Question 1

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 2

​When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

Accepted Answer

A) True 
 B)False

Question 3

Nominal GDP is $15 trillion and real GDP is $10 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = N...

Question 4

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

Accepted Answer

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

Question 5

Consumption expenditures were previously the largest component of GDP, but with the growth of government and government expenditures, this is no longer true.
​

Accepted Answer

A) True 
 B)False

Question 6

If net exports is a negative number for a particular year, then

Accepted Answer

A)  the value of firms' inventories declined over the course of the year.
B)  consumption exceeded the sum of investment and government purchases during the year.
C)  the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year.
D)  the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.E) A) and C)
F) All of the above

Question 7

Expenditures on a nation's domestic production

Accepted Answer

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

Question 8

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 9

A newspaper article informs you that most businesses increased production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Accepted Answer

A)  decreased.
B)  increased.
C)  stayed the same.
D)  may have increased, decreased, or stayed the same.E) None of the above
F) B) and D)

Question 10

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Accepted Answer

A) True 
 B)False

Question 11

Table 23-5
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown in the following table. The base year is 2017.
​
​
 
-Refer to Table 23-5. What was this country's nominal GDP in 2016?

Accepted Answer

A)  $9,500
B)  $10,000
C)  $10,200
D)  $10,500E) All of the above
F) A) and B)

Question 12

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 13

Figure 23-2
​ 
-Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Accepted Answer

X is markets for fac...

Question 14

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Accepted Answer

A) True 
 B)False

Question 15

A statistical discrepancy

Accepted Answer

A)  exists because data sources are not perfect, so measures of expenditures and income are not equal.
B)  insures that GDP will approximately equal GNP.
C)  explains the close association between GDP and quality of life measures such as literacy and life expectancy.
D)  explains the inadequacy of GDP in capturing the value of leisure and the value of a clean environment.E) None of the above
F) A) and B)

Question 16

Explain how real GDP differs from nominal GDP.

Accepted Answer

Real GDP reflects on...

Question 17

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Accepted Answer

Wages, rents, and pr...

Question 18

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Accepted Answer

A) True 
 B)False

Question 19

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nations Income

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Correct AnswerverifiedWages, rents, and pr...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Correct AnswerverifiedShow Answer

A newspaper article informs you that most businesses increased production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Correct AnswerverifiedShow Answer

Nominal GDP is $15 trillion and real GDP is $10 trillion. What is the GDP deflator? Show your work.

Correct AnswerverifiedThe GDP Deflator = N...View AnswerShow Answer

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Correct AnswerverifiedShow Answer

Microeconomics and macroeconomics are closely linked.

Correct AnswerverifiedShow Answer

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Correct AnswerverifiedShow Answer

Explain how real GDP differs from nominal GDP.

Correct AnswerverifiedReal GDP reflects on...View AnswerShow Answer

Expenditures on a nation's domestic production

Correct AnswerverifiedShow Answer

Consumption expenditures were previously the largest component of GDP, but with the growth of government and government expenditures, this is no longer true. ​

Correct AnswerverifiedShow Answer

​When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

Correct AnswerverifiedShow Answer

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Correct AnswerverifiedShow Answer

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Correct AnswerverifiedShow Answer

If net exports is a negative number for a particular year, then

Correct AnswerverifiedShow Answer

Table 23-5 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown in the following table. The base year is 2017. ​ ​ -Refer to Table 23-5. What was this country's nominal GDP in 2016?

Correct AnswerverifiedShow Answer

Changes in real GDP reflect only changes in the amounts being produced.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 23-2 ​ -Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Correct AnswerverifiedX is markets for fac...View AnswerShow Answer

A statistical discrepancy

Correct AnswerverifiedShow Answer

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Wages, rents, and pr...
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The GDP Deflator = N...
View Answer

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Correct Answer
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Real GDP reflects on...
View Answer

Correct Answer
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Consumption expenditures were previously the largest component of GDP, but with the growth of government and government expenditures, this is no longer true.

Correct Answer
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When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Table 23-5 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown in the following table. The base year is 2017. -Refer to Table 23-5. What was this country's nominal GDP in 2016?

Correct Answer
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Figure 23-2 -Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Correct Answer
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X is markets for fac...
View Answer

Correct Answer
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