Question 1

National income is defined as

Accepted Answer

A)   gross national product plus transfer payments.
B)   gross national product less retained earnings plus transfer payments.
C)   gross domestic product less retained earnings plus transfer payments.
D)   gross domestic product less the consumption of fixed capital.

Question 2

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

Accepted Answer

A)   $185 billion.
B)   $215 billion.
C)   $220 billion.
D)   $245 billion.

Question 3

Table 12-25
 $\begin{array}{|l|l|l|}
\hline & \mathbf{2 0 1 7} & {\mathbf{2 0 1 8}} \
\hline \text { Nominal GDP } & \$ 10,000 & \$ 15,000 \
\hline \text { Real GDP } & 10,000 & 14,000 \
\hline
\end{array}$
-Refer to Table 12-25.Given the information above,calculate the GDP deflator for both 2017 and 2018.What does the value of the deflator in the year 2017 tell you about that year with respect to the base year? What happened to prices in 2018 as compared to 2017?

Accepted Answer

To calculate the GDP deflator for 2017 a...

Question 4

Table 12-19
  20172018 Nominal GDP $10,000$12,000 Real GDP 9,50010,500\begin{array}{|l|c|r|}\hline & \mathbf{2 0 1 7} & {\mathbf{2 0 1 8}} \\hline 	ext { Nominal GDP } & \$ 10,000 & \$ 12,000 \\hline 	ext { Real GDP } & 9,500 & 10,500 \\hline\end{array} Nominal GDP  Real GDP ​2017$10,0009,500​2018$12,00010,500​​ 
-Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2018.

Accepted Answer

A)   114
B)   105
C)   95
D)   87

Question 5

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Accepted Answer

The largest category of expenditures is ...

Question 6

National income equals gross national product minus

Accepted Answer

A)   imports.
B)   depreciation.
C)   inventories.
D)   changes in inventories.

Question 7

Table 12-18
  20132018 Product  Quantity  Price  Quantity  Price  Camera 100$10120$12 Legal services 50154520 Books 2004021045\begin{array}{|c|c|c|c|c|}\hline & 2013 & & 2018 & \\hline 	ext { Product } & 	ext { Quantity } & 	ext { Price } & 	ext { Quantity } & 	ext { Price } \\hline 	ext { Camera } & 100 & \$ 10 & 120 & \$ 12 \\hline 	ext { Legal services } & 50 & 15 & 45 & 20 \\hline 	ext { Books } & 200 & 40 & 210 & 45 \\hline\end{array} Product  Camera  Legal services  Books ​2013 Quantity 10050200​ Price $101540​2018 Quantity 12045210​ Price $122045​​  A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 12-18.What is real GDP in 2018,using 2018 as the base year?

Accepted Answer

A)   $28,885
B)   $11,790
C)   $11,200
D)   $10,275

Question 8

To calculate GDP by the expenditure method,one must add

Accepted Answer

A)   wages, rents, interest, and profits.
B)   consumption spending, investment spending, government purchases, and net exports.
C)   consumption spending, investment spending, government purchases, and exports.
D)   labor, natural resources, entrepreneurship, and capital.

Question 9

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

Accepted Answer

A)   equal to 100.
B)   greater than 100.
C)   less than 100.
D)   less than 0.

Question 10

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Accepted Answer

A)   households; sell
B)   households; buy
C)   firms; sell
D)   firms; buy

Question 11

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

Accepted Answer

A)   2018
B)   2019
C)   Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP.
D)   The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP.

Question 12

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

Accepted Answer

A)   consumption expenditures.
B)   investment expenditures.
C)   government purchases.
D)   net exports.

Question 13

The drawback to calculating real GDP using base-year prices is that

Accepted Answer

A)   real GDP in one year is not comparable to real GDP in another year.
B)   relative prices change over time and these are not reflected in base-year prices, and this distorts GDP.
C)   relative prices change over time and these changes are reflected in base-year prices.
D)   quality changes are reflected in base-year prices.

Question 14

Table 12-6
   Product  Quantity  Price per Unit  Coke 10,000$2 iPhones 2,000150 Backpack.s 4,00025 Hershey bars 8,0001\begin{array}{|l|r|c|}\hline {	ext { Product }} & 	ext { Quantity }& 	ext { Price per Unit } \\hline 	ext { Coke } & 10,000 &\$2\\hline 	ext { iPhones } & 2,000&150 \\hline 	ext { Backpack.s } & 4,000 &25\\hline 	ext { Hershey bars } & 8,000&1\\hline\end{array} Product  Coke  iPhones  Backpack.s  Hershey bars ​ Quantity 10,0002,0004,0008,000​ Price per Unit $2150251​​ 
-Refer to Table 12-6.Consider the table of production and price statistics for a small economy in 2018.If the economy only produces the four goods listed below,what is GDP for 2018?

