Question 1

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

Accepted Answer

A)   gross investment minus depreciation.
B)   gross investment plus depreciation.
C)   gross investment.
D)   net investment.E) All of the above
F) B) and D)

Question 2

Is it possible for nominal GDP to increase while real GDP does not change?

Accepted Answer

Yes, it is possible for nominal GDP to i...

Question 3

Two methods of measuring GDP are

Accepted Answer

A)   the saving approach and the investment approach.
B)   the goods approach and the services approach.
C)   the income approach and the expenditure approach.
D)   the income approach and the receipts approach.E) A) and B)
F) All of the above

Question 4

According to the circular flow diagram, the dollar value of a nation's output is equal to

Accepted Answer

A)   profits.
B)   net income minus taxes.
C)   total income.
D)   wages.E) None of the above
F) B) and C)

Question 5

-Based on the data in the above table, gross domestic product equals

Accepted Answer

A)   $2,750.
B)   $2,465.
C)   $2,840.
D)   $2,190.E) All of the above
F) A) and B)

Question 6

Compensation paid to employees represented of GDP for the United States in 2008.

Accepted Answer

A)   more than 50 percent
B)   approximately 15 percent
C)   35 percent
D)   about 5 percentE) A) and D)
F) None of the above

Question 7

Gross investment equals net investment plus

Accepted Answer

A)   depreciation.
B)   capital.
C)   dividends paid to the owners of the company.
D)   capital gains.E) All of the above
F) A) and B)

Question 8

If a measure of real GDP could include the value of leisure time, measured real GDP would increase.

Accepted Answer

A) True 
 B)False

Question 9

In the national income accounts, the purchase of a new house counts as

Accepted Answer

A)   investment.
B)   consumption expenditure.
C)   a transfer.
D)   an addition to inventory.E) C) and D)
F) A) and B)

Question 10

GDP declines during

Accepted Answer

A)   the movement from trough to peak.
B)   a decrease in unemployment.
C)   the movement from below potential GDP back to potential GDP.
D)   the movement from peak to trough.E) A) and C)
F) A) and B)

Question 11

Proprietors' income is a component of which approach to measuring GDP?

Accepted Answer

A)   output approach
B)   incomes approach
C)   cost approach
D)   expenditure approachE) A) and B)
F) B) and C)

Question 12

Which of the following is NOT one of the components for computing GDP based upon the income approach?

Accepted Answer

A)   net interest
B)   investment
C)   compensation of employees
D)   corporate profitsE) A) and B)
F) A) and D)

Question 13

The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euro constant prices) :  Which of the following is true regarding Ireland's economy?

Accepted Answer

A)   GDP decreased from 2006 to 2007.
B)   Consumption was 48 percent of Ireland's GDP in 2007.
C)   Net exports decreased from 2006 to 2007.
D)   The change in GDP from 2006 to 2007 represented a peak in the business cycle.E) C) and D)
F) B) and C)

Question 14

Which of the following expressions equals GDP?

Accepted Answer

A)   compensation of employees + consumption + depreciation + net investment
B)   compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies
C)   compensation of employees + net exports + depreciation + corporate profits
D)   compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidiesE) A) and C)
F) All of the above

Question 15

In years with inflation, nominal GDP increases real GDP.

Accepted Answer

A)   slower than
B)   faster than
C)   at the same rate as
D)   sometimes faster, sometimes slower, and sometimes at the same rate asE) A) and B)
F) A) and C)

Question 16

Which of the following is not a phase or turning point of the business cycle?

Accepted Answer

A)   recession
B)   shutdown
C)   trough
D)   expansionE) A) and D)
F) A) and C)

Question 17

Government expenditures included in the expenditures approach to GDP include .

Accepted Answer

A)   net exports
B)   social security and education
C)   buying a new bomber
D)   Both answers A and C are correctE) C) and D)
F) A) and B)

Question 18

Personal consumption expenditures include

Accepted Answer

A)   the purchase of used goods and new goods.
B)   the purchase of new homes.
C)   expenditures by households on goods and services produced in the United States and the rest of the world.
D)   expenditures by households on goods and services produced only in the United States.E) C) and D)
F) A) and C)

Question 19

What we produce during our working time is as part of GDP and the enjoyment we gain from our leisure time is as part of GDP.

Accepted Answer

A)   not included; included
B)   included; not included
C)   not included; not included
D)   included; includedE) A) and D)
F) B) and D)

Question 20

The circular flow diagram indicates that

Accepted Answer

A)   firms buy goods and services from households.
B)   households sell goods and services to the government.
C)   firms buy the services of factors of production from the government.
D)   households sell the services of factors of production to firms.E) All of the above
F) B) and C)

Exam 4: Measuring Gdp and Economic Growth

Which of the following expressions equals GDP?

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According to the circular flow diagram, the dollar value of a nation's output is equal to

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The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euro constant prices) : Which of the following is true regarding Ireland's economy?

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The circular flow diagram indicates that

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Is it possible for nominal GDP to increase while real GDP does not change?

Correct AnswerverifiedYes, it is possible for nominal GDP to i...View AnswerShow Answer

Compensation paid to employees represented of GDP for the United States in 2008.

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Proprietors' income is a component of which approach to measuring GDP?

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Personal consumption expenditures include

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In years with inflation, nominal GDP increases real GDP.

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Which of the following is NOT one of the components for computing GDP based upon the income approach?

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-Based on the data in the above table, gross domestic product equals

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Government expenditures included in the expenditures approach to GDP include .

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If a measure of real GDP could include the value of leisure time, measured real GDP would increase.

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Two methods of measuring GDP are

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In the calculation of gross domestic product by the expenditure approach, the "investment" component is

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What we produce during our working time is as part of GDP and the enjoyment we gain from our leisure time is as part of GDP.

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GDP declines during

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Which of the following is not a phase or turning point of the business cycle?

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In the national income accounts, the purchase of a new house counts as

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Gross investment equals net investment plus

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Yes, it is possible for nominal GDP to i...
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