Question 1

Expenditures by households on education are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 2

A U.S.-owned automobile factory 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) C) and D)
F) A) and D)

Question 3

Table 23-2
The table below contains data for country A for the year 2010.
 
-Refer to Table 23-2. What were country A's imports in 2010?

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) C) and D)
F) B) and C)

Question 4

National income is defined as

Accepted Answer

A)   the total income of a nation's permanent residents minus losses from depreciation.
B)   the income that households and noncorporate businesses receive.
C)   the total income earned by a nation's permanent residents in the production of goods and services.
D)   the income that households and noncorporate businesses have left after satisfying all their obligations to the government.E) A) and C)
F) A) and B)

Question 5

Which of the following represents a transfer payment?

Accepted Answer

A)   You transfer $1,000 from your bank account to a mutual fund.
B)   The government sends your grandfather his Social Security check.
C)   You make a payment to get legal documents showing you purchased a previously owned home.
D)   Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.E) B) and D)
F) A) and B)

Question 6

Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015.
Prices and Quantities
 
-Refer to Table 23-5. This country's output grew

Accepted Answer

A)   31.3% from 2015 to 2016.
B)   42.0% from 2016 to 2017.
C)   15.4% from 2016 to 2017.
D)   53.6% from 2017 to 2018.E) B) and D)
F) B) and C)

Question 7

Consider two items that might be included in GDP: 1)  the estimated rental value of owner-occupied housing and 2)  purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Accepted Answer

A)   Both item 1)  and item 2)  are included in the consumption component of GDP.
B)   Item 1)  is included in the consumption component of GDP, while item 2)  is included in the investment component of GDP.
C)   Item 1)  is included in the investment component of GDP, while item 2)  is included in the consumption component of GDP.
D)   Only item 2)  is included in GDP, and it is included in the investment component.E) A) and D)
F) A) and C)

Question 8

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Accepted Answer

A)   $18,000
B)   $22,000
C)   $39,000
D)   $57,000E) A) and B)
F) None of the above

Question 9

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Accepted Answer

A)   exactly one-third as much to GDP as does a dress.
B)   more than one-third as much to GDP as does a dress.
C)   less than one-third as much to GDP as does a dress.
D)   exactly one-fourth as much to GDP as does a dress.E) B) and D)
F) None of the above

Question 10

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)   The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP.
B)   The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP.
C)   The 2015 sale increased 2015 GDP by $255,000; and caused 2007 GDP to be revised downward by $20,000.
D)   The 2015 sale affected neither 2007 GDP nor 2015 GDP.E) All of the above
F) A) and C)

Question 11

What three types of goods are included in investment spending?

Accepted Answer

capital equipment, i...

Question 12

If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

Accepted Answer

A) True 
 B)False

Question 13

U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?

Accepted Answer

Since this is in real terms, it tells us...

Question 14

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

Accepted Answer

A)   When she babysits for her sister and when she babysits for someone else.
B)   When she babysits for her sister, but not when she babysits for someone else.
C)   When she babysits for someone else, but not when she babysits for her sister.
D)   Neither when she babysits for her sister nor for someone else.E) A) and C)
F) All of the above

Question 15

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Accepted Answer

A)   Bolivia, Thailand, United States, Sweden.
B)   Thailand, United States, Sweden, Bolivia.
C)   United States, Bolivia, Sweden, Thailand.
D)   Bolivia, Thailand, Sweden, United States.E) A) and C)
F) B) and C)

Question 16

Table 23-11
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 23-11.
What was nominal GDP, real GDP, and the GDP deflator for 2009? Show your work.

Accepted Answer

Nominal GDP was $5x90 + $50x15...

Question 17

U.S. GDP and U.S. GNP are related as follows:

Accepted Answer

A)   GNP = GDP + Value of exported goods - Value of imported goods.
B)   GNP = GDP - Value of exported goods + Value of imported goods.
C)   GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad.
D)   GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.E) B) and D)
F) B) and C)

Question 18

Which of the following is a true statement?

Accepted Answer

A)   International data leave few doubts that a nation's GDP per person is associated with its citizens' standard of living.
B)   Rich and poor countries often have vastly different standards of living, but similar levels of real GDP per person.
C)   The value of leisure time is included in the calculation of GDP per person.
D)   International data indicate that measures on the distribution of income are closely associated with GDP per person.E) B) and D)
F) A) and D)

Question 19

Which component of GDP includes spending on new structures and equipment?

Accepted Answer

The answer of Which component of GDP includes spending on...

Question 20

Table 23-10
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 2015 .
 
-Refer to Table 23-10. In which year was this country's real GDP highest?

Accepted Answer

A)   2014
B)   2015
C)   2016
D)   2017E) A) and B)
F) B) and C)

Exam 10: Measuring a Nations Income

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Correct AnswerverifiedShow Answer

Expenditures by households on education are included in the investment component of GDP.

Correct AnswerverifiedShow Answer

If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

Correct AnswerverifiedShow Answer

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?

Correct AnswerverifiedShow Answer

U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?

Correct AnswerverifiedSince this is in real terms, it tells us...View AnswerShow Answer

National income is defined as

Correct AnswerverifiedShow Answer

Consider two items that might be included in GDP: 1) the estimated rental value of owner-occupied housing and 2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Correct AnswerverifiedShow Answer

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. This country's output grew

Correct AnswerverifiedShow Answer

Which component of GDP includes spending on new structures and equipment?

Correct AnswerverifiedShow Answer

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Correct AnswerverifiedShow Answer

A U.S.-owned automobile factory 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

What three types of goods are included in investment spending?

Correct Answerverifiedcapital equipment, i...View AnswerShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Table 23-11 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 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2009? Show your work.

Correct AnswerverifiedNominal GDP was $5x90 + $50x15...View AnswerShow Answer

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Correct AnswerverifiedShow Answer

Table 23-10 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 2015 . -Refer to Table 23-10. In which year was this country's real GDP highest?

Correct AnswerverifiedShow Answer

Which of the following represents a transfer payment?

Correct AnswerverifiedShow Answer

U.S. GDP and U.S. GNP are related as follows:

Correct AnswerverifiedShow Answer

The Patersons bought a home that was newly constructed in 2007 for $275,000. They sold the home in 2015 for $255,000. Which of the following statements is correct regarding the sale of the house?

Correct AnswerverifiedShow Answer

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What were country A's imports in 2010?

Correct AnswerverifiedShow Answer

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Nominal GDP was $5x90 + $50x15...
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