Accepted Answer

A)   $428,000
B)   $267,000
C)   $24,000
D)   $1,424

Question 15

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Accepted Answer

A)   greater than their values without these measurements.
B)   less than their values without these measurements.
C)   unchanged from their values without these measurements.
D)   meaningless, since GDP values without these measurements would no longer be of value.

Question 16

If prices in the economy rise,then

Accepted Answer

A)   the purchasing power of a dollar rises.
B)   the purchasing power of a dollar stays constant.
C)   the purchasing power of a dollar declines.
D)   the purchasing power of a dollar cannot be determined.

Question 17

Real GDP will increase

Accepted Answer

A)   only if the price level rises.
B)   only if the price level falls.
C)   only if the quantity of final goods and services produced rises.
D)   if either the price level rises or the quantity of final goods and services produced rises.

Question 18

The "underground economy" is also referred to as

Accepted Answer

A)   the informal sector.
B)   the formal sector.
C)   the halfway economy.
D)   the net domestic product economy.

Question 19

Disposable personal income is equal to personal income minus personal tax payments.

Accepted Answer

A) True 
 B)False

Question 20

Investment,as defined by economists,would include the purchase of a

Accepted Answer

A)   corporate bond.
B)   government bond.
C)   share of stock in ExxonMobil.
D)   computer by an accounting firm.

Exam 12: GDP: Measuring Total Production and Income

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Correct Answer
verified
The largest category of expenditures is ...
View Answer

Correct Answer
verified

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

Correct Answer
verified

The drawback to calculating real GDP using base-year prices is that

Correct Answer
verified

In the circular flow diagram, supply the factors of production,and goods and services.

Correct Answer
verified

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Correct Answer
verified

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

Correct Answer
verified

To calculate GDP by the expenditure method,one must add

Correct Answer
verified

Investment,as defined by economists,would include the purchase of a

Correct Answer
verified

Table 12-19 $\begin{array}{|l|c|r|}\hline & \mathbf{2 0 1 7} & {\mathbf{2 0 1 8}} \\\hline \text { Nominal GDP } & \$ 10,000 & \$ 12,000 \\\hline \text { Real GDP } & 9,500 & 10,500 \\\hline\end{array}$ -Refer to Table 12-19.Given the information above,calculate the GDP deflator in 2018.

Correct Answer
verified

The "underground economy" is also referred to as

Correct Answer
verified

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

Correct Answer
verified

Disposable personal income is equal to personal income minus personal tax payments.

Correct Answer
verified

National income equals gross national product minus

Correct Answer
verified

Real GDP will increase

Correct Answer
verified

Correct Answer
verified

If prices in the economy rise,then

Correct Answer
verified

National income is defined as

Correct Answer
verified

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

Correct Answer
verified

Correct Answer
verified
To calculate the GDP deflator for 2017 a...
View Answer

Exam 12: GDP: Measuring Total Production and Income

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Correct AnswerverifiedThe largest category of expenditures is ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

Correct AnswerverifiedShow Answer

The drawback to calculating real GDP using base-year prices is that

Correct AnswerverifiedShow Answer

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Correct AnswerverifiedShow Answer

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be

Correct AnswerverifiedShow Answer

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

Correct AnswerverifiedShow Answer

To calculate GDP by the expenditure method,one must add

Correct AnswerverifiedShow Answer

Investment,as defined by economists,would include the purchase of a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The "underground economy" is also referred to as

Correct AnswerverifiedShow Answer

Suppose that in 2018,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2018 is

Correct AnswerverifiedShow Answer

Disposable personal income is equal to personal income minus personal tax payments.

Correct AnswerverifiedShow Answer

National income equals gross national product minus

Correct AnswerverifiedShow Answer

Real GDP will increase

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If prices in the economy rise,then

Correct AnswerverifiedShow Answer

National income is defined as

Correct AnswerverifiedShow Answer

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP,in which year's GDP should it be counted?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTo calculate the GDP deflator for 2017 a...View AnswerShow Answer

Correct Answer
verified
The largest category of expenditures is ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In the circular flow diagram, supply the factors of production,and goods and services.

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

Correct Answer
verified

Correct Answer
verified
To calculate the GDP deflator for 2017 a...
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