Question 1

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Accepted Answer

A)   remains constant.
B)   doubles.
C)   triples.
D)   quadruples.E) A) and D)
F) A) and C)

Question 2

In the United States in 2012, consumption represented approximately

Accepted Answer

A)   60 percent of GDP.
B)   70 percent of GDP.
C)   80 percent of GDP.
D)   90 percent of GDP.E) B) and D)
F) B) and C)

Question 3

Which of the following is included in GDP?

Accepted Answer

A)   the market value of rental housing services, but not the market value of owner-occupied housing services.
B)   the market value of owner-occupied housing services, but not the market value of rental housing services
C)   both the market value of rental housing services and the market value of owner-occupied housing services
D)   neither the market value of owner-occupied housing services nor the market value of rental housing services.E) A) and C)
F) None of the above

Question 4

In the equation Y = C + I + G + NX,

Accepted Answer

A)   Y represents the economy's total expenditure.
B)   C represents household expenditures on services and durable goods.
C)   all of the variables are always positive numbers.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 5

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) B) and D)

Question 6

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Accepted Answer

GDP is reported ever...

Question 7

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

Question 8

The investment component of GDP refers to financial investment in stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following transactions would be included in GDP for 2015?

Accepted Answer

A)   In February 2015, Amanda sells a 2009 Hyundai to Isabella.
B)   In March 2015, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in February 2016.
C)   In November 2015, Isabella eats onions that she harvested from her backyard garden in October 2015.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 10

Retained earnings is income that

Accepted Answer

A)   households retain after paying taxes.
B)   businesses retain after paying taxes.
C)   corporations have earned but have not used to invest in plant, equipment, and inventories.
D)   corporations have earned but have not paid out to their owners.E) B) and C)
F) A) and B)

Question 11

Expenditures by households on education are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 12

In the GDP accounts production equals

Accepted Answer

A)   income.
B)   income + saving.
C)   income - government expenditures.
D)   income - imports.E) A) and D)
F) None of the above

Question 13

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

Accepted Answer

A) True 
 B)False

Question 14

Write the formula for calculating a country's inflation rate using the GDP deflator.

Accepted Answer

The answer of Write the formula for calculating a country's...

Question 15

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 16

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 B)
F) A) 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

GDP is the market value of all final goods and services produced within a country in a given period of time.

Accepted Answer

A) True 
 B)False

Question 19

In 2012, GDP per person in the United States was almost

Accepted Answer

A)   $14,000.
B)   $36,000.
C)   $46,000
D)   $50,000E) None of the above
F) A) and D)

Question 20

The GDP deflator can be used to take inflation out of nominal GDP.

Accepted Answer

A) True 
 B)False

Exam 5: Measuring a Nations Income

The GDP deflator can be used to take inflation out of nominal GDP.

Correct AnswerverifiedShow Answer

Expenditures by households on education are included in the investment component of GDP.

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Which of the following transactions would be included in GDP for 2015?

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Write the formula for calculating a country's inflation rate using the GDP deflator.

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

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Transfer payments

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How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Correct AnswerverifiedGDP is reported ever...View AnswerShow Answer

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

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The investment component of GDP refers to financial investment in stocks and bonds.

Correct AnswerverifiedShow Answer

GDP is the market value of all final goods and services produced within a country in a given period of time.

Correct AnswerverifiedShow Answer

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Correct AnswerverifiedShow Answer

In the United States in 2012, consumption represented approximately

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

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In the GDP accounts production equals

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Retained earnings is income that

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If nominal GDP doubles and the GDP deflator doubles, then real GDP

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In 2012, GDP per person in the United States was almost

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GDP includes the value of paper clips but does not also count the value of the metal used to make them.

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Which of the following is included in GDP?

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In the equation Y = C + I + G + NX,

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GDP is reported ever...
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