Question 1

New home construction is included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 2

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Accepted Answer

The answer of Last quarter Newton computers produced 3,000 computers....

Question 3

Changes in the GDP deflator 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) A) and B)
F) None of the above

Question 4

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Accepted Answer

A) True 
 B)False

Question 5

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Explain how GNP differs from GDP.

Accepted Answer

GNP includes income from a nat...

Question 8

Nominal GDP uses constant base-year prices to place a value on the economy's production of goods and services, while real GDP uses current prices to place a value on the economy's production of goods and services.

Accepted Answer

A) True 
 B)False

Question 9

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Accepted Answer

A) True 
 B)False

Question 10

If an economy's GDP rises, then it must be the case that the economy's

Accepted Answer

A)  income and saving rise.
B)  income falls and the market value of all production rises.
C)  income rises and the market value of all production falls.
D)  income and the market value of all production both rise.E) C) and D)
F) A) and D)

Question 11

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Accepted Answer

A) True 
 B)False

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

Question 13

​When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current GDP.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

The basic tools of supply and demand are

Accepted Answer

A)  useful only in the analysis of economic behavior in individual markets.
B)  useful in analyzing the overall economy, but not in analyzing individual markets.
C)  central to microeconomic analysis, but seldom used in macroeconomic analysis.
D)  central to macroeconomic analysis as well as to microeconomic analysis.E) A) and C)
F) A) and B)

Question 16

Macroeconomic statistics tell us about a particular household, firm, or market.

Accepted Answer

A) True 
 B)False

Question 17

Table 23-6
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities
 
-Refer to Table 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2008?

Accepted Answer

Nominal GDP was $4x100 + $50X1...

Question 18

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 19

GDP is defined as the

Accepted Answer

A)  value of all goods and services produced within a country in a given period of time.
B)  value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
C)  value of all final goods and services produced within a country in a given period of time.
D)  value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.E) B) and D)
F) C) and D)

Question 20

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods ...

Exam 23: Measuring a Nations Income

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Correct AnswerverifiedShow Answer

Most goods and services produced at home

Correct AnswerverifiedShow 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

New home construction is included in the consumption component of GDP.

Correct AnswerverifiedShow Answer

The basic tools of supply and demand are

Correct AnswerverifiedShow Answer

Table 23-6 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2008?

Correct AnswerverifiedNominal GDP was $4x100 + $50X1...View AnswerShow Answer

Nominal GDP uses constant base-year prices to place a value on the economy's production of goods and services, while real GDP uses current prices to place a value on the economy's production of goods and services.

Correct AnswerverifiedShow Answer

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Correct AnswerverifiedShow Answer

Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined.

Correct AnswerverifiedSales of used goods ...View AnswerShow Answer

If an economy's GDP rises, then it must be the case that the economy's

Correct AnswerverifiedShow Answer

Macroeconomic statistics tell us about a particular household, firm, or market.

Correct AnswerverifiedShow Answer

The income that households and noncorporate businesses receive is called

Correct AnswerverifiedShow Answer

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Correct AnswerverifiedShow Answer

Explain how GNP differs from GDP.

Correct AnswerverifiedGNP includes income from a nat...View AnswerShow Answer

GDP is defined as the

Correct AnswerverifiedShow Answer

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Correct AnswerverifiedShow Answer

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Correct AnswerverifiedShow Answer

​When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current GDP.

Correct AnswerverifiedShow Answer

Changes in the GDP deflator reflect

Correct AnswerverifiedShow Answer

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Correct AnswerverifiedShow Answer

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The purchase of foreign equipment is cou...
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Nominal GDP was $4x100 + $50X1...
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Sales of used goods ...
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GNP includes income from a nat...
View Answer

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Correct Answer
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When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current GDP.

Correct Answer
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Correct Answer
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Correct Answer
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