Question 1

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays the salary of a Navy officer.
B)   The state of Nevada pays a private firm to repair a Nevada state highway.
C)   The city of Las Vegas,Nevada pays a private firm to collect garbage in that city.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 2

The GDP deflator is the ratio of

Accepted Answer

A)   real GDP to nominal GDP multiplied by 100.
B)   real GDP to the inflation rate multiplied by 100.
C)   nominal GDP to real GDP multiplied by 100.
D)   nominal GDP to the inflation rate multiplied by 100.E) A) and B)
F) B) and D)

Question 3

Table 23-3
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-3.What was Wrexington's investment in 2008?

Accepted Answer

A)   $675
B)   $1090
C)   $1491
D)   $1793E) C) and D)
F) A) and B)

Question 4

In the United States in 2007,consumption represented approximately

Accepted Answer

A)   5 percent of GDP.
B)   15 percent of GDP.
C)   19 percent of GDP.
D)   70 percent of GDP.E) B) and C)
F) C) and D)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)   consumption of durable goods
B)   consumption of nondurable goods
C)   consumption of services
D)   investmentE) A) and B)
F) C) and D)

Question 7

For the purpose of calculating GDP,investment is spending on

Accepted Answer

A)   stocks,bonds,and other financial assets.
B)   real estate and financial assets such as stocks and bonds.
C)   capital equipment,inventories,and structures,including household purchases of new housing.
D)   capital equipment,inventories,and structures,excluding household purchases of new housing.E) All of the above
F) A) and D)

Question 8

Which of the following is an example of depreciation?

Accepted Answer

A)   falling stock prices
B)   the retirement of several employees
C)   computers becoming obsolete
D)   All of the above are examples of depreciation.E) All of the above
F) C) and D)

Question 9

To compute GDP,we

Accepted Answer

A)   add up the wages paid to all workers.
B)   add up the costs of producing all final goods and services.
C)   add up the market values of all final goods and services.
D)   take the difference between the market values of all final goods and services and the costs of producing those final goods and services.E) A) and C)
F) B) and D)

Question 10

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.Batterland's inflation rate from 2007 to 2008 was

Accepted Answer

A)   15%.
B)   22.5%.
C)   33.3%.
D)   72.5%.E) All of the above
F) B) and C)

Question 11

Consider two cars manufactured by Chevrolet in 2007.During 2007,Chevrolet sells one of the two cars to Sean for $24,000.Later in the same year,Sean sells the car to Kati for $19,000.The second automobile,with a market value of $30,000,is unsold at the end of 2007 and it remains in Chevrolet's inventory.The transactions just described contribute how much to GDP for 2007?

Accepted Answer

A)   $24,000
B)   $43,000
C)   $54,000
D)   $73,000E) All of the above
F) B) and C)

Question 12

Anna,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Accepted Answer

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

Question 13

In the economy of Wrexington in 2008,consumption was $200,exports were $50,GDP was $325,government purchases were $100,imports were $125,and investment was $100.What were Wrexington's net exports in 2008?

Accepted Answer

A)   -$75
B)   -$50
C)   $50
D)   $75E) A) and D)
F) A) and C)

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 subtracted from the total income of a nation's permanent residents.
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are subtracted from the total income of a nation's permanent residents.E) All of the above
F) C) and D)

Question 15

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

Question 16

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)   nominal GDP from the base year that cannot be attributable to a change in real GDP.
B)   real GDP from the base year that cannot be attributable to a change in nominal GDP.
C)   nominal GDP from the base year that cannot be attributable to a change in prices.
D)   real GDP from the base year that cannot be attributable to a change in prices.E) All of the above
F) None of the above

Question 17

Unemployment compensation is

Accepted Answer

A)   part of GDP because it represents income.
B)   part of GDP because the recipients must have worked in the past to qualify.
C)   not part of GDP because it is a transfer payment.
D)   not part of GDP because the payments reduce business profits.E) None of the above
F) B) and C)

Question 18

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 19

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)   The bank transfers $10 in quarterly interest to your savings account.
D)   Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.E) None of the above
F) A) and D)

Question 20

The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

Accepted Answer

A)   U.S.government purchases increase by $30,000;U.S.net exports decrease by $30,000;and U.S.GDP is unaffected.
B)   U.S.government purchases increase by $30,000;U.S.net exports are unaffected;and U.S.GDP increases by $30,000.
C)   U.S.government purchases,net exports,and GDP are unaffected.
D)   U.S.government purchases are unaffected;U.S.net exports decrease by $30,000;and U.S.GDP decreases by $30,000.E) A) and B)
F) A) and C)

Exam 23: Measuring a Nations Income

Which of the following represents a transfer payment?

Correct Answer
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For the purpose of calculating GDP,investment is spending on

Correct Answer
verified

To compute GDP,we

Correct Answer
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In the economy of Wrexington in 2008,consumption was $200,exports were $50,GDP was $325,government purchases were $100,imports were $125,and investment was $100.What were Wrexington's net exports in 2008?

Correct Answer
verified

The GDP deflator for years subsequent to the base year measures the change in

Correct Answer
verified

Which of the following is an example of depreciation?

Correct Answer
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Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What was Wrexington's investment in 2008?

Correct Answer
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How is net national product (NNP) calculated?

Correct Answer
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Unemployment compensation is

Correct Answer
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The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

Correct Answer
verified

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

Correct Answer
verified

The GDP deflator is the ratio of

Correct Answer
verified

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Correct Answer
verified

Household spending on education is counted in which component or subcomponent of GDP?

Correct Answer
verified

Anna,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Correct Answer
verified

In the United States in 2007,consumption represented approximately

Correct Answer
verified

GDP does not reflect

Correct Answer
verified

Correct Answer
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Which of the following items is counted as part of government purchases?

Correct Answer
verified

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.Batterland's inflation rate from 2007 to 2008 was

Correct Answer
verified

Exam 23: Measuring a Nations Income

Which of the following represents a transfer payment?

Correct AnswerverifiedShow Answer

For the purpose of calculating GDP,investment is spending on

Correct AnswerverifiedShow Answer

To compute GDP,we

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $200,exports were $50,GDP was $325,government purchases were $100,imports were $125,and investment was $100.What were Wrexington's net exports in 2008?

Correct AnswerverifiedShow Answer

The GDP deflator for years subsequent to the base year measures the change in

Correct AnswerverifiedShow Answer

Which of the following is an example of depreciation?

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What was Wrexington's investment in 2008?

Correct AnswerverifiedShow Answer

How is net national product (NNP) calculated?

Correct AnswerverifiedShow Answer

Unemployment compensation is

Correct AnswerverifiedShow Answer

The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The GDP deflator is the ratio of

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

Household spending on education is counted in which component or subcomponent of GDP?

Correct AnswerverifiedShow Answer

Anna,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Correct AnswerverifiedShow Answer

In the United States in 2007,consumption represented approximately

Correct AnswerverifiedShow Answer

GDP does not reflect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following items is counted as part of government purchases?

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.Batterland's inflation rate from 2007 to 2008 was

Correct AnswerverifiedShow Answer

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