Question 1

The GDP deflator is the

Accepted Answer

A)   difference between real GDP and nominal GDP multiplied by 100.
B)   difference between nominal GDP and real GDP divided by 100.
C)   ratio of real GDP to nominal GDP multiplied by 100.
D)   ratio of nominal GDP to real GDP multiplied by 100.E) C) and D)
F) None of the above

Question 2

Which of the following statements about the underground economy is true?

Accepted Answer

A)   The underground economy in developing countries amounts to less than 10% of measured GDP.
B)   Most transactions that occur in the underground economy are included in the calculation of GDP.
C)   Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run.
D)   Income that is earned but not reported as income for tax purposes is included in the calculation of GDP.E) A) and B)
F) All of the above

Question 3

Which of the following could cause nominal GDP to increase next year,but real GDP to decrease?

Accepted Answer

A)   The price level rises and the quantity of final goods and services produced rises.
B)   The price level rises and the quantity of final goods and services produced falls.
C)   The price level falls and the quantity of final goods and services produced rises.
D)   The price level falls and the quantity of final goods and services produced falls.E) B) and D)
F) None of the above

Question 4

Which of the following would increase gross private domestic investment in an economy?

Accepted Answer

A)   an increase in the shares of Apple stock households own
B)   an increase in the number of workers Apple hires
C)   an increase in the level of Apple's inventory
D)   an increase in the number of highway construction projects the government is fundingE) A) and D)
F) All of the above

Question 5

The nominal GDP of the U.S.in 2016 was approximately $18.6 trillion.This means that

Accepted Answer

A)   the value of output in 2016 was around $18.6 trillion.
B)   total income in 2016 was around $18.6 trillion.
C)   total spending in 2016 was around $18.6 trillion.
D)   all of the above are true.E) A) and D)
F) B) and D)

Question 6

In 2016,Ford's sales were rising,but in early 2017,Ford's sales declined.Ford and the U.S.automobile industry were experiencing the effects of

Accepted Answer

A)   inflation.
B)   the underground economy.
C)   the business cycle.
D)   depreciation.E) B) and D)
F) All of the above

Question 7

The best measure of the income households actually have available to spend is

Accepted Answer

A)   personal income.
B)   disposable personal income.
C)   national income.
D)   net national income.E) B) and C)
F) A) and D)

Question 8

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

Accepted Answer

The formula for the GDP deflator is give...

Question 9

Which of the following would not be included in the expenditure category called investment expenditures?

Accepted Answer

A)   spending on new houses
B)   a purchase of shares of preferred stock
C)   a purchase of a copy machine by FedEx Office
D)   the cars held in inventory on a local Ford dealer's lotE) All of the above
F) A) and C)

Question 10

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Accepted Answer

A)   2 percent
B)   8 percent
C)   13 percent
D)   over 50 percentE) All of the above
F) A) and D)

Question 11

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Accepted Answer

A)   equals
B)   is greater than
C)   is less than
D)   may be greater than or less thanE) All of the above
F) A) and B)

Question 12

The purchase of a new house is included in

Accepted Answer

A)   consumption expenditures.
B)   investment expenditures.
C)   government purchases.
D)   net exports.E) A) and B)
F) A) and C)

Question 13

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A)   If nominal GDP increases from one year to the next, we know that production of goods and services has risen.
B)   Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year.
C)   Increases in average prices do not affect the calculation of nominal GDP.
D)   If real GDP increases from one year to the next, we know that production of goods and services has risen.E) A) and B)
F) B) and D)

Question 14

Relative to Canada,China has a ________ growth rate in GDP and a ________ level of real GDP.

Accepted Answer

A)   higher; lower
B)   higher; higher
C)   lower; lower
D)   lower; higherE) A) and D)
F) C) and D)

Question 15

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Accepted Answer

A) True 
 B)False

Question 16

An example of business fixed investment spending is

Accepted Answer

A)   a purchase of a home by a household.
B)   a purchase of a computer by an accounting firm.
C)   a purchase of a bond by General Electric Corporation.
D)   $200 million of unsold cars at a car dealership.E) B) and C)
F) A) and D)

Question 17

An example of an intermediate good would be

Accepted Answer

A)   the bread that goes into a sub sandwich that is sold by Quiznos.
B)   the soda pop sold by Quiznos.
C)   a sub sandwich sold by Quiznos.
D)   the potato chips sold by Quiznos.E) None of the above
F) A) and B)

