Question 1

Which of the following statements is correct?

Accepted Answer

A)   The value of intermediate goods is always included in GDP.
B)   The value of intermediate goods is included in GDP only if those goods were produced in the previous year.
C)   The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date.
D)   The value of intermediate goods is never included in GDP.E) A) and B)
F) C) and D)

Question 2

Which of the following items is included in GDP?

Accepted Answer

A)   the sale of stocks and bonds
B)   the sale of used goods
C)   the sale of services such as those performed by a doctor
D)   All of the above are included in GDP.E) A) and D)
F) All of the above

Question 3

GDP is not a perfect measure of well-being;for example,

Accepted Answer

A)   GDP incorporates a large number of non-market goods and services that are of little value to society.
B)   GDP places too much emphasis on the value of leisure.
C)   GDP fails to account for the quality of the environment.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 4

Household spending on education is included in

Accepted Answer

A)   consumption,although it might be argued that it would fit better in investment.
B)   investment,although it might be argued that it would fit better in consumption.
C)   government spending,based on the fact that most higher-education students attend publicly-supported colleges and universities.
D)   None of the above is correct;in general,household spending on services is not included in any component of GDP.E) None of the above
F) All of the above

Question 5

Which of the following items is included in U.S.GDP?

Accepted Answer

A)   the estimated value of production accomplished at home,such as backyard production of fruits and vegetables
B)   the value of illegally-produced goods and services
C)   the value of cars and trucks produced in foreign countries and sold in the U.S.
D)   None of the above is included in U.S.GDP.E) A) and B)
F) A) and C)

Question 6

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

Question 7

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Accepted Answer

A)   a positive contribution both to investment and to GDP.
B)   a positive contribution both to consumption and to GDP.
C)   a positive contribution to GDP,but it does not affect investment or consumption.
D)   a positive contribution to investment,but it does not affect GDP.E) B) and C)
F) A) and D)

Question 8

A recession is always associated with

Accepted Answer

A)   the end of a war.
B)   slowly growing real GDP.
C)   rising inflation.
D)   declining real GDP.E) A) and B)
F) All of the above

Question 9

Table 23-6
The table below contains data for the country of Togogo.The base year is 1974.
 
-Refer to Table 23-6.Which of the following is not correct?

Accepted Answer

A)   This economy experienced growth from 1974 to 1975.
B)   This economy experienced growth from 1975 to 1976.
C)   This economy experienced growth from 1976 to 1977.
D)   This economy experienced inflation from 1974 to 1975,from 1975 to 1976,and from 1976 to 1977.E) A) and B)
F) A) and C)

Question 10

Table 23-1
The table below contains data for the country of Wrexington for the year 2006.
 
-Refer to Table 23-1.Personal income for Wrexington in 2006 is

Accepted Answer

A)   $51.
B)   $91.
C)   $93.
D)   $133.E) None of the above
F) A) and B)

Question 11

In the economy of Wrexington in 2008,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Wrexington's GDP in 2008?

Accepted Answer

A)   $1450
B)   $1790
C)   $2455
D)   $2790E) B) and C)
F) A) and D)

Question 12

In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

Accepted Answer

A) True 
 B)False

Question 13

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 14

In the economy of Wrexington in 2008,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Wrexington's GDP in 2008?

Accepted Answer

A)   $6700
B)   $6800
C)   $7000
D)   $7200E) A) and B)
F) A) and C)

Question 15

A good is produced by a firm in 2007,added to the firm's inventory in 2007,and sold to a household in 2008.As a result,on net,

Accepted Answer

A)   2007 GDP increased and 2008 GDP decreased.
B)   2007 GDP decreased and 2008 GDP increased.
C)   2007 GDP did not change and 2008 GDP increased.
D)   2007 GDP increased and 2008 GDP did not change.E) B) and D)
F) A) and B)

Question 16

Which of the following statements about GDP is correct?

Accepted Answer

A)   GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services.
B)   Money continuously flows from households to firms and then back to households,and GDP measures this flow of money.
C)   GDP is generally regarded as the best single measure of a society's economic well-being.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 17

In the economy of Wrexington in 2008,nominal GDP was $28 trillion and real GDP was $32 trillion.What was Wrexington's GDP deflator in 2008?

Accepted Answer

A)   87.5
B)   114.3
C)   400
D)   896E) B) and C)
F) A) and C)

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

U.S.GDP includes estimates of the value of items that are produced and consumed at home,such as housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is included in U.S.GDP?

Accepted Answer

A)   the value of production by an American working in Morocco
B)   the value of production by a Moroccan working in the U.S.
C)   Both (a) and (b) are correct.
D)   Neither (a) nor (b) is correct.E) A) and B)
F) A) and C)

Exam 23: Measuring a Nations Income

Which of the following is included in U.S.GDP?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

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In the economy of Wrexington in 2008,nominal GDP was $28 trillion and real GDP was $32 trillion.What was Wrexington's GDP deflator in 2008?

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Which of the following items is included in GDP?

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A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

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Which of the following is not included in GDP?

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Household spending on education is included in

Correct AnswerverifiedShow 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

Which of the following items is included in U.S.GDP?

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Table 23-6 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 23-6.Which of the following is not correct?

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Which of the following statements about GDP is correct?

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A good is produced by a firm in 2007,added to the firm's inventory in 2007,and sold to a household in 2008.As a result,on net,

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Wrexington's GDP in 2008?

Correct AnswerverifiedShow Answer

GDP is not a perfect measure of well-being;for example,

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Wrexington's GDP in 2008?

Correct AnswerverifiedShow Answer

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

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In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

Correct AnswerverifiedShow Answer

A recession is always associated with

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.Personal income for Wrexington in 2006 is

Correct AnswerverifiedShow Answer

U.S.GDP includes estimates of the value of items that are produced and consumed at home,such as housework and car maintenance.

Correct AnswerverifiedShow Answer

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