Question 1

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Accepted Answer

A)   personal income and personal disposable income.
B)   estimates of GDP and actual GDP.
C)   the income and expenditure approaches to the calculation of GDP.
D)   the quarterly and annual approaches to the calculation of GDP.E) A) and B)
F) None of the above

Question 2

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Accepted Answer

The purchase of foreign equipment is cou...

Question 3

In the economy of Talikastan in 2015, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Talikastan's net exports in 2015?

Accepted Answer

A)   -$250
B)   $250
C)   $2200
D)   Net exports cannot be calculated from the information given.E) B) and D)
F) A) and B)

Question 4

The value of the housing services provided by the economy's owner-occupied houses is

Accepted Answer

A)   included in GDP, and the estimated rental values of the houses are used to place a value on these housing services.
B)   included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services.
C)   excluded from GDP since these services are not sold in any market.
D)   excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.E) A) and D)
F) B) and C)

Question 5

Calculate the inflation rate for a country where the GDP deflator rises from 120 to 165.

Accepted Answer

The answer of Calculate the inflation rate for a country...

Question 6

Define gross domestic product.

Accepted Answer

The market value of all final ...

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) A) and D)
F) All of the above

Question 8

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

Accepted Answer

A)   The market value of an oil change that Ben performs on his own car.
B)   The market value of an oil change at Speedy Lube.
C)   The market value of oil purchased by Ben.
D)   Production of foreign citizens living in the United States that work in an oil packaging facility.E) All of the above
F) C) and D)

Question 9

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Accepted Answer

A)   $1 million
B)   $3 million
C)   $4 million
D)   $5 millionE) All of the above
F) B) and C)

Question 10

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

Question 11

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarters)  doesdo)  these transactions raise consumption?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) B) and C)
F) B) and D)

Question 12

Figure 23-2. 
-Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Accepted Answer

X is markets for fac...

Question 13

Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person?

Accepted Answer

A)   It more than doubled.
B)   It increased, but it less than doubled.
C)   It was unchanged.
D)   It decreased.E) A) and B)
F) B) and C)

Question 14

In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010?

Accepted Answer

A)   the price of the house, the cost of remodeling materials, the increase in rental value
B)   the price of the house and the cost of remodeling materials, but not the increase in rental value
C)   the costs of the remodeling materials and the increase in rent, but not the price of the house
D)   None of the above are correct.E) A) and D)
F) All of the above

Question 15

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 16

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

Accepted Answer

A)   83.33, and this indicates that the price level has decreased by 16.67 percent since the base year.
B)   83.33, and this indicates that the price level has increased by 83.33 percent since the base year.
C)   120, and this indicates that the price level has increased by 20 percent since the base year.
D)   120, and this indicates that the price level has increased by 120 percent since the base year.E) A) and D)
F) B) and C)

Question 17

Real GDP is a better gauge of economic well-being than is nominal GDP.

Accepted Answer

A) True 
 B)False

Question 18

Table 23-1
The table below contains data for Chereaux for the year 2015.
 
-Refer to Table 23-1. Net national product for Chereaux in 2015 is

Accepted Answer

A)   $194.
B)   $196.
C)   $198.
D)   $204.E) C) and D)
F) A) and B)

Question 19

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 20

Income generated by a nation's domestic production

Accepted Answer

A)   is less than its domestic production.
B)   is equal to its domestic production.
C)   is greater than its domestic production.
D)   could be less than, equal to, or greater than its domestic production.E) A) and D)
F) All of the above

Exam 5: Measuring a Nations Income

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

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarters) doesdo) these transactions raise consumption?

Correct AnswerverifiedShow Answer

Figure 23-2. -Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Correct AnswerverifiedX is markets for fac...View AnswerShow Answer

Define gross domestic product.

Correct AnswerverifiedThe market value of all final ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?

Correct AnswerverifiedThe purchase of foreign equipment is cou...View AnswerShow Answer

Which of the following is not included in GDP?

Correct AnswerverifiedShow Answer

Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person?

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In the economy of Talikastan in 2015, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Talikastan's net exports in 2015?

Correct AnswerverifiedShow Answer

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is

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 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Net national product for Chereaux in 2015 is

Correct AnswerverifiedShow Answer

The value of the housing services provided by the economy's owner-occupied houses is

Correct AnswerverifiedShow Answer

In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010?

Correct AnswerverifiedShow Answer

Calculate the inflation rate for a country where the GDP deflator rises from 120 to 165.

Correct AnswerverifiedShow Answer

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Correct AnswerverifiedShow Answer

Income generated by a nation's domestic production

Correct AnswerverifiedShow Answer

Real GDP is a better gauge of economic well-being than is nominal GDP.

Correct AnswerverifiedShow Answer

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X is markets for fac...
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The market value of all final ...
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The purchase of foreign equipment is cou...
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