Question 1

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro.In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro.What was its inflation rate in 2011? Show your work.

Accepted Answer

The GDP deflator for 2010 was ...

Question 2

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

Question 3

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Accepted Answer

A)   market prices.
B)   statistical estimates of the value of goods and services to consumers.
C)   prices based on the assumption that producers make no profits.
D)   the maximum amount consumers would be willing to pay.E) C) and D)
F) A) and D)

Question 4

The information below for 2008 in millions was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest? Country
GDP (Constant US$) 
GDP(Current US$) 
Population
Argentina
$394,595
$328,465
39) 88
Bolivia
$11,373
$16,674
9) 69
Peru
$84,241
$129,109
28) 84

Accepted Answer

A)   Argentina,Bolivia,Peru
B)   Argentina,Peru,Bolivia
C)   Bolivia,Argentina,Peru
D)   Peru,Bolivia,ArgentinaE) B) and C)
F) None of the above

Question 5

Table 10-6
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009.
Prices and Quantities
 
-Refer to Table 10-6.In 2010,this country's real GDP was

Accepted Answer

A)   $540.
B)   $700.
C)   $810.
D)   $1050.E) C) and D)
F) B) and C)

Question 6

Table 10-4
The table below reports nominal and real GDP for the U.S.from 1929 to 1932.
 
-Refer to Table 10-3.What is the GDP deflator and the inflation rate for 1931?

Accepted Answer

A)   9.16,-11.5
B)   9.16,-10.3
C)   1091.37,10.3
D)   1091.37,11.5E) A) and B)
F) A) and C)

Question 7

Retained earnings is income that

Accepted Answer

A)   households retain after paying taxes.
B)   businesses retain after paying taxes.
C)   corporations have earned but have not used to invest in plant,equipment,and inventories.
D)   corporations have earned but have not paid out to their owners.E) A) and B)
F) A) and D)

Question 8

Ralph pays someone to mow his lawn,while Mike mows his own lawn.Regarding these two practices,which of the following statements is correct?

Accepted Answer

A)   Only Ralph's payments are included in GDP.
B)   Ralph's payments as well as the estimated value of Mike's mowing services are included in GDP.
C)   Neither Ralph's payments nor the estimated value of Mike's mowing services is included in GDP.
D)   Ralph's payments are included in GDP,while the estimated value of Mike's mowing services is included in GDP only if Mike voluntarily provides his estimate of that value to the government.E) All of the above
F) C) and D)

Question 9

In the economy of Ukzten in 2010,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Ukzten's net exports in 2010?

Accepted Answer

A)   -$250
B)   $250
C)   $2200
D)   Net exports cannot be calculated from the information given.E) A) and B)
F) All of the above

Question 10

Table 10-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 10-1.Gross national product for Bahkan in 2010 is

Accepted Answer

A)   $95.
B)   $100.
C)   $110.
D)   $115.E) B) and C)
F) A) and B)

Question 11

If Brazil buys $100 million of tractors from the U.S. ,then U.S.net exports will decrease.

Accepted Answer

A) True 
 B)False

Question 12

Table 10-7
The table below contains data for the country of Togogo.The base year is 1974.
 
-Refer to Table 10-7.Which of the following is not correct?

Accepted Answer

A)   This economy experienced growth from 1974 to 1975.
B)   This economy experienced growth from 1975 to 1976.
C)   This economy experienced growth from 1976 to 1977.
D)   This economy experienced inflation from 1974 to 1975,from 1975 to 1976,and from 1976 to 1977.E) A) and B)
F) None of the above

Question 13

Bountiful Harvest Bakery buys $4.00 of flour from Grinkers' Mill and uses the flour to make bread sold to the public for $12.00.Taking these two transactions into account,what is the effect on GDP?

Accepted Answer

A)   GDP increases by $4.00
B)   GDP increases by $8.00
C)   GDP increases by $12.00
D)   GDP increases by $16.00E) A) and D)
F) A) and C)

Question 14

The term economists use to describe a situation in which the economy's overall price level is rising is

Accepted Answer

A)   growth.
B)   inflation.
C)   recession.
D)   expansion.E) B) and C)
F) None of the above

Question 15

If total spending rises from one year to the next,then which of the following could not be true?

