP.
C)   hair styling and dental care, and the value of such items is included in GDP.
D)   hair styling and dental care, and the value of such items is excluded from GDP.E) All of the above
F) C) and D)

Question 3

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

Accepted Answer

A)   $24,450.
B)   $11,550.
C)   $15,300.
D)   $20,700.E) A) and D)
F) A) and C)

Question 4

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. In 2010, this country's GDP deflator was

Accepted Answer

A)   41.9.
B)   100.
C)   165.0.
D)   This cannot be calculated from the information given.E) C) and D)
F) A) and B)

Question 5

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

Accepted Answer

A) True 
 B)False

Question 6

Gross domestic product includes all

Accepted Answer

A)   legal and illegal final goods, but it excludes all legal and illegal final services.
B)   legal and illegal final goods and all legal and illegal final services.
C)   legal final goods and services, but it excludes illegal final goods and services.
D)   legal and illegal final goods and legal final services, but it excludes illegal final services.E) A) and B)
F) None of the above

Question 7

In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

Accepted Answer

The answer of In 2011 a country had a real...

Question 8

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

Accepted Answer

A)   a positive contribution both to investment and to GDP.
B)   a positive contribution both to consumption and to GDP.
C)   a positive contribution to GDP, but it does not affect investment or consumption.
D)   a positive contribution to investment, but it does not affect GDP.E) A) and D)
F) None of the above

Question 9

Suppose an economy produces only cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2009, the base year, the price of cheese was $10 per unit and the price of fish was $75 per unit. For 2010,

Accepted Answer

A)   nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5.
B)   nominal GDP is $500, real GDP is $800, and the GDP deflator is 160.
C)   nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5.
D)   nominal GDP is $800, real GDP is $500, and the GDP deflator is 160.E) A) and B)
F) All of the above

Question 10

In the United States in 2012, purchases of capital equipment, inventories, and structures represented approximately

Accepted Answer

A)   3 percent of GDP.
B)   7 percent of GDP.
C)   13 percent of GDP.
D)   15 percent of GDP.E) A) and B)
F) B) and C)

Question 11

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a true statement?

Accepted Answer

A)   International data leave few doubts that a nation's GDP per person is associated with its citizens' standard of living.
B)   Rich and poor countries often have vastly different standards of living, but similar levels of real GDP per person.
C)   The value of leisure time is included in the calculation of GDP per person.
D)   International data indicate that measures on the distribution of income are closely associated with GDP per person.E) A) and B)
F) None of the above

Question 13

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) B) and D)
F) B) and C)

Question 14

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) A) and D)
F) A) and C)

Question 15

The residents of Ireland earn $200 million of income from abroad. Residents of other countries earn $300 million in Ireland. Therefore, Ireland's

Accepted Answer

A)   net factor payments from abroad are positive, and its GDP is larger than its GNP.
B)   net factor payments from abroad are positive, and its GNP is larger than its GDP.
C)   net factor payments from abroad are negative, and its GDP is larger than its GNP.
D)   net factor payments from abroad are negative, and its GNP is larger than its GDP.E) C) and D)
F) A) and D)

Question 16

Which of the following is not included in U.S. GDP?

Accepted Answer

A)   The market value of an oil change that Ben performs on his own car.
B)   The market value of an oil change at Speedy Lube.
C)   The market value of oil purchased by Ben.
D)   Production of foreign citizens living in the United States that work in an oil packaging facility.E) C) and D)
F) A) and B)

Question 17

Which of the following statements about GDP is correct?

Accepted Answer

A)   GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services.
B)   Money continuously flows from households to firms and then back to households, and GDP measures this flow of money.
C)   GDP is generally regarded as the best single measure of a society's economic well­being.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 18

GDP includes the value of all

Accepted Answer

A)   final goods and services produced within a country using primarily market prices to measure the value of goods and services.
B)   final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.
C)   goods and services produced within a country using primarily market prices to measure the value of goods and services.
D)   goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.E) None of the above
F) B) and C)

Question 19

In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $1688
B)   $9000
C)   $13,500
D)   $15,000E) B) and C)
F) A) and C)

Question 20

According to the circular-flow diagram, GDP

Accepted Answer

A)   can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
B)   can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
C)   can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.
D)   can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.E) A) and D)
F) A) and C)

Exam 15: Measuring a Nations Income

In the United States in 2012, purchases of capital equipment, inventories, and structures represented approximately

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The residents of Ireland earn $200 million of income from abroad. Residents of other countries earn $300 million in Ireland. Therefore, Ireland's

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

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Which of the following is a true statement?

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According to the circular-flow diagram, GDP

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The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

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Which of the following is not included in U.S. GDP?

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Which of the following statements about GDP is correct?

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Suppose an economy produces only cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2009, the base year, the price of cheese was $10 per unit and the price of fish was $75 per unit. For 2010,

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GDP includes the value of all

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

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In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?

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GDP excludes the value of intermediate goods because their value is included in the value of final goods.

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A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

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In the economy of Talikastan in 2015, consumption was two-thirds of GDP, government purchases were $1000 more than investment, investment was one-ninth of GDP, and the value of exports exceeded the value of imports by $500. What was Talikastan's GDP in 2015?

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When economists refer to intangible items, they are referring to such things as

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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. In 2010, this country's GDP deflator was

Correct AnswerverifiedShow Answer

Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

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Gross domestic product includes all

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