Question 1

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 .
Prices and Quantities 
-Refer to Table 23-6. In 2013, this country's GDP deflator was

Accepted Answer

A)  1.0.
B)  100.0.
C)  171.4.
D)  240.0.E) A) and B)
F) A) and C)

Question 2

Figure 23-2. 
-Refer to Figure 23-2. Identify the location of firms and households.

Accepted Answer

W is firms...

Question 3

An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Accepted Answer

A)  $300,000
B)  $500,000
C)  $600,000
D)  $700,000E) B) and D)
F) None of the above

Question 4

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 .
Prices and Quantities 
-Refer to Table 23-6. In 2010, this country's nominal GDP was

Accepted Answer

A)  $260.
B)  $440.
C)  $620.
D)  $760.E) B) and D)
F) None of the above

Question 5

Net exports equal

Accepted Answer

A)  exports plus imports.
B)  exports minus imports.
C)  imports minus exports.
D)  GDP minus imports.E) B) and D)
F) A) and C)

Question 6

Because every transaction has a buyer and a seller,

Accepted Answer

A)  GDP is more closely associated with an economy's income than it is with an economy's expenditure.
B)  every transaction contributes equally to an economy's income and to its expenditure.
C)  the number of firms must be equal to the number of households in a simple circular-flow diagram.
D)  firms' profits are necessarily zero in a simple circular-flow diagram.E) A) and D)
F) A) and C)

Question 7

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

Question 8

If the U.S. government reports that GDP in the third quarter was $16 trillion at an annual rate, then the amount of income and expenditure during quarter three was $4 trillion.

Accepted Answer

A) True 
 B)False

Question 9

Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

Accepted Answer

A)  $21,000
B)  $28,000
C)  $7,000
D)  $14,000E) A) and C)
F) A) and B)

Question 10

Unlike national income, personal income

Accepted Answer

A)  includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government.
B)  excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government.
C)  excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government.
D)  includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government.E) A) and C)
F) A) and B)

Question 11

A manufacturer produces 1 million televisions in the first quarter of the year. It sells 900,000 of them before the end of the first quarter, and holds the others in its warehouse. How will the 100,000 unsold televisions be treated in the GDP statistics?

Accepted Answer

A)  Since the televisions eventually will be bought by consumers, they will be included as consumption in the first quarter.
B)  Since the televisions were not purchased in the first quarter, they will be counted as an increase in second-quarter GDP.
C)  The televisions will be counted as a change in inventory in the first quarter and so will be included in first-quarter GDP.
D)  The televisions will be counted as a change in inventory in the first quarter, and when sold in the second quarter will raise second-quarter GDP.E) None of the above
F) All of the above

Question 12

Which of the following transactions is not included in GDP?

Accepted Answer

A)  oranges sold to households by a grocer.
B)  orange juice sold by a restaurant to its diners.
C)  oranges sold by a farmer to a grocery store.
D)  All of the above are included in GDP.E) A) and D)
F) A) and C)

Question 13

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 .
Prices and Quantities 
-Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was

Accepted Answer

A)  1.38%.
B)  38.20%.
C)  138.20%.
D)  41.90.E) A) and B)
F) A) and C)

Question 14

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Accepted Answer

A) True 
 B)False

Question 15

What are transfer payments, and how do they affect the calculation of GDP?

Accepted Answer

Transfer payments are income b...

Question 16

In 2014, a farmer grows and sells $3 million worth of corn to Big Flakes Cereal Company. Big Flakes Cereal Company produces $8 million worth of cereal in 2014, with sales to households during the year of $7 million. The unsold $1 million worth of cereal remains in Big Flake Cereal Company's inventory at the end of 2014. The transactions just described contribute how much to GDP for 2014?

Accepted Answer

A)  $3 million
B)  $7 million
C)  $8 million
D)  $11 millionE) A) and B)
F) A) and C)

Question 17

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Accepted Answer

A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected.
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000.
C)  U.S. government purchases, net exports, and GDP are unaffected.
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.E) A) and C)
F) B) and D)

Question 18

In the GDP accounts production equals

Accepted Answer

A)  income.
B)  income + saving.
C)  income - government expenditures.
D)  income - imports.E) None of the above
F) B) and C)

Question 19

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 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) C) and D)

Question 20

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

Exam 23: Measuring a Nation S Income

Because every transaction has a buyer and a seller,

Correct Answer
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Correct Answer
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Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

Correct Answer
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Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was

Correct Answer
verified

Unlike national income, personal income

Correct Answer
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A manufacturer produces 1 million televisions in the first quarter of the year. It sells 900,000 of them before the end of the first quarter, and holds the others in its warehouse. How will the 100,000 unsold televisions be treated in the GDP statistics?

Correct Answer
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A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,

Correct Answer
verified

What are transfer payments, and how do they affect the calculation of GDP?

Correct Answer
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Transfer payments are income b...
View Answer

In the GDP accounts production equals

Correct Answer
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The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Correct Answer
verified

Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Correct Answer
verified
W is firms...
View Answer

Which of the following statements about GDP is correct?

Correct Answer
verified

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. In 2010, this country's nominal GDP was

Correct Answer
verified

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

Correct Answer
verified

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Correct Answer
verified

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. In 2013, this country's GDP deflator was

Correct Answer
verified

Which of the following transactions is not included in GDP?

Correct Answer
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Net exports equal

Correct Answer
verified

An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Correct Answer
verified

If the U.S. government reports that GDP in the third quarter was $16 trillion at an annual rate, then the amount of income and expenditure during quarter three was $4 trillion.

Correct Answer
verified

Exam 23: Measuring a Nation S Income

Because every transaction has a buyer and a seller,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

Correct AnswerverifiedShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was

Correct AnswerverifiedShow Answer

Unlike national income, personal income

Correct AnswerverifiedShow Answer

A manufacturer produces 1 million televisions in the first quarter of the year. It sells 900,000 of them before the end of the first quarter, and holds the others in its warehouse. How will the 100,000 unsold televisions be treated in the GDP statistics?

Correct AnswerverifiedShow Answer

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

What are transfer payments, and how do they affect the calculation of GDP?

Correct AnswerverifiedTransfer payments are income b...View AnswerShow Answer

In the GDP accounts production equals

Correct AnswerverifiedShow Answer

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Correct AnswerverifiedShow Answer

Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Correct AnswerverifiedW is firms...View AnswerShow Answer

Which of the following statements about GDP is correct?

Correct AnswerverifiedShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. In 2010, this country's nominal GDP was

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Correct AnswerverifiedShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. In 2013, this country's GDP deflator was

Correct AnswerverifiedShow Answer

Which of the following transactions is not included in GDP?

Correct AnswerverifiedShow Answer

Net exports equal

Correct AnswerverifiedShow Answer

An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?

Correct AnswerverifiedShow Answer

If the U.S. government reports that GDP in the third quarter was $16 trillion at an annual rate, then the amount of income and expenditure during quarter three was $4 trillion.

Correct AnswerverifiedShow Answer

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Transfer payments are income b...
View Answer

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W is firms...
View Answer

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