Question 1

U.S.GDP and U.S.GNP are related as follows:

Accepted Answer

A)   GNP = GDP + Value of exported goods - Value of imported goods.
B)   GNP = GDP - Value of exported goods + Value of imported goods.
C)   GNP = GDP + Income earned by foreigners in the U.S.- Income earned by U.S.citizens abroad.
D)   GNP = GDP - Income earned by foreigners in the U.S.+ Income earned by U.S.citizens abroad.E) A) and D)
F) B) and C)

Question 2

GDP does not directly measure those things that make life worthwhile,but it does measure our ability to obtain many of the inputs into a worthwhile life.

Accepted Answer

A) True 
 B)False

Question 3

A U.S.grocery chain purchases olive oil from Tunisia and sells it to U.S.consumers.In which of the following is this transaction included?

Accepted Answer

A)   U.S.consumption and U.S.imports
B)   U.S.consumption but not U.S.imports
C)   U.S.imports but not U.S.consumption
D)   neither U.S.consumption nor U.S.importsE) C) and D)
F) B) and C)

Question 4

GDP does not make adjustments for leisure time,environmental quality,or volunteer work.

Accepted Answer

A) True 
 B)False

Question 5

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Accepted Answer

A)   U.S.investment and GDP increase,but German GDP is unaffected.
B)   U.S.investment and German GDP increase,but U.S.GDP is unaffected.
C)   U.S.investment,U.S.GDP,and German GDP are unaffected because tractors are intermediate goods.
D)   U.S.investment,U.S.GDP,and German GDP all increase.E) B) and C)
F) C) and D)

Question 6

Spots,Inc.produces ink and sells it to Write on Target,which makes pens.The ink produced by Spots,Inc.is called

Accepted Answer

A)   an inventory good.
B)   a transitory good.
C)   a final good.
D)   an intermediate good.E) A) and B)
F) A) and C)

Question 7

Table 10-4
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 10-4.In 2008,this country's

Accepted Answer

A)   nominal GDP was greater than real GDP,and the GDP deflator was greater than 100.
B)   nominal GDP was equal to real GDP,and the GDP deflator was equal to 1.
C)   nominal GDP was less than real GDP,and the GDP deflator was less than 100.
D)   nominal GDP was equal to real GDP,and the GDP deflator was equal to 100.E) None of the above
F) All of the above

Question 8

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) A) and B)
F) B) and D)

Question 9

In the economy of Ukzten in 2010,consumption was $500,exports were $200,GDP was $1200,government purchases were $250,and investment was $300.What were Ukzten's imports in 2010?

Accepted Answer

A)   -$150
B)   -$50
C)   $50
D)   $150E) A) and D)
F) B) and C)

Question 10

GDP is not a perfect measure of well-being;for example,

Accepted Answer

A)   GDP excludes the value of volunteer work.
B)   GDP does not address the distribution of income.
C)   GDP does not address environmental quality.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 11

Table 10-5
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 2009.
Prices and Quantities
 
-Refer to Table 10-5 In which year was this country's nominal GDP highest?

Accepted Answer

A)   2008
B)   2009
C)   2010
D)   2011E) A) and C)
F) None of the above

Question 12

Recently,the U.S.national income accounts have switched to calling government purchases

Accepted Answer

A)   government spending and transfer payments.
B)   transfer payments and gross investment by government.
C)   government consumption expenditure and gross investment.
D)   government wages,salaries,and investment expenditure.E) A) and D)
F) A) and C)

Question 13

Define GDP.Remember to be specific about what it includes.

Accepted Answer

GDP is the market value of all...

Question 14

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180,then the inflation rate in 2010 was 12.5%.

Accepted Answer

A) True 
 B)False

Question 15

If real GDP and the GDP deflator both rise,then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 16

A painter pays $500 for paint he uses to repaint a house.He then presents a bill for $1200 that covers his time and expenses to the homeowner.How much do these transactions add to GDP?

Accepted Answer

A)   $500
B)   $700
C)   $1200
D)   $1700E) C) and D)
F) None of the above

Question 17

If real GDP is 5,100 and nominal GDP is 4,900,then the GDP deflator is

Accepted Answer

A)   104.1 so prices are higher than in the base year.
B)   104.1 so prices are lower than in the base year.
C)   96.1 so prices are higher than in the base year.
D)   96.1 so prices are lower than in the base year.E) C) and D)
F) None of the above

Question 18

Transfer payments

Accepted Answer

A)   are payments that flow from government to households.
B)   are not made in exchange for currently produced goods or services.
C)   alter household income,but they do not reflect the economy's production.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 19

U.S.GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)   the value of unpaid housework
B)   the value of services provided by major household appliances purchased in a previous period
C)   the estimated rental value of owner-occupied homes
D)   All of the above are included in GDP.E) C) and D)
F) A) and D)

Exam 23: Measuring a Nations Income

Table 10-4 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 10-4.In 2008,this country's

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $500,exports were $200,GDP was $1200,government purchases were $250,and investment was $300.What were Ukzten's imports in 2010?

Correct AnswerverifiedShow Answer

U.S.GDP excludes the production of most illegal goods.

Correct AnswerverifiedShow Answer

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 10-5 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 2009. Prices and Quantities -Refer to Table 10-5 In which year was this country's nominal GDP highest?

Correct AnswerverifiedShow Answer

In the actual economy,households

Correct AnswerverifiedShow Answer

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180,then the inflation rate in 2010 was 12.5%.

Correct AnswerverifiedShow Answer

Transfer payments

Correct AnswerverifiedShow Answer

GDP does not make adjustments for leisure time,environmental quality,or volunteer work.

Correct AnswerverifiedShow Answer

A U.S.grocery chain purchases olive oil from Tunisia and sells it to U.S.consumers.In which of the following is this transaction included?

Correct AnswerverifiedShow Answer

Spots,Inc.produces ink and sells it to Write on Target,which makes pens.The ink produced by Spots,Inc.is called

Correct AnswerverifiedShow Answer

A painter pays $500 for paint he uses to repaint a house.He then presents a bill for $1200 that covers his time and expenses to the homeowner.How much do these transactions add to GDP?

Correct AnswerverifiedShow Answer

GDP does not directly measure those things that make life worthwhile,but it does measure our ability to obtain many of the inputs into a worthwhile life.

Correct AnswerverifiedShow Answer

If real GDP and the GDP deflator both rise,then it must be that nominal GDP rose.

Correct AnswerverifiedShow Answer

Recently,the U.S.national income accounts have switched to calling government purchases

Correct AnswerverifiedShow Answer

GDP is not a perfect measure of well-being;for example,

Correct AnswerverifiedShow Answer

U.S.GDP and U.S.GNP are related as follows:

Correct AnswerverifiedShow Answer

If real GDP is 5,100 and nominal GDP is 4,900,then the GDP deflator is

Correct AnswerverifiedShow Answer

Define GDP.Remember to be specific about what it includes.

Correct AnswerverifiedGDP is the market value of all...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
GDP is the market value of all...
View Answer