Question 1

Explain how our standard of living depends upon our level of real GDP per person,but there might not be a one-to-one relationship between the standard of living and real GDP per person.Give examples of things that can affect one,but not the other.

Accepted Answer

Although GDP has a significant impact on...

Question 2

Wobet is a small country that produces only steak and potatoes.Steaks have a price of $10 each and potatoes have a price of $1 each.Suppose that Wobet produces 10 steaks and 20 potatoes in 2010.Using ________,Wobet has GDP equal to ________.

Accepted Answer

A)  market value;30 units
B)  a market basket;30 units
C)  market value;$120
D)  real value;$120
E)  a price index;$120F) B) and C)
G) A) and E)

Question 3

How are changes in inventory treated in GDP?

Accepted Answer

Changes in inventory are part of the inv...

Question 4

Consumption goods and services include

Accepted Answer

A)  washing machines and tickets to football games.
B)  new homes and existing homes (as long as improvements have been made to the existing home) .
C)  tickets to concerts and medical care provided to veterans by the government.
D)  new and used textbooks as long as they are sold via stores or online.
E)  vacation time accumulated by workers.F) All of the above
G) B) and E)

Question 5

Nominal GDP measures the value of goods and services produced in a given year valued using

Accepted Answer

A)  constant prices.
B)  prices of the same year.
C)  no prices.
D)  future prices.
E)  base year prices.F) All of the above
G) A) and C)

Question 6

While studying with your friend,your friend states,"Our leisure time increases GDP but lowers our standard of living because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

Accepted Answer

Your friend's assertion is incorrect on ...

Question 7

Once the categories of income are totaled,the sum is called

Accepted Answer

A)  "GDP measured by the income approach."
B)  "net domestic product at factor cost" and is not equal to GDP.
C)  "net domestic product at factor cost" and is equal to GDP.
D)  "total income earned" and is equal to GDP.
E)  GNP and is not equal to GDP.F) C) and E)
G) A) and B)

Question 8

Which of the following is NOT included in measured U.S.GDP?

Accepted Answer

A)  the value of the pizzas produced at Pizza Hut in Kansas City
B)  the value of leisure time
C)  the value of the goods produced at a French owned plant in Atlanta,Georgia
D)  the value of the services produced by a lawyer in Tampa,Florida
E)  the value of a plane produced by Boeing in Washington and sold to Air FranceF) B) and C)
G) B) and D)

Question 9

During the business cycle,

Accepted Answer

A)  real GDP fluctuates around nominal GDP.
B)  nominal GDP fluctuates around real GDP.
C)  real GDP fluctuates around its trend.
D)  trend GDP fluctuates around real GDP.
E)  real GDP falls after the trough.F) A) and B)
G) A) and C)

Question 10

What are the categories of expenditure used in the expenditure approach to measuring GDP?

Accepted Answer

There are four expenditure categories.Th...

Question 11

Government expenditures on goods and services include
I.the New York City Library's purchase of new books.
Ii.Washington D.C.'s purchase of gas for its city buses.
Iii.California's payment of wages to prison guards.

Accepted Answer

A)  i and ii
B)  i and iii
C)  ii and iii
D)  i,ii and iii
E)  i onlyF) B) and D)
G) B) and C)

Question 12

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

Accepted Answer

Several adjustments must be made to net ...

Question 13

In 2009 in the United States,net domestic product at factor cost was $11,091 billion.Additionally,rent was $2,000 billion,profits were $1,000 billion,and interest was $358 billion.Hence wages were

Accepted Answer

A)  $7,733 billion.
B)  $9,091 billion.
C)  $10,091 billion.
D)  $8,091 billion.
E)  $12,091 billion.F) B) and E)
G) All of the above

Question 14

Which of the following is NOT included in the expenditure approach to calculating GDP?

