Question 1

A Texas household receives a Social Security check for $500,which it uses to purchase a $460 television made in Korea by a Korean firm and a $40 dinner at a local restaurant.As a result,U.S.GDP

Accepted Answer

A)   does not change.
B)   increases by $40.
C)   increases by $540.
D)   increases by $1000.E) A) and B)
F) A) and C)

Question 2

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Accepted Answer

A) True 
 B)False

Question 3

Whip-It manufactures blenders.In 2009 it had $50,000 of blenders in inventory.In 2010 it sold $300,000 of blenders to consumers and had $40,000 of blenders in inventory.How much did blenders produced by Whip-it add to GDP in 2010?

Accepted Answer

A)   $340,000
B)   $310,000
C)   $300,000
D)   $290,000E) A) and B)
F) C) and D)

Question 4

Which of the following statements about nominal GDP and real GDP is correct?

Accepted Answer

A)   Nominal GDP is a better gauge of economic well-being than real GDP.
B)   Real GDP is a better gauge of economic well-being than nominal GDP.
C)   Real GDP and nominal GDP are equally good measures of economic well-being.
D)   Neither nominal nor real GDP provide a measure of economic well-being.E) A) and B)
F) C) and D)

Question 5

In the economy of Ukzten in 2010,consumption was $4000,exports were $800,GDP was $9500,imports were $200,and investment was $1000.What were Ukzten's government purchases in 2010?

Accepted Answer

A)   $3700
B)   $3900
C)   $5100
D)   $5500E) A) and B)
F) A) and C)

Question 6

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) C) and D)
F) None of the above

Question 7

The basic tools of supply and demand are

Accepted Answer

A)   useful only in the analysis of economic behavior in individual markets.
B)   useful in analyzing the overall economy,but not in analyzing individual markets.
C)   central to microeconomic analysis,but seldom used in macroeconomic analysis.
D)   central to macroeconomic analysis as well as to microeconomic analysis.E) C) and D)
F) None of the above

Question 8

A steel company sells some steel to a bicycle company for $150.The bicycle company uses the steel to produce a bicycle,which it sells for $250.Taken together,these two transactions contribute

Accepted Answer

A)   $150 to GDP.
B)   $250 to GDP.
C)   between $250 and $400 to GDP,depending on the profit earned by the bicycle company when it sold the bicycle.
D)   $400 to GDP.E) B) and C)
F) A) and D)

Question 9

New home construction is included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 10

In the United States in 2009,government purchases of goods and services were

Accepted Answer

A)   larger than consumption,but smaller than investment.
B)   larger than investment,but smaller than consumption.
C)   smaller than both consumption and investment.
D)   larger than both consumption and investment.E) A) and B)
F) A) and D)

Question 11

Real GDP per person tells us the income and expenditure of the average person in the economy.

Accepted Answer

A) True 
 B)False

Question 12

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $12 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Accepted Answer

A)   $3 billion.
B)   $4 billion.
C)   $12 billion.
D)   $48 billion.E) A) and B)
F) All of the above

Question 13

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Accepted Answer

A)   longer life expectancy and a lower percentage of the population that is literate.
B)   longer life expectancy and a higher percentage of the population that is literate.
C)   very nearly the same life expectancy and a lower percentage of the population that is literate.
D)   very nearly the same life expectancy and a higher percentage of the population that is literate.E) A) and B)
F) None of the above

Question 14

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

Accepted Answer

A)   1/2 times as much to GDP as the production of good B.
B)   3/2 times as much to GDP as the production of good B.
C)   3/4 times as much to GDP as the production of good B.
D)   4/3 times as much to GDP as production of good B.E) A) and B)
F) B) and C)

Question 15

In the economy of Ukzten in 2010,consumption was $3000,exports were $400,GDP was $5000,imports were $600,and investment was $1100.What were Ukzten's government purchases in 2010?

Accepted Answer

A)   $300
B)   $500
C)   $700
D)   $1100E) B) and C)
F) A) and D)

Question 16

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 B)
F) All of the above

Question 17

GDP is a good measure of economic well-being for all purposes.

Accepted Answer

A) True 
 B)False

Question 18

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) C) and D)
F) None of the above

Question 19

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

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 15: Measuring a Nations Income

New home construction is included in the consumption component of GDP.

Correct AnswerverifiedShow Answer

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $3000,exports were $400,GDP was $5000,imports were $600,and investment was $1100.What were Ukzten's government purchases in 2010?

Correct AnswerverifiedShow Answer

GDP is a good measure of economic well-being for all purposes.

Correct AnswerverifiedShow Answer

A steel company sells some steel to a bicycle company for $150.The bicycle company uses the steel to produce a bicycle,which it sells for $250.Taken together,these two transactions contribute

Correct AnswerverifiedShow Answer

In the United States in 2009,government purchases of goods and services were

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

A Texas household receives a Social Security check for $500,which it uses to purchase a $460 television made in Korea by a Korean firm and a $40 dinner at a local restaurant.As a result,U.S.GDP

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

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $4000,exports were $800,GDP was $9500,imports were $200,and investment was $1000.What were Ukzten's government purchases in 2010?

Correct AnswerverifiedShow Answer

The government of a country,which has adopted American GDP accounting conventions,reported that seasonally adjusted GDP in quarter 3 was $12 billion at an annual rate.This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Correct AnswerverifiedShow Answer

Which of the following statements about nominal GDP and real GDP is correct?

Correct AnswerverifiedShow Answer

Real GDP per person tells us the income and expenditure of the average person in the economy.

Correct AnswerverifiedShow Answer

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

Correct AnswerverifiedShow Answer

Whip-It manufactures blenders.In 2009 it had $50,000 of blenders in inventory.In 2010 it sold $300,000 of blenders to consumers and had $40,000 of blenders in inventory.How much did blenders produced by Whip-it add to GDP in 2010?

Correct AnswerverifiedShow Answer

Which of the following statements about recessions is true?

Correct AnswerverifiedShow Answer

The basic tools of supply and demand are

Correct AnswerverifiedShow Answer

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