Question 1

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Accepted Answer

A) True 
 B)False

Question 2

In the actual economy, households

Accepted Answer

A)  spend all of their income.
B)  divide their income among spending, taxes, and saving.
C)  buy all goods and services produced in the economy.
D)  Both (a)  and (c)  are correct.E) All of the above
F) A) and C)

Question 3

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Accepted Answer

A)  -$500
B)  -$700
C)  $700
D)  $500E) C) and D)
F) None of the above

Question 4

​Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Accepted Answer

A)  ​Italy's GDP.
B)  ​Italy's GDP and U.S. GDP, since Beth spent dollars buying the machine.
C)  ​U.S. GDP since she will have the machine with her at home in the U.S.
D)  ​Neither U.S. nor Italy's GDP, since the product was bought in one country and used in another.E) A) and C)
F) B) and C)

Question 5

For an actual economy, total expenditures on goods and services by households does not equal GDP because

Accepted Answer

A)  household spending exceeds their incomes.​
B)  ​household expenditures on goods and services falls short of GDP, since household save for the future.
C)  ​household expenditures include only goods, since services are intangible and cannot be measured accurately.
D)  ​household expenditures on goods and services are made using borrowed funds.E) B) and D)
F) None of the above

Question 6

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A)  Japan, Germany, United States
B)  Japan, United States, Germany
C)  Germany, United States, Japan
D)  United States, Japan, GermanyE) B) and C)
F) A) and C)

Question 7

Table 23-11
Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. 
-Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Accepted Answer

Nominal GD...

Question 8

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

Accepted Answer

A)  income falls and saving rises.
B)  income and saving both fall.
C)  income falls and expenditure rises.
D)  income and expenditure both fall.E) B) and D)
F) All of the above

Question 9

Changes in real GDP reflect

Accepted Answer

A)  only changes in prices.
B)  only changes in the amounts being produced.
C)  both changes in prices and changes in the amounts being produced.
D)  neither changes in prices nor changes in the amounts being produced.E) B) and D)
F) C) and D)

Question 10

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Accepted Answer

A) True 
 B)False

Question 11

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

A)  then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.
B)  then GDP will be higher, but consumption spending will be unchanged.
C)  then GDP will be unchanged, but consumption spending will be higher.
D)  then both GDP and consumption spending will be higher.E) All of the above
F) None of the above

Question 12

GDP per person tells us the income and expenditure of the

Accepted Answer

A)  richest person in the economy.
B)  poorest person in the economy.
C)  average person in the economy.
D)  entire economy.E) B) and D)
F) B) and C)

Question 13

Which of the following represents a transfer payment?

Accepted Answer

A)  You transfer $1,000 from your bank account to a mutual fund.
B)  The government sends your grandfather his Social Security check.
C)  You make a payment to get legal documents showing you purchased a previously owned home.
D)  Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.E) B) and C)
F) All of the above

Question 14

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 15

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Accepted Answer

A)  GDP is not a useful measure of society's welfare.
B)  GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government.
C)  GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.
D)  GDP is still the best measure of society's welfare because these other values cannot actually be measured.E) A) and B)
F) A) and C)

Question 16

Otherwise legal transactions that go unreported or unrecorded are called

Accepted Answer

A)  the underground economy.
B)  the shadow economy.
C)  the informal economy.
D)  All of the above are correct.E) A) and D)
F) B) and C)

Question 17

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

Accepted Answer

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

Question 18

​Suppose that you are planning to buy a new cellphone. Your choice is a new Samsung phone or HTC model. Samsung phones are manufactured in Korea and HTC phones are manufactured in Taiwan. Assuming that the price of each phone is the same, will your purchase of the Samsung or the HTC affect U.S. GDP differently?​

Accepted Answer

A)  ​No, both have the same impact: your purchase will increase consumption expenditures and decrease net exports by the same amount.
B)  ​Yes. This depends upon which cellphone carrier you choose.
C)  ​No, because Samsung's production only affects Korea's GDP; and HTC's production only impacts Taiwan's GDP.
D)  Yes. The country from which a product is imported has different effects on U.S. GDP because it depends upon trade agreements with the countries.E) A) and B)
F) A) and C)

Question 19

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A)  real output and the price level both rose.
B)  real output rose and the price level fell.
C)  real output fell and the price level rose.
D)  real output and the price level both fell.E) B) and C)
F) A) and B)

Question 20

Consumption consists of spending by households on goods and services, with the exception of

Accepted Answer

A)  purchases of intangible services.
B)  purchases of durable goods.
C)  purchases of new houses.
D)  spending on education.E) A) and B)
F) All of the above

Exam 23: Measuring a Nation S Income

Correct Answer
verified

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

Correct Answer
verified

Which of the following represents a transfer payment?

Correct Answer
verified

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct Answer
verified

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

Correct Answer
verified

Otherwise legal transactions that go unreported or unrecorded are called

Correct Answer
verified

In the actual economy, households

Correct Answer
verified

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Correct Answer
verified

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct Answer
verified

Table 23-11 Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Correct Answer
verified
Nominal GD...
View Answer

Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Correct Answer
verified

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Correct Answer
verified

GDP per person tells us the income and expenditure of the

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Correct Answer
verified

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Correct Answer
verified

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct Answer
verified

Changes in real GDP reflect

Correct Answer
verified

Consumption consists of spending by households on goods and services, with the exception of

Correct Answer
verified

If you buy a burger and fries at your favorite fast food restaurant,

Correct Answer
verified

For an actual economy, total expenditures on goods and services by households does not equal GDP because

Correct Answer
verified

Exam 23: Measuring a Nation S Income

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following represents a transfer payment?

Correct AnswerverifiedShow Answer

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Otherwise legal transactions that go unreported or unrecorded are called

Correct AnswerverifiedShow Answer

In the actual economy, households

Correct AnswerverifiedShow Answer

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

Correct AnswerverifiedShow Answer

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct AnswerverifiedShow Answer

Table 23-11 Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

​Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Correct AnswerverifiedShow Answer

The basic tools of supply and demand are central to microeconomic analysis but are of little use to macroeconomics.

Correct AnswerverifiedShow Answer

GDP per person tells us the income and expenditure of the

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Correct AnswerverifiedShow Answer

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest?

Correct AnswerverifiedShow Answer

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of 100 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

Changes in real GDP reflect

Correct AnswerverifiedShow Answer

Consumption consists of spending by households on goods and services, with the exception of

Correct AnswerverifiedShow Answer

If you buy a burger and fries at your favorite fast food restaurant,

Correct AnswerverifiedShow Answer

For an actual economy, total expenditures on goods and services by households does not equal GDP because

Correct AnswerverifiedShow Answer

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Nominal GD...
View Answer

Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home. Her purchase increases

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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