Accepted Answer

A)  government expenditures on goods and services
B)  investment
C)  net exports of goods and services
D)  wages
E)  consumption expenditureF) A) and B)
G) C) and D)

Question 15

U.S.real GDP

Accepted Answer

A)  precisely measures the improving standard of living in the United States.
B)  measures the change in the price level over time.
C)  excludes the value of underground production and leisure time.
D)  is not as accurate as nominal GDP when measuring standard of living changes over time.
E)  includes the value of underground production but excludes the value of leisure time.F) A) and D)
G) A) and E)

Question 16

The total production within an economy is measured as

Accepted Answer

A)  Gross Home Product.
B)  Total Domestic Output.
C)  Annual Production Value.
D)  Gross Domestic Product.
E)  Total Annual Output.F) A) and B)
G) A) and D)

Question 17

When calculating real GDP,the reference base year

Accepted Answer

A)  allows us to account for changes in GNP compared to GDP.
B)  always reduces the value of GDP compared to GNP.
C)  allows us to calculate the value of the goods and services in terms of prices of that base year.
D)  usually increases the value of GNP compared to GDP.
E)  allows us to increase the value of goods and services.F) B) and E)
G) A) and B)

Question 18

The measurement of GDP handles underground production by

Accepted Answer

A)  including the amount produced in this sector of the economy in exactly the same way that all other production is included.
B)  omitting it because underground production is unreported to the government by the people involved.
C)  adding it at fixed prices that change only infrequently.
D)  adding an estimate of it because it is difficult to precisely measure underground production.
E)  omitting it because,being illegal,it has no effect on the nation's total production.F) C) and D)
G) A) and B)

Question 19

Which of the following is a final good or service?

Accepted Answer

A)  the grilled chicken purchased by Taco Bell for use in their burritos
B)  a new replacement muffler installed by Midas Mufflers
C)  the fertilizer purchased by Royal Lawn and Landscape
D)  the computers purchased by Office Depot for sale to its customers
E)  the CPUs purchased by Dell to be used in their computersF) A) and D)
G) B) and E)

Question 20

Which of the following is NOT included in the income approach to calculating GDP?

Accepted Answer

A)  interest
B)  wages
C)  net exports of goods and services
D)  profits
E)  rentF) A) and B)
G) None of the above

Exam 14: Gdp: a Measure of Total Production and Income

The total production within an economy is measured as

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Nominal GDP measures the value of goods and services produced in a given year valued using

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During the business cycle,

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Once the categories of income are totaled,the sum is called

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Wobet is a small country that produces only steak and potatoes.Steaks have a price of $10 each and potatoes have a price of $1 each.Suppose that Wobet produces 10 steaks and 20 potatoes in 2010.Using ________,Wobet has GDP equal to ________.

Correct AnswerverifiedShow Answer

Explain how our standard of living depends upon our level of real GDP per person,but there might not be a one-to-one relationship between the standard of living and real GDP per person.Give examples of things that can affect one,but not the other.

Correct AnswerverifiedAlthough GDP has a significant impact on...View AnswerShow Answer

In 2009 in the United States,net domestic product at factor cost was $11,091 billion.Additionally,rent was $2,000 billion,profits were $1,000 billion,and interest was $358 billion.Hence wages were

Correct AnswerverifiedShow Answer

Which of the following is NOT included in the expenditure approach to calculating GDP?

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How are changes in inventory treated in GDP?

Correct AnswerverifiedChanges in inventory are part of the inv...View AnswerShow Answer

When calculating real GDP,the reference base year

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The measurement of GDP handles underground production by

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U.S.real GDP

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Which of the following is NOT included in the income approach to calculating GDP?

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Which of the following is NOT included in measured U.S.GDP?

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What are the categories of expenditure used in the expenditure approach to measuring GDP?

Correct AnswerverifiedThere are four expenditure categories.Th...View AnswerShow Answer

Which of the following is a final good or service?

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While studying with your friend,your friend states,"Our leisure time increases GDP but lowers our standard of living because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

Correct AnswerverifiedYour friend's assertion is incorrect on ...View AnswerShow Answer

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

Correct AnswerverifiedSeveral adjustments must be made to net ...View AnswerShow Answer

Government expenditures on goods and services include I.the New York City Library's purchase of new books. Ii.Washington D.C.'s purchase of gas for its city buses. Iii.California's payment of wages to prison guards.

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Consumption goods and services include

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Wobet is a small country that produces only steak and potatoes.Steaks have a price of $10 each and potatoes have a price of $1 each.Suppose that Wobet produces 10 steaks and 20 potatoes in 2010.Using ,Wobet has GDP equal to .

Correct Answer
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Correct Answer
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Although GDP has a significant impact on...
View Answer

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Correct Answer
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Correct Answer
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Changes in inventory are part of the inv...
View Answer

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Correct Answer
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Correct Answer
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There are four expenditure categories.Th...
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Your friend's assertion is incorrect on ...
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Several adjustments must be made to net ...
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Correct Answer
verified

Correct Answer
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