Question 1

U.S. GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

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) A) and C)

Question 4

A macroeconomist is interested in

Accepted Answer

A)   explaining how changes in sellers' behavior affect prices of a particular good.
B)   explaining price changes in a particular market.
C)   explaining why the unemployment rate is higher.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 5

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Accepted Answer

A) True 
 B)False

Question 6

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 B)
F) C) and D)

Question 7

In 2012, U.S. net exports were

Accepted Answer

A)   positive and about 3.5 percent the size of GDP.
B)   positive and about 6 percent the size of GDP.
C)   negative and about 3.5 percent the size of GDP.
D)   negative and about 6 percent the size of GDP.E) A) and C)
F) B) and C)

Question 8

In computing GDP, market prices are used to value final goods and services because

Accepted Answer

A)   market prices do not change much over time, so it is easy to make comparisons between years.
B)   market prices reflect the values of goods and services.
C)   market prices reflect the quantity sold.
D)   None of the above is correct; market prices are not used in computing GDP.E) A) and B)
F) None of the above

Question 9

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 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) B) and C)
F) A) and B)

Question 10

Table 23-8
A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. 
-Refer to Table 23-8. In 2012, nominal GDP is

Accepted Answer

A)   $191.50, and real GDP is $170.
B)   $157, and real GDP is $170.
C)   $191.50, and real GDP is $157.
D)   $170, and real GDP is $227.50.E) A) and B)
F) A) and C)

Question 11

Between 1929 and 1933, NNP measured in current prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75.
a. What was the percentage decline in nominal NNP from 1929 to1933?
b. What was the percentage decline in real NNP from 1929 to 1933? Show your work.

Accepted Answer

a. NNP measured in current prices is nom...

Question 12

Transfer payments are

Accepted Answer

A)   included in GDP because they represent income to individuals.
B)   included in GDP because they eventually will be spent on consumption.
C)   not included in GDP because they are not payments for currently produced goods or services.
D)   not included in GDP because taxes will have to be raised to pay for them.E) B) and C)
F) B) and D)

Question 13

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

Question 14

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 15

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) A) and B)
F) A) and C)

Question 16

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) All of the above
F) B) and D)

Question 17

Table 23-1
The table below contains data for Chereaux for the year 2015. 
-Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

Accepted Answer

A)   $214.
B)   $200.
C)   $204.
D)   $230.E) None of the above
F) A) and B)

Question 18

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Accepted Answer

A) True 
 B)False

Question 19

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 2013.

Accepted Answer

Nominal GD...

Question 20

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 C)
F) None of the above

Exam 23: Measuring a Nations Income

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,

Correct Answer
verified

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 Answer
verified

Transfer payments are

Correct Answer
verified

Table 23-8 A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-8. In 2012, nominal GDP is

Correct Answer
verified

U.S. GDP excludes the production of most illegal goods.

Correct Answer
verified

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 2013.

Correct Answer
verified
Nominal GD...
View Answer

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct Answer
verified

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 Answer
verified

In 2012, U.S. net exports were

Correct Answer
verified

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Correct Answer
verified

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 Answer
verified

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 Answer
verified

Which of the following is correct?

Correct Answer
verified

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Correct Answer
verified

A macroeconomist is interested in

Correct Answer
verified

Correct Answer
verified
a. NNP measured in current prices is nom...
View Answer

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

Correct Answer
verified

In computing GDP, market prices are used to value final goods and services because

Correct Answer
verified

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

Correct Answer
verified

GDP

Correct Answer
verified

Exam 23: Measuring a Nations Income

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,

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

Transfer payments are

Correct AnswerverifiedShow Answer

Table 23-8 A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-8. In 2012, nominal GDP is

Correct AnswerverifiedShow Answer

U.S. GDP excludes the production of most illegal goods.

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 2013.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

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

In 2012, U.S. net exports were

Correct AnswerverifiedShow Answer

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Correct AnswerverifiedShow Answer

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

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

Which of the following is correct?

Correct AnswerverifiedShow Answer

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Correct AnswerverifiedShow Answer

A macroeconomist is interested in

Correct AnswerverifiedShow Answer

Correct Answerverifieda. NNP measured in current prices is nom...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

In computing GDP, market prices are used to value final goods and services because

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is

Correct AnswerverifiedShow Answer

GDP

Correct AnswerverifiedShow Answer

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Nominal GD...
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a. NNP measured in current prices is nom...
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