Accepted Answer

A)   the economy is producing a smaller output of goods and services,and goods and services are selling at higher prices
B)   the economy is producing a larger output of goods and services,and goods and services are selling at lower prices
C)   the economy is producing a larger output of goods and services,and goods and services are selling at higher prices
D)   the economy is producing a smaller output of goods and services,and goods and services are selling at lower pricesE) All of the above
F) None of the above

Question 16

The income that households and noncorporate businesses receive is called

Accepted Answer

A)   personal income.
B)   net national product.
C)   disposable personal income.
D)   national income.E) B) and C)
F) None of the above

Question 17

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

Question 18

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

Accepted Answer

A)   Elaine pays her college tuition bill.
B)   John's law firm buys him a new computer.
C)   Laura buys a bond that McDoanald's sells to raise funds.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 19

When a U.S.citizen buys $500 of Chinese-made parts for a motorcycle,

Accepted Answer

A)   U.S.consumption falls by $500,U.S.net exports decline by $500,and U.S.GDP declines by $1000.
B)   U.S.consumption does not change,U.S.net exports decline by $500,and U.S.GDP declines by $500.
C)   U.S.consumption increases by $500,U.S.net exports remain the same,and U.S.GDP increases by $500.
D)   U.S.consumption increases by $500,U.S.net exports decline by $500,and U.S.GDP remains the same.E) A) and B)
F) A) and C)

Question 20

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

Exam 23: Measuring a Nations Income

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro.In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro.What was its inflation rate in 2011? Show your work.

Correct Answer
verified
The GDP deflator for 2010 was ...
View Answer

Gross domestic product includes all

Correct Answer
verified

In the economy of Ukzten in 2010,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Ukzten's net exports in 2010?

Correct Answer
verified

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.In 2010,this country's real GDP was

Correct Answer
verified

If total spending rises from one year to the next,then which of the following could not be true?

Correct Answer
verified

If Brazil buys $100 million of tractors from the U.S. ,then U.S.net exports will decrease.

Correct Answer
verified

Table 10-7 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 10-7.Which of the following is not correct?

Correct Answer
verified

The term economists use to describe a situation in which the economy's overall price level is rising is

Correct Answer
verified

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

Correct Answer
verified

The income that households and noncorporate businesses receive is called

Correct Answer
verified

Bountiful Harvest Bakery buys $4.00 of flour from Grinkers' Mill and uses the flour to make bread sold to the public for $12.00.Taking these two transactions into account,what is the effect on GDP?

Correct Answer
verified

Table 10-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 10-3.What is the GDP deflator and the inflation rate for 1931?

Correct Answer
verified

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

Correct Answer
verified

When a U.S.citizen buys $500 of Chinese-made parts for a motorcycle,

Correct Answer
verified

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

Correct Answer
verified

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Correct Answer
verified

Correct Answer
verified

Retained earnings is income that

Correct Answer
verified

Table 10-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 10-1.Gross national product for Bahkan in 2010 is

Correct Answer
verified

Ralph pays someone to mow his lawn,while Mike mows his own lawn.Regarding these two practices,which of the following statements is correct?

Correct Answer
verified

Exam 23: Measuring a Nations Income

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro.In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro.What was its inflation rate in 2011? Show your work.

Correct AnswerverifiedThe GDP deflator for 2010 was ...View AnswerShow Answer

Gross domestic product includes all

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Ukzten's net exports in 2010?

Correct AnswerverifiedShow Answer

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.In 2010,this country's real GDP was

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next,then which of the following could not be true?

Correct AnswerverifiedShow Answer

If Brazil buys $100 million of tractors from the U.S. ,then U.S.net exports will decrease.

Correct AnswerverifiedShow Answer

Table 10-7 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 10-7.Which of the following is not correct?

Correct AnswerverifiedShow Answer

The term economists use to describe a situation in which the economy's overall price level is rising is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The income that households and noncorporate businesses receive is called

Correct AnswerverifiedShow Answer

Bountiful Harvest Bakery buys $4.00 of flour from Grinkers' Mill and uses the flour to make bread sold to the public for $12.00.Taking these two transactions into account,what is the effect on GDP?

Correct AnswerverifiedShow Answer

Table 10-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 10-3.What is the GDP deflator and the inflation rate for 1931?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a U.S.citizen buys $500 of Chinese-made parts for a motorcycle,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Retained earnings is income that

Correct AnswerverifiedShow Answer

Table 10-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 10-1.Gross national product for Bahkan in 2010 is

Correct AnswerverifiedShow Answer

Ralph pays someone to mow his lawn,while Mike mows his own lawn.Regarding these two practices,which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified
The GDP deflator for 2010 was ...
View Answer

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