Question 1

Transfer payments

Accepted Answer

A)   are payments that flow from government to households.
B)   are not made in exchange for currently produced goods or services.
C)   alter household income,but they do not reflect the economy's production.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 2

In the economy of Wrexington in 2008,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Wrexington's net exports in 2008?

Accepted Answer

A)   -$250
B)   $250
C)   $2200
D)   Net exports cannot be calculated from the information given.E) B) and C)
F) A) and B)

Question 3

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 unemployment rate of the economy's labor force.
B)   Money continuously flows from households to government and then back to households,and GDP measures this flow of money.
C)   GDP is to a nation's economy as household income is to a household.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 4

For an economy as a whole,

Accepted Answer

A)   wages must equal profit.
B)   consumption must equal saving.
C)   income must equal expenditure.
D)   the number of buyers must equal the number of sellers.E) A) and B)
F) A) and C)

Question 5

Table 23-2
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-2.What were Wrexington's imports in 2008?

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) All of the above
F) B) and D)

Question 6

In a simple circular-flow diagram,total income and total expenditure are

Accepted Answer

A)   never equal because total income always exceeds total expenditure.
B)   seldom equal because of the ongoing changes in an economy's unemployment rate.
C)   equal only when one dollar is spent on goods for every dollar that is spent on services.
D)   always equal because every transaction has a buyer and a seller.E) C) and D)
F) A) and D)

Question 7

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

Accepted Answer

A)   saving per person.
B)   GDP per person.
C)   government expenditures per person.
D)   investment per business firm.E) B) and C)
F) A) and D)

Question 8

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

Accepted Answer

A)   $100.
B)   $110.
C)   $115.
D)   $130.E) None of the above
F) A) and D)

Question 9

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

A)   then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.
B)   then GDP will be higher,but consumption spending will be unchanged.
C)   then GDP will be unchanged,but consumption spending will be higher.
D)   then both GDP and consumption spending will be higher.E) All of the above
F) A) and D)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

In the economy of Wrexington in 2008,consumption was $3000,exports were $400,GDP was $5000,imports were $600,and investment was $1100.What were Wrexington's government purchases in 2008?

Accepted Answer

A)   $300
B)   $500
C)   $700
D)   $1100E) C) and D)
F) B) and C)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Recently,the U.S.national income accounts have switched to calling government purchases

Accepted Answer

A)   government spending and transfer payments.
B)   transfer payments and gross investment by government.
C)   government consumption expenditure and gross investment.
D)   government wages,salaries,and investment expenditure.E) A) and C)
F) None of the above

Question 14

You find that your paycheck for the year is higher this year than last.Does that mean that your real income has increased? Explain carefully.

Accepted Answer

Real income is nominal income adjusted f...

Question 15

Real GDP is a better gauge of economic well-being than is nominal GDP.

Accepted Answer

A) True 
 B)False

Question 16

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
 
-Refer to Table 23-5.In 2008,Batterland's real GDP was

Accepted Answer

A)   $540.
B)   $800.
C)   $930.
D)   $1380.E) All of the above
F) A) and D)

Question 17

Which of the following values would be included in U.S.GDP for 2006?

Accepted Answer

A)   the rent that John,an American citizen,would have paid on his home in New York in 2006 had he not owned that home
B)   the rent that Sarah,an American citizen,paid on her apartment in San Francisco in 2006
C)   the value of the legal services provided by Carlos,an attorney and a Mexican citizen,who lived in Houston and practiced law there in 2006
D)   All of the above would be included in U.S.GDP for 2006.E) None of the above
F) A) and B)

Question 18

Which of the following domestically produced items is not included in GDP?

Accepted Answer

A)   a bottle of shampoo
B)   a hairdryer
C)   a haircut
D)   All of the above are included in GDP.E) All of the above
F) B) and C)

Question 19

If the price of a DVD player is three times the price of a CD player,then a DVD player contributes

Accepted Answer

A)   more than three times as much to GDP as does a CD player.
B)   less than three times as much to GDP as does a CD player.
C)   exactly three times as much to GDP as does a CD player.
D)   to GDP but a CD player does not contribute to GDP.E) A) and B)
F) A) and C)

Question 20

Which of the following transactions adds to U.S.GDP for 2006?

Accepted Answer

A)   In 2006,Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2006.
B)   An Irish marketing consultant works in Boston during the summer of 2006 and earns $30,000 during that time.
C)   When Tim and Tina were both single,they lived in separate apartments and each paid $750 in rent.Tim and Tina got married in 2006 and they bought a house that,according to reliable estimates,could be rented for $1,550 per month.
D)   All of the above transactions add to U.S.GDP for 2006.E) None of the above
F) A) and B)

Exam 23: Measuring a Nations Income

Recently,the U.S.national income accounts have switched to calling government purchases

Correct AnswerverifiedShow Answer

You find that your paycheck for the year is higher this year than last.Does that mean that your real income has increased? Explain carefully.

Correct AnswerverifiedReal income is nominal income adjusted f...View AnswerShow Answer

If you buy a burger and fries at your favorite fast food restaurant,

Correct AnswerverifiedShow Answer

In a simple circular-flow diagram,total income and total expenditure are

Correct AnswerverifiedShow Answer

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2008,Batterland's real GDP was

Correct AnswerverifiedShow Answer

Which of the following statements about GDP is correct?

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $1000,GDP was $1950,government purchases were $500,and investment was $700.What were Wrexington's net exports in 2008?

Correct AnswerverifiedShow Answer

Which of the following values would be included in U.S.GDP for 2006?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Real GDP is a better gauge of economic well-being than is nominal GDP.

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $3000,exports were $400,GDP was $5000,imports were $600,and investment was $1100.What were Wrexington's government purchases in 2008?

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Which of the following domestically produced items is not included in GDP?

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

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

Correct AnswerverifiedShow Answer

If the price of a DVD player is three times the price of a CD player,then a DVD player contributes

Correct AnswerverifiedShow Answer

Which of the following transactions adds to U.S.GDP for 2006?

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Table 23-2 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-2.What were Wrexington's imports in 2008?

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For an economy as a whole,

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Transfer payments

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GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

Correct AnswerverifiedShow Answer

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