Question 18

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Accepted Answer

A) True 
 B)False

Question 19

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Accepted Answer

A)   crime rate increased.
B)   percentage of people addicted to illegal drugs increased.
C)   amount of pollution decreased.
D)   average hours worked per week increased.E) None of the above
F) B) and D)

Question 20

Table 12-24
 $\begin{array}{|l|r|c|}
\hline & \mathbf{2 0 1 7} & \mathbf{2 0 1 8} \
\hline \text { Nominal GDP } & \mathbf{\$ 1 0 , 0 0 0} & \$ 15,000 \
\hline \text { Real GDP } & 9,500 & 10,500 \
\hline
\end{array}$
-Refer to Table 12-24.Given the following information,calculate the rate of increase in the price level from 2017 to 2018.Use the percent change in the GDP deflator.

Accepted Answer

To calculate the rate of chang...

Exam 12: GDP: Measuring Total Production and Income

Which of the following could cause nominal GDP to increase next year,but real GDP to decrease?

Correct Answer
verified

Which of the following is a true statement about real and nominal GDP?

Correct Answer
verified

The purchase of a new house is included in

Correct Answer
verified

Which of the following would increase gross private domestic investment in an economy?

Correct Answer
verified

In 2016,Ford's sales were rising,but in early 2017,Ford's sales declined.Ford and the U.S.automobile industry were experiencing the effects of

Correct Answer
verified

Relative to Canada,China has a growth rate in GDP and a level of real GDP.

Correct Answer
verified

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Correct Answer
verified

Correct Answer
verified
To calculate the rate of chang...
View Answer

The nominal GDP of the U.S.in 2016 was approximately $18.6 trillion.This means that

Correct Answer
verified

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Correct Answer
verified

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Correct Answer
verified

The best measure of the income households actually have available to spend is

Correct Answer
verified

Which of the following would not be included in the expenditure category called investment expenditures?

Correct Answer
verified

An example of an intermediate good would be

Correct Answer
verified

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Correct Answer
verified

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Correct Answer
verified

An example of business fixed investment spending is

Correct Answer
verified

The GDP deflator is the

Correct Answer
verified

Which of the following statements about the underground economy is true?

Correct Answer
verified

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

Correct Answer
verified
The formula for the GDP deflator is give...
View Answer

Exam 12: GDP: Measuring Total Production and Income

Which of the following could cause nominal GDP to increase next year,but real GDP to decrease?

Correct AnswerverifiedShow Answer

Which of the following is a true statement about real and nominal GDP?

Correct AnswerverifiedShow Answer

The purchase of a new house is included in

Correct AnswerverifiedShow Answer

Which of the following would increase gross private domestic investment in an economy?

Correct AnswerverifiedShow Answer

In 2016,Ford's sales were rising,but in early 2017,Ford's sales declined.Ford and the U.S.automobile industry were experiencing the effects of

Correct AnswerverifiedShow Answer

Relative to Canada,China has a ________ growth rate in GDP and a ________ level of real GDP.

Correct AnswerverifiedShow Answer

If an increase in crime causes households to spend money on police and security systems,GDP will rise.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTo calculate the rate of chang...View AnswerShow Answer

The nominal GDP of the U.S.in 2016 was approximately $18.6 trillion.This means that

Correct AnswerverifiedShow Answer

Increases in real GDP would understate the well-being of a country over time if,over that time period,the

Correct AnswerverifiedShow Answer

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Correct AnswerverifiedShow Answer

The best measure of the income households actually have available to spend is

Correct AnswerverifiedShow Answer

Which of the following would not be included in the expenditure category called investment expenditures?

Correct AnswerverifiedShow Answer

An example of an intermediate good would be

Correct AnswerverifiedShow Answer

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Correct AnswerverifiedShow Answer

In the circular flow model,the value of total production for an economy ________ the value of total expenditures on final goods and services.

Correct AnswerverifiedShow Answer

An example of business fixed investment spending is

Correct AnswerverifiedShow Answer

The GDP deflator is the

Correct AnswerverifiedShow Answer

Which of the following statements about the underground economy is true?

Correct AnswerverifiedShow Answer

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

Correct AnswerverifiedThe formula for the GDP deflator is give...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Relative to Canada,China has a growth rate in GDP and a level of real GDP.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
To calculate the rate of chang...
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
The formula for the GDP deflator is give...
View Answer