Question 1

Siobhan is an Irish citizen who works for Yankee Candles in Massachusetts. Siobhan's work will contribute toward:

Accepted Answer

A)   U.S. GDP, because she's working for a U.S. firm.
B)   U.S. GDP, because she's working in the United States.
C)   Ireland's GDP, because she's an Irish citizen.
D)   both U.S. and Ireland's GDP.E) None of the above
F) A) and B)

Question 2

We can measure total production by:

Accepted Answer

A)   adding up what people spend on final goods and services.
B)   adding up everyone's asset wealth.
C)   comparing the cost of inputs to final sale price.
D)   adding up the value of the intermediate goods used to produce final goods and services.E) C) and D)
F) A) and B)

Question 3

Which of the following topics would most likely be studied in macroeconomics?

Accepted Answer

A)   Consumption at a regional level
B)   Production of most goods in the economy
C)   Prices in one specific market
D)   Investment on a national levelE) None of the above
F) B) and C)

Question 4

Is it possible to have a GDP deflator of less than 100?

Accepted Answer

A)   Yes; this would indicate a year when prices were lower than in the base year.
B)   Yes; this would indicate a year when output was lower than in the base year.
C)   No; it is mathematically impossible for the deflator to be less than 100.
D)   Yes; this would indicate a year when prices were lower than in the previous year.E) None of the above
F) All of the above

Question 5

Which of the following is a consumption good that would be counted in GDP?

Accepted Answer

A)   A new bicycle purchased from Walmart
B)   A vintage bottle of wine purchased at an auction
C)   A washing machine purchased at a garage sale
D)   Newly issued stock purchased onlineE) All of the above
F) A) and C)

Question 6

Which of the following is an example of a negative externality?

Accepted Answer

A)   Loud music from a neighbor's party
B)   Improved water quality from oyster farming
C)   People getting flu shots during flu season
D)   All of these are examples of negative externalities.E) A) and B)
F) C) and D)

Question 7

If the GDP of Macroland is $250,000,000 and the country has a population of 5,000 people, what is the GDP per capita?

Accepted Answer

A)   $1,500
B)   $5,000
C)   $1,250,000
D)   $50,000E) C) and D)
F) B) and D)

Question 8

Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

Accepted Answer

A)   Yes; this would indicate a larger rise in prices relative to a decrease in output
B)   No; because prices are held constant, this would be mathematically impossible
C)   Yes; this would indicate a larger rise in output relative to a decrease in prices
D)   No; because output is held constant, this would be mathematically impossibleE) A) and C)
F) C) and D)

Question 9

Which of the following is not included in the income approach to calculating GDP?

Accepted Answer

A)   Rental income
B)   Interest
C)   Consumption
D)   ProfitsE) A) and B)
F) A) and C)

Question 10

Which of the following is an intermediate good?

Accepted Answer

A)   The rice used to make Chex cereal
B)   A bag of Uncle Ben's rice sold to consumers
C)   A bag of Quaker's rice cakes sold to consumers
D)   All of these are intermediate goods.E) A) and B)
F) C) and D)

Question 11

Anke is a German citizen who works for Volkswagen in Fresno, California. Anke's work contributes to:

Accepted Answer

A)   U.S. GDP, but not U.S. GNP.
B)   U.S. GNP, but not U.S. GDP.
C)   Germany's GDP, but not U.S. GDP.
D)   Germany's GDP and U.S. GNP.E) B) and C)
F) None of the above

Question 12

A bag of coffee made in _______would count toward U.S. GDP.

Accepted Answer

A)   Vermont by Green Mountain Coffee Roasters
B)   Colombia by Dunkin' Donuts
C)   Canada by Starbucks
D)   All of these would count toward U.S. GDPE) A) and C)
F) None of the above

Question 13

If Italy's real GDP fell from $2.2 trillion one year to $1.9 trillion the next year, the annual growth rate would be:

Accepted Answer

A)   −13.6 percent.
B)   −15.8 percent.
C)   −1.36 percent.
D)   -1.58 percent.E) C) and D)
F) B) and C)

Question 14

A recession is characterized by:

Accepted Answer

A)   a period of significant increase in economic activity.
B)   falling GDP.
C)   constant unemployment.
D)   an increase in the overall price level.E) A) and B)
F) A) and C)

Question 15

Nominal GDP captures changes in:

Accepted Answer

A)   the overall price level.
B)   both output and prices.
C)   consumption spending.
D)   output.E) B) and D)
F) None of the above

Question 16

A Chinese restaurant buys 1 pound of rice for $1; soy, fish and oyster sauces for $1 each; and assorted vegetables for $20. They create 10 meals with these ingredients and sell each meal for $5. How much does this process contribute to GDP?

Accepted Answer

A)   $23
B)   $50
C)   $73
D)   $27E) All of the above
F) A) and B)

Question 17

Which of the following is an example of a good or service that would count toward U.S. GNP?

Accepted Answer

A)   A 20 oz. bottle of Diet Coke made by Coca-Cola
B)   A Fiesta automobile produced by Ford Motor Company
C)   A bag of Columbian coffee sold at a Dunkin' Donuts in the United States
D)   All of these would count toward U.S. GNP.E) A) and B)
F) A) and C)

Question 18

Transfer payments are:

Accepted Answer

A)   spending that transfers resources from the government to individuals.
B)   payments that individuals make to the government.
C)   the transfer of stock ownership in lieu of payment with cash or other liquid assets.
D)   the transfer of cash for payments of a good or service.E) C) and D)
F) B) and D)

Question 19

One of the most common uses of GDP is:

Accepted Answer

A)   tracking changes in an economy over time.
B)   determining which country has the fairest distribution of wealth.
C)   determining the most efficient level of taxation.
D)   measuring the amount of money that has been minted by the government.E) B) and C)
F) A) and B)

Question 20

A depression is a:

Accepted Answer

A)   severe and extended period of recession.
B)   recession that lasts more than four quarters.
C)   milder form of recession.
D)   recession combined with an increase in the price level.E) A) and B)
F) C) and D)

Exam 7: Measuringgdp

A bag of coffee made in _______would count toward U.S. GDP.

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Siobhan is an Irish citizen who works for Yankee Candles in Massachusetts. Siobhan's work will contribute toward:

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One of the most common uses of GDP is:

Correct AnswerverifiedShow Answer

Anke is a German citizen who works for Volkswagen in Fresno, California. Anke's work contributes to:

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Nominal GDP captures changes in:

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A Chinese restaurant buys 1 pound of rice for $1; soy, fish and oyster sauces for $1 each; and assorted vegetables for $20. They create 10 meals with these ingredients and sell each meal for $5. How much does this process contribute to GDP?

Correct AnswerverifiedShow Answer

Is it possible to have a GDP deflator of less than 100?

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Transfer payments are:

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Which of the following is a consumption good that would be counted in GDP?

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If the GDP of Macroland is $250,000,000 and the country has a population of 5,000 people, what is the GDP per capita?

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Which of the following is not included in the income approach to calculating GDP?

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We can measure total production by:

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Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

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Which of the following is an intermediate good?

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Which of the following is an example of a good or service that would count toward U.S. GNP?

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A recession is characterized by:

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Which of the following topics would most likely be studied in macroeconomics?

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If Italy's real GDP fell from $2.2 trillion one year to $1.9 trillion the next year, the annual growth rate would be:

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Which of the following is an example of a negative externality?

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A depression is a:

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