Question 1

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Accepted Answer

A) True 
 B)False

Question 2

Table 5-4
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.
Prices and Quantities
 
-Refer to Table 5-4. This country's output grew

Accepted Answer

A)   29.9% from 2008 to 2009.
B)   33.3% from 2009 to 2010.
C)   24.3% from 2009 to 2010.
D)   15.4% from 2010 to 2011.E) B) and C)
F) A) and D)

Question 3

Which of the following values would be included in U.S. GDP for 2009?

Accepted Answer

A)   the rent that Sean, an American citizen, would have paid on his home in New York in 2009 had he not owned that home
B)   the rent that John, an American citizen, paid on his apartment in San Francisco in 2009
C)   the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in Houston and practiced law there in 2009
D)   All of the above would be included in U.S. GDP for 2009.E) All of the above
F) A) and D)

Question 4

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Accepted Answer

A)   U.S. GDP and Bermudan GDP.
B)   U.S. GDP and Bermudan GNP.
C)   U.S. GNP and Bermudan GDP.
D)   U.S. GNP and Bermudan GNP.E) C) and D)
F) A) and D)

Question 5

In the United States in 2009, government purchases of goods and services were

Accepted Answer

A)   larger than consumption, but smaller than investment.
B)   larger than investment, but smaller than consumption.
C)   smaller than both consumption and investment.
D)   larger than both consumption and investment.E) C) and D)
F) All of the above

Question 6

Which of the following is not included in GDP?

Accepted Answer

A)   a can of bug spray
B)   the services of an exterminator
C)   the honey produced and sold by a beekeeper
D)   All of the above are included in GDP.E) C) and D)
F) A) and B)

Question 7

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Accepted Answer

A)   not included in the current quarter GDP.
B)   included in the current quarter GDP as investment.
C)   included in the current quarter GDP as consumption.
D)   included in the current quarter GDP as a statistical discrepancy.E) None of the above
F) C) and D)

Question 8

Consider the following three items of spending by the government: (i)  the federal government pays a $500 unemployment benefit to an unemployed person; (ii)  the federal government makes a $2,000 salary payment to a Navy lieutenant; (iii)  the city of Bozeman, Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman. Which of these payments contributes directly to government purchases in the national income accounts?

Accepted Answer

A)   only item (i) 
B)   only item (ii) 
C)   only items (i)  and (ii) 
D)   only items (ii)  and (iii) E) A) and D)
F) None of the above

Question 9

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes

Accepted Answer

A)   1/2 times as much to GDP as the production of good B.
B)   3/2 times as much to GDP as the production of good B.
C)   3/4 times as much to GDP as the production of good B.
D)   4/3 times as much to GDP as production of good B.E) C) and D)
F) A) and B)

Question 11

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Accepted Answer

A)   Bolivia, Thailand, United States, Sweden.
B)   Thailand, United States, Sweden, Bolivia.
C)   United States, Bolivia, Sweden, Thailand.
D)   Bolivia, Thailand, Sweden, United States.E) A) and C)
F) C) and D)

Question 12

U.S. GDP was almost $14 billion in 2009.

Accepted Answer

A) True 
 B)False

Question 13

Table 5-7
The table below contains data for the country of Togogo. The base year is 1974.
 
-Refer to Table 5-7. From 1975 to 1976,

Accepted Answer

A)   inflation was 25% and output did not grow.
B)   inflation was 25% and output grew.
C)   inflation was 50% and output did not grow.
D)   inflation was 50% and output grew.E) A) and B)
F) A) and C)

Question 14

Table 5-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.
 
-Refer to Table 5-3. What was the growth rate of real GDP for 1930?

Accepted Answer

A)   -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
B)   -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP.
C)   -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP.
D)   -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.E) B) and D)
F) None of the above

Question 15

Table 5-2
The table below contains data for the country of Crete for the year 2010.
 
-Refer to Table 5-2. What were Crete's government purchases in 2010?

