Question 1

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Accepted Answer

A) True 
 B)False

Question 2

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 3

Sam,an American citizen,prepares meals for his family at home.Ellen,a Canadian citizen,commutes to the U.S.to help prepare meals at a restaurant in Idaho.Whose value of services preparing meals is included in U.S.GDP?

Accepted Answer

A)   Sam's and Ellen's.
B)   Sam's but not Ellen's.
C)   Ellen's but not Sam's.
D)   Nether Sam's nor Ellen's.E) None of the above
F) B) and C)

Question 4

Much of macroeconomics attempts to explain

Accepted Answer

A)   changes in the price of oil and gasoline.
B)   long-run growth and short-run fluctuations in real GDP.
C)   changes in the growth rate of state government spending.
D)   changes in the prices and quantities of individual goods and services.E) A) and C)
F) All of the above

Question 5

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s) is (are) GDP higher?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) A) and B)
F) A) and C)

Question 6

The Patersons bought a home that was newly constructed in 2007 for $275,000.They sold the home in 2009 for $205,000.Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)   The 2009 sale increased 2009 GDP by $205,000 and had no effect on 2007 GDP.
B)   The 2009 sale reduced 2009 GDP by $70,000 and had no effect on 2007 GDP.
C)   The 2009 sale increased 2009 GDP by $205,000;and caused 2007 GDP to be revised downward by $70,000.
D)   The 2009 sale affected neither 2007 GDP nor 2009 GDP.E) A) and B)
F) B) and D)

Question 7

Table 23-1
The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009.
Prices and Quantities
 
-Refer to Table 23-1.
What was nominal GDP,real GDP,and the GDP deflator for 2008?

Accepted Answer

Nominal GDP was $4x100 + $50X1...

Question 8

An identity is an equation that

Accepted Answer

A)   describes an equilibrium.
B)   pertains to macroeconomics,not to microeconomics.
C)   must be true because of how the variables in the equation are defined.
D)   involves final goods,not intermediate goods.E) A) and D)
F) A) and C)

Question 9

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Accepted Answer

A) True 
 B)False

Question 10

Are sales of used goods included in GDP? Explain why or why not.Hint: Remember how GDP is defined.

Accepted Answer

Sales of used goods ...

Question 11

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Accepted Answer

GDP excludes some products because they ...

Question 12

Changes in nominal GDP reflect

Accepted Answer

A)   only changes in prices.
B)   only changes in the amounts being produced.
C)   both changes in prices and changes in the amounts being produced.
D)   neither changes in prices nor changes in the amounts being produced.E) A) and B)
F) A) and C)

Question 13

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

Accepted Answer

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

Question 14

Which of the following transactions adds to U.S.GDP for 2010?

Accepted Answer

A)   In 2010,Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2010.
B)   An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time.
C)   When Tim and Tina were both single,they lived in separate apartments and each paid $750 in rent.Tim and Tina got married in 2010 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,550 per month.
D)   All of the above transactions add to U.S.GDP for 2006.E) All of the above
F) A) and D)

Question 15

Disposable income is

Accepted Answer

A)   the total income earned by a nation's permanent residents.
B)   the total income earned by a nation's residents in the production of good and services.
C)   the income that households and non-corporate businesses receive.
D)   the income that households and businesses have remaining after satisfying their obligations to the government.E) All of the above
F) A) and D)

Question 16

Table 10-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 10-1.Disposable personal income for Bahkan in 2010 is

Accepted Answer

A)   $37.
B)   $44.
C)   $54.
D)   $63.E) None of the above
F) B) and C)

Question 17

If in some year real GDP was $5 trillion and the GDP deflator was 200,what was nominal GDP?

Accepted Answer

A)   $2.5 trillion
B)   $10 trillion
C)   $40 trillion
D)   $100 trillionE) A) and D)
F) A) and C)

Question 18

For the economy as a whole,how does income compare to expenditures? Explain.

Accepted Answer

For the economy as a whole inc...

Question 19

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Accepted Answer

A) True 
 B)False

Question 20

A transfer payment is

Accepted Answer

A)   a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location.
B)   a payment that is automatically transferred from your bank account to pay a bill or some other obligation.
C)   a form of government spending that is not made in exchange for a currently produced good or service.
D)   the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.E) A) and B)
F) A) and D)

Exam 23: Measuring a Nations Income

A U.S.firm produces nail guns in the first quarter of 2010 and adds them to its inventory.In the second quarter of 2010 the firm sells the nail guns to a U.S.construction company.In which quarter(s) is (are) GDP higher?

Correct AnswerverifiedShow Answer

The output of goods and services produced in the United States has grown on average 3 percent per year since 1965.

Correct AnswerverifiedShow Answer

Disposable income is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Correct AnswerverifiedShow Answer

An identity is an equation that

Correct AnswerverifiedShow Answer

The Patersons bought a home that was newly constructed in 2007 for $275,000.They sold the home in 2009 for $205,000.Which of the following statements is correct regarding the sale of the house?

Correct AnswerverifiedShow Answer

Table 23-1 The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009. Prices and Quantities -Refer to Table 23-1. What was nominal GDP,real GDP,and the GDP deflator for 2008?

Correct AnswerverifiedNominal GDP was $4x100 + $50X1...View AnswerShow Answer

Which of the following transactions adds to U.S.GDP for 2010?

Correct AnswerverifiedShow Answer

Much of macroeconomics attempts to explain

Correct AnswerverifiedShow Answer

Changes in real GDP reflect only changes in the amounts being produced.

Correct AnswerverifiedShow Answer

Are sales of used goods included in GDP? Explain why or why not.Hint: Remember how GDP is defined.

Correct AnswerverifiedSales of used goods ...View AnswerShow Answer

A transfer payment is

Correct AnswerverifiedShow Answer

For the economy as a whole,how does income compare to expenditures? Explain.

Correct AnswerverifiedFor the economy as a whole inc...View AnswerShow Answer

If in some year real GDP was $5 trillion and the GDP deflator was 200,what was nominal GDP?

Correct AnswerverifiedShow Answer

Changes in nominal GDP reflect

Correct AnswerverifiedShow Answer

Table 10-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 10-1.Disposable personal income for Bahkan in 2010 is

Correct AnswerverifiedShow Answer

Sam,an American citizen,prepares meals for his family at home.Ellen,a Canadian citizen,commutes to the U.S.to help prepare meals at a restaurant in Idaho.Whose value of services preparing meals is included in U.S.GDP?

Correct AnswerverifiedShow Answer

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct AnswerverifiedShow Answer

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.In spite of this definition,some production is left out of GDP.Explain why some final goods and services are not included.

Correct AnswerverifiedGDP excludes some products because they ...View AnswerShow 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
Nominal GDP was $4x100 + $50X1...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Sales of used goods ...
View Answer

Correct Answer
verified

Correct Answer
verified
For the economy as a whole inc...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
GDP excludes some products because they ...
View Answer