Question 1

During the third quarter of this year a firm produces consumer goods and adds some of those goods to its inventory. During the fourth quarter of this year, the firm sells the goods at a retail outlet, with the result that the value of its inventory at the end of the fourth quarter is smaller than the value of its inventory at the end of the third quarter. These actions affect which component(s)  of fourth-quarter GDP?

Accepted Answer

A)   they increase consumption and have no affect on investment
B)   they increase consumption and decrease investment
C)   they have no affect on either consumption or investment
D)   they have no affect on consumption and decrease investmentE) A) and B)
F) A) and C)

Question 2

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 net exports in 2010?

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) B) and C)
F) A) and C)

Question 3

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

Accepted Answer

A)   GDP incorporates a large number of non-market goods and services that are of little value to society.
B)   GDP places too much emphasis on the value of leisure.
C)   GDP fails to account for the quality of the environment.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 4

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 5

If the price of a Blu-Ray Disc player is three times the price of an MP3 player, then a Blue-Ray Disc player contributes

Accepted Answer

A)   more than three times as much to GDP as does a MP3 player.
B)   less than three times as much to GDP as does a MP3 player.
C)   exactly three times as much to GDP as does a MP3 player.
D)   None of the above is necessarily correct.E) All of the above
F) C) and D)

Question 6

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) All of the above
F) None of the above

Question 7

Table 5-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 5-1. Net national product for Bahkan in 2010 is

Accepted Answer

A)   $96
B)   $104
C)   $106
D)   $116E) A) and B)
F) C) and D)

Question 8

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) C) and D)
F) B) and D)

Question 9

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)   U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100.
B)   U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100.
C)   U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.
D)   U.S. consumption increases by $100, U.S. net exports do not change, and U.S. GDP increases by $100.E) A) and B)
F) A) and C)

Question 10

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 percent. What happened to 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) B) and C)
F) All of the above

Question 11

If nominal GDP is $10 trillion and real GDP is $12 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) B) and D)
F) None of the above

Question 12

GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is

Accepted Answer

A)   saving per person.
B)   GDP per person.
C)   government expenditures per person.
D)   investment per business firm.E) None of the above
F) A) and B)

Question 13

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

Question 14

Which of the following items is included in GDP?

Accepted Answer

A)   the sale of stocks and bonds
B)   the sale of used goods
C)   the sale of services such as those performed by a doctor
D)   All of the above are included in GDP.E) A) and B)
F) None of the above

Question 15

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Accepted Answer

A) True 
 B)False

Question 16

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. In 2010, this country's

Accepted Answer

A)   real GDP was $780, and the GDP deflator was 141.0.
B)   real GDP was $825, and the GDP deflator was 133.3.
C)   real GDP was $780, and the GDP deflator was 133.3
D)   real GDP was $825, and the GDP deflator was 141.0E) None of the above
F) B) and D)

Question 17

Tom and Lilly rented a house for $12,000 last year. At the start of the year they bought the house they had been renting directly from the owner for $250,000. They believe they could rent it for $12,000 this year, but stay in the house. How much does Tom and Lilly's decision to buy the house change GDP?

Accepted Answer

A)   it reduces GDP by $12,000
B)   it does not change GDP
C)   it raises GDP by $238,000
D)   it raises GDP by $250,000E) All of the above
F) B) and C)

Question 18

In the economy of Ukzten in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP in 2010?

Accepted Answer

A)   $1750
B)   $1850
C)   $1900
D)   $2050E) None of the above
F) A) and B)

Question 19

In the economy of Ukzten in 2010, consumption was $2000, exports were $800, GDP was $4800, government purchases were $840, and investment was $1400. What were Ukzten's imports in 2010?

Accepted Answer

A)   -$560
B)   -$240
C)   $240
D)   $560E) None of the above
F) C) and D)

Question 20

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Accepted Answer

A) True 
 B)False

Exam 5: Measuring a Nations Income

Correct Answer
verified

In the economy of Ukzten in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP in 2010?

Correct Answer
verified

When an American household purchases a bottle of Italian wine for $100,

Correct Answer
verified

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 percent. What happened to real GDP per person?

Correct Answer
verified

If the price of a Blu-Ray Disc player is three times the price of an MP3 player, then a Blue-Ray Disc player contributes

Correct Answer
verified

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Net national product for Bahkan in 2010 is

Correct Answer
verified

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

Correct Answer
verified

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

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 net exports in 2010?

Correct Answer
verified

GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is

Correct Answer
verified

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Correct Answer
verified

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

Correct Answer
verified

Which of the following items is included in GDP?

Correct Answer
verified

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct Answer
verified

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Correct Answer
verified

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

Correct Answer
verified

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

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. In 2010, this country's

Correct Answer
verified

Correct Answer
verified

In the economy of Ukzten in 2010, consumption was $2000, exports were $800, GDP was $4800, government purchases were $840, and investment was $1400. What were Ukzten's imports in 2010?

Correct Answer
verified

Exam 5: Measuring a Nations Income

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP in 2010?

Correct AnswerverifiedShow Answer

When an American household purchases a bottle of Italian wine for $100,

Correct AnswerverifiedShow Answer

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 percent. What happened to real GDP per person?

Correct AnswerverifiedShow Answer

If the price of a Blu-Ray Disc player is three times the price of an MP3 player, then a Blue-Ray Disc player contributes

Correct AnswerverifiedShow Answer

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Net national product for Bahkan in 2010 is

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

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 net exports in 2010?

Correct AnswerverifiedShow Answer

GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is

Correct AnswerverifiedShow Answer

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following items is included in GDP?

Correct AnswerverifiedShow Answer

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct AnswerverifiedShow Answer

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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. In 2010, this country's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010, consumption was $2000, exports were $800, GDP was $4800, government purchases were $840, and investment was $1400. What were Ukzten's imports in 2010?

Correct AnswerverifiedShow Answer

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