Question 1

Darin grows and sells marijuana to Jennifer. Thomas is an organic farmer who sells broccoli to Jennifer. Marijuana is an illegal good and broccoli is a legal good. Assume that if Jennifer marries either, they give her what they used to sell her. Which of the following statements is consistent with the way GDP is computed?

Accepted Answer

A)  GDP will fall if Jennifer marries either Darin or Thomas.
B)  GDP will fall if Jennifer marries Darin but not if she marries Thomas.
C)  GDP will fall if Jennifer marries Thomas but not if she marries Darin.
D)  GDP remains the same whether Jennifer marries Darin or Thomas.E) None of the above
F) B) and C) C

Question 2

Which of the following domestically produced items is not included in GDP?

Accepted Answer

A)  a bottle of shampoo
B)  a hairdryer
C)  a haircut
D)  All of the above are included in GDP.E) B) and C)
F) A) and D)

Question 3

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Accepted Answer

A)  U.S. exports and U.S imports increase.
B)  U.S. exports but not U.S. imports increase.
C)  U.S. imports but not U.S. exports increase.
D)  neither U.S. exports nor U.S. imports increase.E) A) and B)
F) A) and C) C

Question 4

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Accepted Answer

A)  $11 million
B)  $10 million
C)  $7 million
D)  $9 millionE) All of the above
F) A) and B)

Question 5

When economists refer to intangible items, they are referring to such things as

Accepted Answer

A)  illegal goods, and the value of such items is included in GDP.
B)  illegal goods, and the value of such items is excluded from GDP.
C)  hair styling and dental care, and the value of such items is included in GDP.
D)  hair styling and dental care, and the value of such items is excluded from GDP.E) B) and D)
F) A) and D)

Question 6

Which of the following examples of household spending is categorized as investment rather than consumption?

Accepted Answer

A)  expenditures on durable goods such as automobiles and refrigerators
B)  expenditures on intangibles items such as medical care
C)  expenditures on new housing
D)  All of the above are correct.E) A) and D)
F) A) and C) C

Question 7

Explain how real GDP differs from nominal GDP.

Accepted Answer

Real GDP reflects on...

Question 8

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

Question 9

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 was the growth rate of real GDP for 1931?

Accepted Answer

A)  -6.93%. Real GDP is a better gauge of economic well-being than nominal GDP.
B)  -6.93%. Nominal GDP is a better gauge of economic well-being than real GDP.
C)  -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.
D)  -6.49%. Nominal GDP is a better gauge of economic well-being than real GDP.E) None of the above
F) A) and B)

Question 10

GDP includes the value of all

Accepted Answer

A)  final goods and services produced within a country using primarily market prices to measure the value of goods and services.
B)  final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.
C)  goods and services produced within a country using primarily market prices to measure the value of goods and services.
D)  goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.E) A) and D)
F) None of the above

Question 11

Table 23-11
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 2012.

Accepted Answer

Nominal GD...

Question 12

Most goods and services produced at home

Accepted Answer

A)  and most goods and services produced illegally are included in GDP.
B)  are included in GDP while most goods and services produced illegally are excluded from GDP.
C)  are excluded from GDP while most goods and services produced illegally are included in GDP
D)  and most goods and services produced illegally are excluded from GDP.E) B) and C)
F) A) and D)

Question 13

An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarter(s)  does(do)  the value of the shoes add to U.S. GDP?

Accepted Answer

A)  the second and third quarters
B)  the second quarter but not the third quarter
C)  the third but not the second quarter
D)  neither the second nor the third quarterE) B) and D)
F) B) and C)

Question 14

An identity is an equation that

Accepted Answer

A)  describes an equilibrium.
B)  pertains to macroeconomics, not to microeconomics.
C)  must be true because of how the variables in the equation are defined.
D)  involves final goods, not intermediate goods.E) B) and C)
F) C) and D)

Question 15

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

Accepted Answer

A)  -$75
B)  -$225
C)  $225
D)  $75E) All of the above
F) B) and C)

Question 16

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1...

Question 17

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Accepted Answer

The purchase of foreign equipment is cou...

Question 18

Which of the following statements regarding GDP is correct?

Accepted Answer

A)  GDP includes factory production, but not any harm that may be inflicted on the environment.
B)  GDP accounts for all activities taking place outside markets.
C)  GDP provides detailed information about the distribution of income.
D)  GDP is a good measure of economic well-being for all purposes.E) C) and D)
F) A) and B)

Question 19

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

Question 20

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $1350
B)  $1450
C)  $1050
D)  $1750E) A) and B)
F) None of the above

Exam 23: Measuring a Nation S Income

Correct Answer
verified
C

Which of the following domestically produced items is not included in GDP?

Correct Answer
verified

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct Answer
verified
C

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Correct Answer
verified

When economists refer to intangible items, they are referring to such things as

Correct Answer
verified

Which of the following examples of household spending is categorized as investment rather than consumption?

Correct Answer
verified
C

Explain how real GDP differs from nominal GDP.

Correct Answer
verified
Real GDP reflects on...
View 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 Answer
verified

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 was the growth rate of real GDP for 1931?

Correct Answer
verified

GDP includes the value of all

Correct Answer
verified

Table 23-11 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 2012.

Correct Answer
verified
Nominal GD...
View Answer

Most goods and services produced at home

Correct Answer
verified

An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarter(s) does(do) the value of the shoes add to U.S. GDP?

Correct Answer
verified

An identity is an equation that

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

Correct Answer
verified

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Correct Answer
verified
The GDP Deflator = 1...
View Answer

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Correct Answer
verified
The purchase of foreign equipment is cou...
View Answer

Which of the following statements regarding GDP is correct?

Correct Answer
verified

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 Answer
verified

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Correct Answer
verified

Exam 23: Measuring a Nation S Income

Correct AnswerverifiedC

Which of the following domestically produced items is not included in GDP?

Correct AnswerverifiedShow Answer

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct AnswerverifiedC

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Correct AnswerverifiedShow Answer

When economists refer to intangible items, they are referring to such things as

Correct AnswerverifiedShow Answer

Which of the following examples of household spending is categorized as investment rather than consumption?

Correct AnswerverifiedC

Explain how real GDP differs from nominal GDP.

Correct AnswerverifiedReal GDP reflects on...View AnswerShow 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

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 was the growth rate of real GDP for 1931?

Correct AnswerverifiedShow Answer

GDP includes the value of all

Correct AnswerverifiedShow Answer

Table 23-11 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 2012.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

Most goods and services produced at home

Correct AnswerverifiedShow Answer

An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarter(s) does(do) the value of the shoes add to U.S. GDP?

Correct AnswerverifiedShow Answer

An identity is an equation that

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

Correct AnswerverifiedShow Answer

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Correct AnswerverifiedThe GDP Deflator = 1...View AnswerShow Answer

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Correct AnswerverifiedThe purchase of foreign equipment is cou...View AnswerShow Answer

Which of the following statements regarding GDP is correct?

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

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

Correct Answer
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C

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C

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C

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Real GDP reflects on...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Nominal GD...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The GDP Deflator = 1...
View Answer

Correct Answer
verified
The purchase of foreign equipment is cou...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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