Question 1

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Accepted Answer

A)   nominal GDP is $400, real GDP is $500, and the GDP deflator is 80.
B)   nominal GDP is $400, real GDP is $500, and the GDP deflator is 125.
C)   nominal GDP is $500, real GDP is $400, and the GDP deflator is 80.
D)   nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.E) C) and D)
F) A) and B)

Question 2

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)   consumption, since the goods will be sold to consumers in another period.
B)   intermediate goods, and so is not included in that year's GDP.
C)   investment, since GDP aims to measure the value of the economy's production that year.
D)   spending on durable goods, since the goods could not be inventoried unless they were durable.E) None of the above
F) B) and C)

Question 3

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not correct?

Accepted Answer

A)   GNP equals net national product plus losses from depreciation.
B)   For most countries, including the United States, GDP and GNP are nearly the same.
C)   GDP and GNP typically move in opposite directions.
D)   Personal income equals disposable personal income plus personal taxes plus certain nontax payments.E) A) and B)
F) B) and D)

Question 5

Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year.
 
-Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Accepted Answer

Nominal GD...

Question 6

How is net national product NNP)  calculated?

Accepted Answer

A)   Saving is added to the total income of a nation's citizens.
B)   Saving is added to the total income earned within a nation.
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are subtracted from the total income earned within a nation.E) None of the above
F) All of the above

Question 7

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 8

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 9

On the basis of the information presented in the table below, which presents the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A)   Atlantis, Merpois, Bensalem
B)   Bensalem, Atlantis, Merpois
C)   Atlantis, Bensalem, Merpois
D)   Bensalem, Merpois, AtlantisE) All of the above
F) A) and C)

Question 10

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

Accepted Answer

A)   GDP increases by $3.00.
B)   GDP increases by $5.00.
C)   GDP increases by $6.00.
D)   GDP increases by $7.00.E) A) and B)
F) All of the above

Question 11

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   spending to build new houses
B)   spending to build new factories
C)   spending on business equipment such as welding equipment
D)   All of the above are included in the investment component of GDP.E) A) and D)
F) A) and C)

Question 12

Which of the following examples of production of goods and services would be included in U.S. GDP?

Accepted Answer

A)   Sally, a Canadian citizen, works on a drilling crew in North Dakota for Northland Gas Services, and Northland sells the natural gas to a utility company in Canada.
B)   Jim grows pecans for his family in the yard of their San Antonio home.
C)   Joe grows marijuana in his Kansas City home and sells it to his friends and neighbors.
D)   None of the above examples of production would be included in U.S. GDP.E) None of the above
F) A) and B)

Question 13

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 14

For monitoring fluctuations in the national economy, which measure of income is best?

Accepted Answer

A)   GDP
B)   GNP
C)   NNP
D)   It does not matter very much which measure we use.E) A) and D)
F) C) and D)

Question 15

Jackie, a Canadian citizen, works only in the United States. The value of the output she produces is

Accepted Answer

A)   included in both U.S. GDP and U.S. GNP.
B)   included in U.S. GDP, but it is not included in U.S. GNP.
C)   included in U.S. GNP, but it is not included in U.S. GDP.
D)   included in neither U.S. GDP nor U.S. GNP.E) A) and B)
F) None of the above

Question 16

Table 23-3
The table below contains data for the country of Crete for the year 2010.
 
-Refer to Table 23-3. What were Crete's net exports in 2010?

Accepted Answer

A)   -$217
B)   -$88
C)   $88
D)   $217E) None of the above
F) A) and D)

Question 17

GDP does not reflect

Accepted Answer

A)   the value of leisure.
B)   the value of goods and services produced at home.
C)   the quality of the environment.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 18

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Accepted Answer

A)   both Mexican GDP and U.S. GDP.
B)   Mexican GDP, but it is not included in U.S. GDP.
C)   U.S. GDP, but it is not included in Mexican GDP.
D)   neither Mexican GDP nor U.S. GDP.E) All of the above
F) None of the above

Question 19

Which of the following statements about recessions is true?

Accepted Answer

A)   An old rule of thumb defining recession is two consecutive quarters of falling nominal GDP.
B)   Recessions occur at regular intervals and last standard amounts of time.
C)   There is no ironclad rule for the declaration of recessions.
D)   Recessions are associated with low unemployment and high income.E) A) and B)
F) None of the above

Question 20

Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?

Accepted Answer

A)   Unemployment rate falls from 7.5 percent to 7.3 percent.
B)   Real GDP falls by 0.4 percent in the third quarter.
C)   Inflation was 2.4 percent last year.
D)   The price of gasoline rises due to rising oil prices.E) All of the above
F) B) and D)

Exam 15: Measuring a Nations Income

Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?

Correct AnswerverifiedShow Answer

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

Correct AnswerverifiedShow Answer

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Correct AnswerverifiedShow Answer

On the basis of the information presented in the table below, which presents the correct ordering of real GDP per person from highest to lowest?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

How is net national product NNP) calculated?

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's net exports in 2010?

Correct AnswerverifiedShow Answer

Which of the following statements about recessions is true?

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

The value of goods added to a firm's inventory in a certain year is treated as

Correct AnswerverifiedShow Answer

Which of the following examples of production of goods and services would be included in U.S. GDP?

Correct AnswerverifiedShow Answer

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate real and nominal GDP for the year 2013.

Correct AnswerverifiedNominal GD...View AnswerShow Answer

GDP does not reflect

Correct AnswerverifiedShow Answer

For monitoring fluctuations in the national economy, which measure of income is best?

Correct AnswerverifiedShow Answer

Jackie, a Canadian citizen, works only in the United States. The value of the output she produces is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Correct AnswerverifiedShow Answer

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Correct AnswerverifiedShow 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
Nominal GD...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified