Question 1

Which of the following is a final good or service?

Accepted Answer

A)   Coffee grounds you use to make your coffee every morning
B)   Coffee grounds used by a coffee shop to make your coffee every morning
C)   Coffee grounds used by Edy's to make coffee ice cream
D)   None of these is a final good or service.E) B) and C)
F) A) and D)

Question 2

An example of a good or service that would not count in the U.S. GDP would be:

Accepted Answer

A)   a car made by Toyota in Tennessee.
B)   a car made by Ford in Michigan.
C)   sneakers made by Nike in Indonesia.
D)   sneakers made by New Balance in Ohio.E) A) and B)
F) A) and C)

Question 3

GDP counts:

Accepted Answer

A)   only final goods and services, because otherwise certain things would be double-counted and the GDP would be overestimated.
B)   only intermediate goods and services, because those are easier to track.
C)   both intermediate and final goods and services because it is important to capture all values, regardless of which market they take place in.
D)   all values that are reported to the government.E) B) and C)
F) A) and D)

Question 4

An example of an intermediate good would be:

Accepted Answer

A)   the rice used to make Chex cereal.
B)   a bag of Uncle Ben's rice sold to consumers.
C)   a bag of Quaker's rice cakes sold to consumers.
D)   All of these are intermediate goodsE) A) and B)
F) A) and C)

Question 5

Ted moves into his first apartment. He buys a barely used washer/dryer set from Craigslist and hires a company to pick it up and deliver it to his apartment. What about this transaction will be counted in GDP?

Accepted Answer

A)   The value of the washer/dryer set
B)   The value of the delivery service
C)   The value of the washer/dryer set and the delivery service
D)   Nothing about this transaction will count toward GDPE) B) and C)
F) None of the above

Question 6

Apple has been producing the new iPhone throughout 2013, but doesn't plan to sell it until March 2014. How are these iPhones, which are sitting in a warehouse somewhere in the U.S., affecting GDP?

Accepted Answer

A)   They are inventory and will decrease investment in 2013.
B)   They will increase GDP only in the year they are produced, 2013.
C)   They are considered inventory until they sell, so investment will increase when they are sold in 2014.
D)   They are not counted in GDP at all since they were not sold.E) All of the above
F) B) and D)

Question 7

If China's real GDP grew from $7 trillion one year to $8 trillion the next, the annual growth rate would be:

Accepted Answer

A)   14.3 %
B)   87.5 %
C)   114 %
D)   12.5 %E) C) and D)
F) A) and B)

Question 8

The goods and services that count toward GDP are defined in terms of:

Accepted Answer

A)   the location of production, not the citizenship of the producer.
B)   the citizenship of the producer, not the location of production.
C)   citizens producing within a country's borders.
D)   total production of companies owned by citizens, regardless of the actual location of production.E) B) and D)
F) None of the above

Question 9

Which approach to calculating GDP best highlights the relative importance of different factors of production?

Accepted Answer

A)   The expenditure approach
B)   The income approach
C)   The value-added approach
D)   Any of these measurements would work equally well for that comparison.E) A) and B)
F) A) and C)

Question 10

A Chinese restaurant buys 10 cups of rice for $1; soy, fish and oyster sauces for $1 each; and assorted vegetables for $20. They create 10 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP?

Accepted Answer

A)   $23
B)   $50
C)   $73
D)   $27E) B) and D)
F) None of the above

Question 11

A consumption good that would be counted in GDP would be a:

Accepted Answer

A)   new bicycle.
B)   vintagebottle of wine purchased at an auction.
C)   washing machine purchased at a garage sale.
D)   A newly issued stock.E) A) and B)
F) A) and C)

Question 12

Economic growth can:

Accepted Answer

A)   create less jobs compare to a stagnated economy.
B)   increase poverty overall.
C)   improve standards of living.
D)   reduce the price level in the economy.E) All of the above
F) A) and B)

Question 13

One way to estimate GDP is to:

