Question 1

The purchase of rice produced this period is included in GDP if the rice is

Accepted Answer

A)   used in a meal a restaurant sells during the same period they buy the rice.
B)   purchased by a family who uses it to make tuna casserole for its supper.
C)   purchased by a frozen food company to increase its inventory.
D)   B and C are correct.E) B) and C)
F) A) and B)

Question 2

Which of the following is included in GDP?

Accepted Answer

A)   medical marijuana purchased from a government-run pharmacy by a glaucoma patient
B)   recreational marijuana purchased from a drug dealer by a college student
C)   recreational marijuana produced and consumed by a man in his attic
D)   All of the above are included in GDP.E) B) and C)
F) A) and B)

Question 3

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Accepted Answer

A)   U.S. investment, GDP, and GNP all increase by the same amount.
B)   U.S. investment increases, but GDP and GNP are unaffected by the purchase.
C)   U.S. investment and GDP increase by the same amount, but U.S. GNP increases by a smaller amount.
D)   U.S. investment and GNP increase by the same amount, but U.S. GDP increases by a smaller amount.E) All of the above
F) A) and D)

Question 4

Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion?

Accepted Answer

A)   GDP necessarily increases.
B)   GDP necessarily decreases.
C)   GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP.
D)   GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of owner occupied housing services.E) B) and C)
F) All of the above

Question 5

Unlike national income, personal income

Accepted Answer

A)   includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government.
B)   excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government.
C)   excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government.
D)   includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government.E) B) and D)
F) A) and B)

Question 6

Nominal GDP will definitely increase when

Accepted Answer

A)   prices increase and output increases.
B)   prices increase and output decreases.
C)   prices decrease and output increases.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 7

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Accepted Answer

A)   investment.
B)   government spending.
C)   consumption of services.
D)   consumption of durable goods.E) B) and D)
F) None of the above

Question 8

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Accepted Answer

The GDP deflator for 2010 was ...

Question 9

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A)   unpaid housework but not the rental value of owner-occupied homes.
B)   the rental value of owner-occupied homes but not unpaid housework.
C)   unpaid housework and the rental value of owner-occupied homes.
D)   Neither unpaid housework nor the rental value of owner-occupied homes.E) A) and B)
F) A) and C)

Question 10

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $218
B)   $2500
C)   $1520
D)   $2100E) C) and D)
F) A) and D)

Question 11

According to the circular-flow diagram GDP

Accepted Answer

A)   can be computed as the total income paid by firms or as expenditures on final goods and services.
B)   can be computed as the total income paid by firms, but not as expenditures on final goods and services.
C)   can be computed as expenditures on final goods and services, but not as the total income paid by firms.
D)   cannot be computed as either total income paid by firms or expenditures on final goods and services.E) B) and D)
F) B) and C)

Question 12

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2008, Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S. and $13 million in Mexico. In addition, it sold $2 million from the previous year's inventory in the U.S. The transactions just described contribute how much to U.S. GDP for 2008?

Accepted Answer

A)   $12 million
B)   $14 million
C)   $25 million
D)   $27 millionE) A) and C)
F) A) and B)

Question 13

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

Question 14

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. What was this country's GDP deflator in 2017?

Accepted Answer

A)   123.4
B)   116.7
C)   120.0
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 15

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Accepted Answer

A)   U.S. consumption purchases increase by $200 and U.S. GDP increases by $200.
B)   U.S. consumption purchases increase by $200 and U.S. GDP increases by $10,000.
C)   U.S. consumption purchases increase by $10,000 and U.S. GDP increases by $10,200.
D)   U.S. consumption purchases increase by $10,200 and U.S. GDP increases by $10,200.E) A) and B)
F) A) and C)

Question 16

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 17

During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person

Accepted Answer

A)   grew by more than 12 percent.
B)   grew, but by less than 12 percent.
C)   was unchanged.
D)   decreased.E) C) and D)
F) B) and D)

Question 18

If an economy's GDP falls, then it must be the case that the economy's

Accepted Answer

A)   income and saving fall.
B)   income and market value of all production both fall.
C)   income falls and market value of all production rises.
D)   income rises and market value of all production falls.E) All of the above
F) B) and C)

Question 19

Changes in inventory are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 20

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. In which year was this country's real GDP highest?

Accepted Answer

A)   2014
B)   2015
C)   2016
D)   2017E) None of the above
F) All of the above

Exam 15: Measuring a Nations Income

Nominal GDP will definitely increase when

Correct Answer
verified

Changes in inventory are included in the investment component of GDP.

Correct Answer
verified

Correct Answer
verified

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Correct Answer
verified

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's real GDP highest?

Correct Answer
verified

According to the circular-flow diagram GDP

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct Answer
verified

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Correct Answer
verified

The purchase of rice produced this period is included in GDP if the rice is

Correct Answer
verified

Unlike national income, personal income

Correct Answer
verified

If an economy's GDP falls, then it must be the case that the economy's

Correct Answer
verified

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Correct Answer
verified
The GDP deflator for 2010 was ...
View Answer

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

Correct Answer
verified

Estimates of the values of which of the following non-market goods or services are included in GDP?

Correct Answer
verified

Expenditures on a nation's domestic production

Correct Answer
verified

Which of the following is included in GDP?

Correct Answer
verified

Exam 15: Measuring a Nations Income

Nominal GDP will definitely increase when

Correct AnswerverifiedShow Answer

Changes in inventory are included in the investment component of GDP.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Correct AnswerverifiedShow Answer

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's real GDP highest?

Correct AnswerverifiedShow Answer

According to the circular-flow diagram GDP

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct AnswerverifiedShow Answer

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Correct AnswerverifiedShow Answer

The purchase of rice produced this period is included in GDP if the rice is

Correct AnswerverifiedShow Answer

Unlike national income, personal income

Correct AnswerverifiedShow Answer

If an economy's GDP falls, then it must be the case that the economy's

Correct AnswerverifiedShow Answer

In 2010 a country had nominal GDP of 6 trillion euro and real GDP of 5 trillion euro. In 2011 it had nominal GDP of 6.5 trillion euro and real GDP of 5.2 trillion euro. What was its inflation rate in 2011? Show your work.

Correct AnswerverifiedThe GDP deflator for 2010 was ...View AnswerShow Answer

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

Estimates of the values of which of the following non-market goods or services are included in GDP?

Correct AnswerverifiedShow Answer

Expenditures on a nation's domestic production

Correct AnswerverifiedShow Answer

Which of the following is included in GDP?

Correct AnswerverifiedShow Answer

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The GDP deflator for 2010 was ...
View Answer

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