Question 1

Which of the following is included in the consumption component of GDP?

Accepted Answer

A)   household purchases of appliances.
B)   household purchases of medical care.
C)   household purchases of food.
D)   All of the above are included in the consumption component of GDP.E) None of the above
F) A) and C)

Question 2

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)   the quality of these items is not high enough to contribute value to GDP.
B)   measuring them is so difficult.
C)   the government wants to discourage the production and consumption of these items.
D)   these items are not reported on income tax forms.E) A) and D)
F) A) and C)

Question 3

In the United States in 2009,purchases of capital equipment,inventories,and structures represented approximately

Accepted Answer

A)   3 percent of GDP.
B)   7 percent of GDP.
C)   11 percent of GDP.
D)   15 percent of GDP.E) All of the above
F) A) and B)

Question 4

Table 15-6
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009.
Prices and Quantities
 
-Refer to Table 15-6.From 2010 to 2011,this country's output grew

Accepted Answer

A)   12.5%.
B)   14.3%.
C)   48.1%.
D)   155.6%.E) A) and B)
F) A) and C)

Question 5

The purchase of rice produced this period is included in GDP if the rice is

Accepted Answer

A)   used in a meal a restaurant sells during the same period they buy the rice.
B)   purchased by a family who uses it to make tuna casserole for its supper.
C)   purchased by a frozen food company to increase its inventory.
D)   B and C are correct.E) None of the above
F) All of the above

Question 6

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 7

When an American doctor opens a practice in Bermuda,his production there is part of U.S.GNP.

Accepted Answer

A) True 
 B)False

Question 8

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s) does(do) these transactions raise investment?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) A) and B)
F) None of the above

Question 9

Table 15-5
A hypothetical country of Lahland produces only movies and popcorn.Quantities and prices of these goods for the last several years are shown below.The base year is 2009.
Prices and Quantities
 
-Refer to Table 15-5 What was this country's nominal GDP in 2009?

Accepted Answer

A)   $7,600
B)   $9,100
C)   $9,500
D)   $10,500E) A) and D)
F) None of the above

Question 10

If a good produced this quarter goes into inventory,then it is included in this period's GDP.If it is sold in the next quarter,it will have no effect on GDP.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following values would be included in U.S.GDP for 2009?

Accepted Answer

A)   the rent that Sean,an American citizen,would have paid on his home in New York in 2009 had he not owned that home
B)   the rent that John,an American citizen,paid on his apartment in San Francisco in 2009
C)   the value of the legal services provided by Juan,an attorney and a Mexican citizen,who lived in Houston and practiced law there in 2009
D)   All of the above would be included in U.S.GDP for 2009.E) B) and C)
F) A) and C)

Question 12

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) .Based on this scenario,which of the following statements is correct?

Accepted Answer

A)   GDP would definitely increase,despite the fact that GDP includes leisure.
B)   GDP would definitely increase because GDP excludes leisure.
C)   GDP could either increase or decrease because GDP includes leisure.
D)   GDP could either increase or decrease because GDP excludes leisure.E) A) and C)
F) None of the above

Question 13

GDP does not reflect

Accepted Answer

A)   the value of leisure.
B)   the value of goods and services produced at home.
C)   the quality of the environment.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 14

Martin,a U.S.citizen,travels to Mexico and buys a newly manufactured motorcycle made there.His purchase is included in

Accepted Answer

A)   both Mexican GDP and U.S.GDP.
B)   Mexican GDP,but it is not included in U.S.GDP.
C)   U.S.GDP,but it is not included in Mexican GDP.
D)   neither Mexican GDP nor U.S.GDP.E) A) and B)
F) A) and D)

Question 15

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

Accepted Answer

A)   the unemployment rate
B)   the inflation rate
C)   gross domestic product
D)   the trade deficitE) C) and D)
F) B) and C)

Question 17

Rocket Energy Drink Company buys sugar to produce energy drinks.At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased.Investment for the quarter will include

Accepted Answer

A)   both the increased inventory of sugar and the increased inventory of energy drinks.
B)   the increased inventory of sugar,but not the increased inventory of energy drinks.
C)   the increased inventory of energy drinks,but not the increased inventory of sugar.
D)   neither the increased inventory of sugar nor the increased inventory of energy drinks.E) B) and C)
F) All of the above

Question 18

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following correctly orders U.S.income measures from largest to smallest?

Accepted Answer

A)   disposable personal income,gross national product,national income,net national product,personal income
B)   personal income,net national product,national income,gross national product,disposable personal income
C)   gross national product,net national product,national income,personal income,disposable personal income
D)   disposable personal income,personal income,national income,net national product,gross national productE) All of the above
F) A) and B)

Question 20

Additions to inventory subtract from GDP,and when the goods in inventory are sold,the reductions in inventory add to GDP.

Accepted Answer

A) True 
 B)False

Exam 15: Measuring a Nations Income

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

Correct AnswerverifiedShow Answer

If a good produced this quarter goes into inventory,then it is included in this period's GDP.If it is sold in the next quarter,it will have no effect on GDP.

Correct AnswerverifiedShow Answer

Which of the following values would be included in U.S.GDP for 2009?

Correct AnswerverifiedShow Answer

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Correct AnswerverifiedShow Answer

Which of the following is included in the consumption component of GDP?

Correct AnswerverifiedShow Answer

Table 15-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 15-6.From 2010 to 2011,this country's output grew

Correct AnswerverifiedShow Answer

Which of the following correctly orders U.S.income measures from largest to smallest?

Correct AnswerverifiedShow Answer

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Correct AnswerverifiedShow Answer

When an American doctor opens a practice in Bermuda,his production there is part of U.S.GNP.

Correct AnswerverifiedShow Answer

Table 15-5 A hypothetical country of Lahland produces only movies and popcorn.Quantities and prices of these goods for the last several years are shown below.The base year is 2009. Prices and Quantities -Refer to Table 15-5 What was this country's nominal GDP in 2009?

Correct AnswerverifiedShow Answer

Rocket Energy Drink Company buys sugar to produce energy drinks.At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased.Investment for the quarter will include

Correct AnswerverifiedShow Answer

The purchase of rice produced this period is included in GDP if the rice is

Correct AnswerverifiedShow Answer

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

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Correct AnswerverifiedShow Answer

In the United States in 2009,purchases of capital equipment,inventories,and structures represented approximately

Correct AnswerverifiedShow Answer

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s) does(do) these transactions raise investment?

Correct AnswerverifiedShow Answer

GDP does not reflect

Correct AnswerverifiedShow Answer

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) .Based on this scenario,which of the following statements is correct?

Correct AnswerverifiedShow Answer

Additions to inventory subtract from GDP,and when the goods in inventory are sold,the reductions in inventory add to GDP.

Correct AnswerverifiedShow Answer

Martin,a U.S.citizen,travels to Mexico and buys a newly manufactured motorcycle made there.His purchase is included in

Correct AnswerverifiedShow Answer

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