Accepted Answer

A)   $1130
B)   $1601
C)   $1837
D)   $2544E) None of the above
F) A) and C)

Question 16

Table 5-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 5-1. What were country A's government purchases in 2010?

Accepted Answer

A)   $553
B)   $1198
C)   $1975
D)   $2752E) B) and C)
F) A) and B)

Question 17

A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?

Accepted Answer

A)   Since the DVDs eventually will be bought by consumers, they will be included as consumption in the second quarter.
B)   Since the DVDs were not purchased in the second quarter, they will be counted as an increase in third-quarter GDP.
C)   The DVDs will be counted as a change in inventory in the second quarter and so will be included in second-quarter GDP.
D)   The DVDs will be counted as a change in inventory in the second quarter, and when sold in the third quarter will raise third-quarter GDP.E) A) and B)
F) All of the above

Question 18

Real GDP is the yearly production of final goods and services valued at

Accepted Answer

A)   current prices.
B)   constant prices.
C)   expected future prices.
D)   the ratio of current prices to constant prices.E) None of the above
F) B) and D)

Question 19

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

Accepted Answer

A) True 
 B)False

Question 20

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP ?

Accepted Answer

A)   $2.5 billion
B)   $10 billion
C)   $40 billion
D)   $100 billionE) A) and B)
F) B) and D)

Exam 5: Measuring a Nations Income

Which of the following values would be included in U.S. GDP for 2009?

Correct Answer
verified

Real GDP is the yearly production of final goods and services valued at

Correct Answer
verified

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP ?

Correct Answer
verified

Table 5-4 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities -Refer to Table 5-4. This country's output grew

Correct Answer
verified

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes

Correct Answer
verified

U.S. GDP was almost $14 billion in 2009.

Correct Answer
verified

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. From 1975 to 1976,

Correct Answer
verified

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Correct Answer
verified

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Correct Answer
verified

Which of the following is not included in GDP?

Correct Answer
verified

Table 5-2 The table below contains data for the country of Crete for the year 2010. -Refer to Table 5-2. What were Crete's government purchases in 2010?

Correct Answer
verified

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Correct Answer
verified

A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?

Correct Answer
verified

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Correct Answer
verified

In the United States in 2009, government purchases of goods and services were

Correct Answer
verified

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Correct Answer
verified

Table 5-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 5-3. What was the growth rate of real GDP for 1930?

Correct Answer
verified

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

Correct Answer
verified

Correct Answer
verified

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What were country A's government purchases in 2010?

Correct Answer
verified

Exam 5: Measuring a Nations Income

Which of the following values would be included in U.S. GDP for 2009?

Correct AnswerverifiedShow Answer

Real GDP is the yearly production of final goods and services valued at

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP ?

Correct AnswerverifiedShow Answer

Table 5-4 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities -Refer to Table 5-4. This country's output grew

Correct AnswerverifiedShow Answer

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes

Correct AnswerverifiedShow Answer

U.S. GDP was almost $14 billion in 2009.

Correct AnswerverifiedShow Answer

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. From 1975 to 1976,

Correct AnswerverifiedShow Answer

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Correct AnswerverifiedShow Answer

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

Correct AnswerverifiedShow Answer

Which of the following is not included in GDP?

Correct AnswerverifiedShow Answer

Table 5-2 The table below contains data for the country of Crete for the year 2010. -Refer to Table 5-2. What were Crete's government purchases in 2010?

Correct AnswerverifiedShow Answer

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Correct AnswerverifiedShow Answer

A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?

Correct AnswerverifiedShow Answer

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Correct AnswerverifiedShow Answer

In the United States in 2009, government purchases of goods and services were

Correct AnswerverifiedShow Answer

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Correct AnswerverifiedShow Answer

Table 5-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 5-3. What was the growth rate of real GDP for 1930?

Correct AnswerverifiedShow Answer

In 2009, the level of U.S. real GDP was close to four times its 1965 level.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What were country A's government purchases in 2010?

Correct AnswerverifiedShow Answer

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