Question 1

Figure 23-1. 
-Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Accepted Answer

A)   W, X, Y and Z
B)   K, M, L and N
C)   C, K, M and D
D)   A, L, N and BE) None of the above
F) B) and C)

Question 2

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 3

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) A) and B)
F) B) and C)

Question 4

Changes in real GDP 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) All of the above

Question 5

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Accepted Answer

A)   GDP is not a useful measure of society's welfare.
B)   GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government.
C)   GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.
D)   GDP is still the best measure of society's welfare because these other values cannot actually be measured.E) A) and B)
F) A) and C)

Question 6

Consider two cars manufactured by Chevrolet in 2014. During 2014, Chevrolet sells one of the two cars to Emily for $20,000. Later in the same year, Emily sells the car to Jim for $18,000. The second automobile, with a market value of $19,000, is unsold at the end of 2014 and it remains in Chevrolet's inventory. The transactions just described contribute how much to GDP for 2014?

Accepted Answer

A)   $20,000
B)   $37,000
C)   $38,000
D)   $39,000E) A) and D)
F) None of the above

Question 7

Which of the following is not included in GDP?

Accepted Answer

A)   carrots grown in your garden and eaten by your family
B)   carrots purchased at a farmer's market and eaten by your family
C)   carrots purchased at a grocery store and eaten by your family
D)   None of the above are included in GDP.E) None of the above
F) A) and C)

Question 8

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Suppose an economy's production consists only of corn and soybeans. In 2010, 20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel. In 2009, the price of corn was $2 per bushel and the price of soybeans was $1 per bushel. Using 2009 as the base year, it follows that, for 2010,

Accepted Answer

A)   nominal GDP is $50, real GDP is $100, and the GDP deflator is 50.
B)   nominal GDP is $50, real GDP is $100, and the GDP deflator is 200.
C)   nominal GDP is $100, real GDP is $50, and the GDP deflator is 50.
D)   nominal GDP is $100, real GDP is $50, and the GDP deflator is 200.E) A) and C)
F) A) and B)

Question 11

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

Accepted Answer

A)   included in current GDP because GDP measures the value of all goods and services sold in the current year.
B)   included in current GDP but valued at their original prices.
C)   not included in current GDP because it is difficult to determine their value.
D)   not included in current GDP because GDP only measures the value of goods and services produced in the current year.E) B) and C)
F) A) and D)

Question 12

Which of the following is not included in U.S. GDP?

Accepted Answer

A)   additions of newly produced output to inventory
B)   production of U.S citizens working in foreign countries.
C)   the estimated rental value of owner-occupied housing
D)   the value of food purchased from a grocery store to make meals at home without payE) None of the above
F) A) and B)

Question 13

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Accepted Answer

A)   U.S. exports and U.S imports increase.
B)   U.S. exports but not U.S. imports increase.
C)   U.S. imports but not U.S. exports increase.
D)   neither U.S. exports nor U.S. imports increase.E) A) and B)
F) B) and D)

Question 14

How is net national product NNP)  calculated?

Accepted Answer

A)   Saving is subtracted from the total income of a nation's citizens.
B)   Saving is added to the total income of a nation's citizens
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are added to the total income of a nation's citizens.E) A) and B)
F) A) and C)

Question 15

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

Accepted Answer

A)   GNP which is larger than GDP in country A.
B)   GNP which is smaller than GDP in country A.
C)   GDP which is larger than GNP in country A.
D)   GDP which is smaller than GNP in country A.E) All of the above
F) B) and C)

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

Question 17

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) None of the above
F) All of the above

Question 18

Income generated by a nation's domestic production

Accepted Answer

A)   is less than its domestic production.
B)   is equal to its domestic production.
C)   is greater than its domestic production.
D)   could be less than, equal to, or greater than its domestic production.E) A) and C)
F) C) and D)

Question 19

Suppose there are only two firms in an economy: Cowhide, Inc. produces leather and sells it to Couches, Inc., which produces and sells leather furniture. With each $1,000 worth of leather that it buys from Cowhide, Inc., Couches, Inc. produces a couch and sells it for $2,600. Neither firm had any inventory at the beginning of 2015. During that year, Cowhide produced enough leather for 25 couches. Couches, Inc. bought 80% of that leather for $20,000 and promised to buy the remaining 20% for $5,000 in 2016. Couches, Inc. produced 20 couches during 2015 and sold each one during that year for $2,600. What was the economy's GDP for 2015?

Accepted Answer

A)   $25,000
B)   $52,000
C)   $57,000
D)   $65,000E) A) and D)
F) A) and C)

Question 20

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

Accepted Answer

A)   Only Joe's grocery store purchases are included in GDP.
B)   Only Joe's and Jim's grocery store purchases are included in GDP.
C)   Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value.
D)   Joe's and Jim's grocery store purchases are included in GDP. The vegetables from Jim's backyard garden are included at their market value, if Jim provides this information.E) A) and B)
F) A) and C)

Exam 15: Measuring a Nations Income

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

Correct Answer
verified

Which of the following statements about GDP is correct?

Correct Answer
verified

How is net national product NNP) calculated?

Correct Answer
verified

Changes in real GDP reflect

Correct Answer
verified

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct Answer
verified

Correct Answer
verified

Which of the following is not included in GDP?

Correct Answer
verified

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 Answer
verified
The purchase of foreign equipment is cou...
View Answer

Income generated by a nation's domestic production

Correct Answer
verified

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 Answer
verified

Correct Answer
verified

Which of the following is not included in U.S. GDP?

Correct Answer
verified

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

Correct Answer
verified

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Correct Answer
verified

Correct Answer
verified

Figure 23-1. -Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Correct Answer
verified

Which of the following represents a transfer payment?

Correct Answer
verified

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct Answer
verified

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

Correct Answer
verified

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

Correct Answer
verified

Exam 15: Measuring a Nations Income

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

Which of the following statements about GDP is correct?

Correct AnswerverifiedShow Answer

How is net national product NNP) calculated?

Correct AnswerverifiedShow Answer

Changes in real GDP reflect

Correct AnswerverifiedShow Answer

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not included in GDP?

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

Income generated by a nation's domestic production

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

Correct AnswerverifiedShow Answer

Which of the following is not included in U.S. GDP?

Correct AnswerverifiedShow Answer

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

Correct AnswerverifiedShow Answer

If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 23-1. -Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

Correct AnswerverifiedShow Answer

Which of the following represents a transfer payment?

Correct AnswerverifiedShow Answer

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct AnswerverifiedShow Answer

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

Correct AnswerverifiedShow Answer

The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million in country A. These earnings are accounted for in country A's

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The purchase of foreign equipment is cou...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified