Question 1

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 McDonald's sells to raise funds.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 2

Gasoline is considered a final good if it is sold by a

Accepted Answer

A)   gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles.
B)   pipeline operator to a gasoline station in San Francisco.
C)   gasoline station to a motorist in Los Angeles.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 3

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

Question 4

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 5

What are exports, and how are they different from imports?

Accepted Answer

Exports are domestically produ...

Question 6

In 2012, GDP per person in the United States was almost

Accepted Answer

A)   $14,000.
B)   $36,000.
C)   $46,000
D)   $50,000E) A) and B)
F) A) and C)

Question 7

Disposable income is

Accepted Answer

A)   the total income earned by a nation's permanent residents.
B)   the total income earned by a nation's residents in the production of goods and services.
C)   the income that households and non-corporate businesses receive.
D)   the income that households and businesses have remaining after satisfying their obligations to the government.E) A) and B)
F) A) and C)

Question 8

Which of the following statements about GDP is correct?

Accepted Answer

A)   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
B)   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
C)   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
D)   Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices.E) C) and D)
F) None of the above

Question 9

Recently, the U.S. national income accounts have switched to calling government purchases

Accepted Answer

A)   government spending and transfer payments.
B)   transfer payments and gross investment by government.
C)   government consumption expenditure and gross investment.
D)   government wages, salaries, and investment expenditure.E) A) and B)
F) A) and C)

Question 10

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 11

Which of the following is not included in GDP?

Accepted Answer

A)   a can of bug spray
B)   the services of an exterminator
C)   the honey produced and sold by a beekeeper
D)   All of the above are included in GDP.E) None of the above
F) A) and C)

Question 12

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 2017, this country's

Accepted Answer

A)   real GDP was $900, and the GDP deflator was 138.9.
B)   real GDP was $1250, and the GDP deflator was 128.0.
C)   real GDP was $900, and the GDP deflator was 128.0.
D)   real GDP was $1250, and the GDP deflator was 138.9.E) All of the above
F) B) and D)

Question 13

When an Egyptian firm purchases a cement mixer from Slovakia,

Accepted Answer

A)   Egyptian investment does not change, Egyptian net exports decrease, Egyptian GDP decreases, Slovakian net exports increase, and Slovakian GDP increases.
B)   Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases.
C)   Egyptian investment decreases, Egyptian net exports increase, Egyptian GDP is unaffected, Slovakian net exports decrease, and Slovakian GDP decreases.
D)   Egyptian investment increases, Egyptian net exports do not change, Egyptian GDP increases, Slovakian net exports do not change, and Slovakian GDP is unaffected.E) A) and D)
F) B) and D)

Question 14

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. In which year was this country's nominal GDP highest?

Accepted Answer

A)   2014
B)   2015
C)   2016
D)   2017E) All of the above
F) A) and C)

Question 15

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

Question 16

If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number.

Accepted Answer

A) True 
 B)False

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

Question 18

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

Question 19

Which of the following is included in government purchases?

Accepted Answer

A)   unemployment benefits a state pays
B)   Social Security payments the U.S. government makes
C)   the services of a U.S. government attorney valued at the cost of her salary
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 20

Changes in nominal GDP reflect

Accepted Answer

A)   only changes in prices.
B)   only changes in the amounts being produced.
C)   both changes in prices and changes in the amounts being produced.
D)   neither changes in prices nor changes in the amounts being produced.E) None of the above
F) All of the above

Exam 10: Measuring a Nations Income

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

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Which of the following is not included in GDP?

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In 2012, GDP per person in the United States was almost

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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?

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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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Which of the following statements about GDP is correct?

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Changes in nominal GDP reflect

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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 2017, this country's

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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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Gasoline is considered a final good if it is sold by a

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Which of the following is included in government purchases?

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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?

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Disposable income is

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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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An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

Recently, the U.S. national income accounts have switched to calling government purchases

Correct AnswerverifiedShow Answer

When an Egyptian firm purchases a cement mixer from Slovakia,

Correct AnswerverifiedShow Answer

What are exports, and how are they different from imports?

Correct AnswerverifiedExports are domestically produ...View AnswerShow 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. In which year was this country's nominal GDP highest?

Correct AnswerverifiedShow Answer

If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number.

Correct AnswerverifiedShow Answer

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Exports are domestically produ...
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