Question 1

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 2

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Accepted Answer

A)   $18,000
B)   $22,000
C)   $39,000
D)   $57,000E) A) and B)
F) All of the above

Question 3

Thomas, a U.S. citizen, works only in Canada. The value of the output he produces is

Accepted Answer

A)   included in both U.S. GDP and U.S. GNP.
B)   included in U.S. GDP, but it is not included in U.S. GNP.
C)   included in U.S. GNP, but it is not included in U.S. GDP.
D)   included in neither U.S. GDP nor U.S. GNP.E) None of the above
F) All of the above

Question 4

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 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 C)
F) B) and C)

Question 5

onsumer goods that are produced, go into inventory, and are not sold during the current period are

Accepted Answer

A)   counted as intermediate goods and so are not included in current period GDP.
B)   counted in current period GDP only if the firm that produced them sells them to another firm.
C)   included in current period GDP as inventory investment.
D)   included in current period GDP as consumption.E) A) and D)
F) B) and D)

Question 6

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Accepted Answer

A)   not included in the current quarter GDP.
B)   included in the current quarter GDP as investment.
C)   included in the current quarter GDP as consumption.
D)   included in the current quarter GDP as a statistical discrepancy.E) A) and D)
F) B) and C)

Question 7

Table 23-1
The table below contains data for Chereaux for the year 2015.
 
-Refer to Table 23-1. Personal income for Chereaux in 2015 is

Accepted Answer

A)   $178.
B)   $201.
C)   $259.
D)   $196.E) B) and C)
F) A) and D)

Question 8

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

Accepted Answer

A)   the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP.
B)   the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP.
C)   the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP.
D)   the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and added to the investment category of 2015 GDP.E) A) and B)
F) None of the above

Question 9

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Accepted Answer

A)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83.
B)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16.
C)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16.
D)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.E) A) and C)
F) A) and B)

Question 10

Which of the following items is included in U.S. GDP?

Accepted Answer

A)   goods produced by foreign citizens working in the United States
B)   the difference in the price of the sale of an existing home and its original purchase price
C)   known illegal activities
D)   None of the above is included in U.S. GDP.E) B) and C)
F) None of the above

Question 11

For an economy as a whole, income must equal expenditure because

Accepted Answer

A)   the number of firms is equal to the number of households in an economy.
B)   individuals can only spend what they earn each period.
C)   every dollar of spending by some buyer is a dollar of income for some seller.
D)   every dollar of saving by some consumer is a dollar of spending by some other consumer.E) C) and D)
F) A) and B)

Question 12

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) A) and B)

Question 13

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

Accepted Answer

A)   increases by $40.
B)   increases by $220.
C)   increases by $280.
D)   increases by $1500.E) A) and C)
F) A) and B)

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 2018, this country's

Accepted Answer

A)   real GDP was $1080, and the GDP deflator was 156.3.
B)   real GDP was $1080, and the GDP deflator was 177.8.
C)   real GDP was $1920, and the GDP deflator was 177.8.
D)   real GDP was $1920, and the GDP deflator was 156.3.E) None of the above
F) B) and C)

Question 15

Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.
 
-Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

Accepted Answer

A)   8.09, -11.7
B)   8.09.16, -13.3
C)   1236.46, 11.7
D)   1236.46, 13.3E) B) and C)
F) All of the above

Question 16

New home construction is included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statistics is usually regarded as the best single measure of a society's economic well­being?

Accepted Answer

A)   the unemployment rate
B)   the inflation rate
C)   gross domestic product
D)   the trade deficitE) A) and D)
F) B) and C)

Question 18

Because every transaction has a buyer and a seller,

Accepted Answer

A)   GDP is more closely associated with an economy's income than it is with an economy's expenditure.
B)   every transaction contributes equally to an economy's income and to its expenditure.
C)   the number of firms must be equal to the number of households in a simple circular-flow diagram.
D)   firms' profits are necessarily zero in a simple circular­flow diagram.E) A) and B)
F) A) and C)

Question 19

Table 23-3
The table below contains data for the country of Crete for the year 2010.
 
-Refer to Table 23-3. What was Crete's investment in 2010?

Accepted Answer

A)   $675
B)   $1090
C)   $1491
D)   $1793E) A) and D)
F) B) and C)

Question 20

Real GDP will increase

Accepted Answer

A)   only when prices increase.
B)   only when output increases.
C)   when prices increase or output increases.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Exam 15: Measuring a Nations Income

For an economy as a whole, income must equal expenditure because

Correct AnswerverifiedShow Answer

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Correct AnswerverifiedShow Answer

Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

Correct AnswerverifiedShow Answer

Because every transaction has a buyer and a seller,

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Personal income for Chereaux in 2015 is

Correct AnswerverifiedShow Answer

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's investment in 2010?

Correct AnswerverifiedShow Answer

onsumer goods that are produced, go into inventory, and are not sold during the current period are

Correct AnswerverifiedShow Answer

Which of the following statistics is usually regarded as the best single measure of a society's economic well­being?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 2018, this country's

Correct AnswerverifiedShow Answer

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

Correct AnswerverifiedShow Answer

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct AnswerverifiedShow Answer

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

New home construction is included in the consumption component of GDP.

Correct AnswerverifiedShow Answer

Real GDP will increase

Correct AnswerverifiedShow Answer

Which of the following items is included in U.S. GDP?

Correct AnswerverifiedShow Answer

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

Correct AnswerverifiedShow Answer

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Correct AnswerverifiedShow Answer

Thomas, a U.S. citizen, works only in Canada. The value of the output he produces is

Correct AnswerverifiedShow 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

Which of the following statistics is usually regarded as the best single measure of a society's economic wellbeing?

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