Accepted Answer

A)   measure the total expenditure of an economy.
B)   add up all the money people spend buying final and intermediate goods and services.
C)   add together the market value of only final services sold in the economy.
D)   add together the market value of only final goods sold in the economy and not services.E) None of the above
F) B) and D)

Question 14

If the GDP of Macroland is $250,000,000 and they have a population of 5,000 people, then the GDP per capita is:

Accepted Answer

A)   quite high.
B)   $5,000.
C)   $1,250,000.
D)   $50,000.E) B) and C)
F) A) and D)

Question 15

If Italy's real GDP fell from $2.2 trillion one year to $1.9 trillion the next, the annual growth rate would be:

Accepted Answer

A)   13.6 %
B)   15.8 %
C)   13.6 %.
D)   15.8 %.E) A) and B)
F) C) and D)

Question 16

Tallulah is a German citizen who works for Volkswagen located in Fresno, California. Tallulah's work contributes to:

Accepted Answer

A)   U.S. GDP, but not U.S. GNP.
B)   U.S. GNP, but not U.S. GDP.
C)   German GDP, but not U.S. GDP.
D)   German GDP and U.S. GNP.E) All of the above
F) B) and C)

Question 17

Which of the following activities would be included in GDP?

Accepted Answer

A)   You buy a cake from a local bakery for $30.
B)   You pay a friend $30 to bake a cake.
C)   You bake a cake for yourself.
D)   All of these would be included in GDP.E) A) and B)
F) A) and C)

Question 18

The system we use to measure the value of an economy is called:

Accepted Answer

A)   national income accounting.
B)   national economic valuation.
C)   macroeconomic summation.
D)   national expenditure accounting.E) C) and D)
F) A) and B)

Question 19

The market value of a good or service is the:

Accepted Answer

A)   price at which it is bought and sold.
B)   government's valuation using the CPI.
C)   price at which producers are willing to sell an output.
D)   None of these statements is true.E) None of the above
F) All of the above

Question 20

Mikey likes bagels, so he buys an old pizza shop for $150,000 and spends $10,000 installing new equipment which will allow him to make bagels instead of pizza. How will Mikey's recent purchases affect GDP?

Accepted Answer

A)   Investment will increase $160,000.
B)   Investment will increase $150,000, and consumption will increase $10,000.
C)   Consumption will increase $150,000, and investment will increase $10,000.
D)   Investment will increase $10,000.E) A) and D)
F) A) and C)

Exam 7: Measuring GDP

Mikey likes bagels, so he buys an old pizza shop for $150,000 and spends $10,000 installing new equipment which will allow him to make bagels instead of pizza. How will Mikey's recent purchases affect GDP?

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Which of the following is a final good or service?

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If China's real GDP grew from $7 trillion one year to $8 trillion the next, the annual growth rate would be:

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GDP counts:

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Tallulah is a German citizen who works for Volkswagen located in Fresno, California. Tallulah's work contributes to:

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Ted moves into his first apartment. He buys a barely used washer/dryer set from Craigslist and hires a company to pick it up and deliver it to his apartment. What about this transaction will be counted in GDP?

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The goods and services that count toward GDP are defined in terms of:

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An example of an intermediate good would be:

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If the GDP of Macroland is $250,000,000 and they have a population of 5,000 people, then the GDP per capita is:

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The system we use to measure the value of an economy is called:

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Apple has been producing the new iPhone throughout 2013, but doesn't plan to sell it until March 2014. How are these iPhones, which are sitting in a warehouse somewhere in the U.S., affecting GDP?

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If Italy's real GDP fell from $2.2 trillion one year to $1.9 trillion the next, the annual growth rate would be:

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A consumption good that would be counted in GDP would be a:

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A Chinese restaurant buys 10 cups of rice for $1; soy, fish and oyster sauces for $1 each; and assorted vegetables for $20. They create 10 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP?

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Which of the following activities would be included in GDP?

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The market value of a good or service is the:

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Economic growth can:

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Which approach to calculating GDP best highlights the relative importance of different factors of production?

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One way to estimate GDP is to:

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An example of a good or service that would not count in the U.S. GDP would be:

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