Question 1

-According to the above table, net domestic product (NDP)  is

Accepted Answer

A)   $1,995.
B)   $2,265.
C)   $2,550.
D)   $2,850.

Question 2

Why must total income be identical to the dollar value of total output?

Accepted Answer

Total income must be identical to the do...

Question 3

To compute national income, which of the following items are added to net domestic product (NDP) ? I. business income adjustments net of indirect business taxes and transfers
II)  capital consumption allowance
III)  U.S. net income earned abroad

Accepted Answer

A)   I only
B)   II only
C)   both I and III
D)   both II and III

Question 4

The dollar value of total output

Accepted Answer

A)   equals the value of all physical goods sold in the United States.
B)   equals the market value of all final goods and services produced in the United States.
C)   equals only the value of stocks on the New York Stock Exchange.
D)   equals only the value of new services in the economy.

Question 5

Net exports is equal to

Accepted Answer

A)   total exports minus total imports.
B)   total imports minus total exports.
C)   total exports adjusted for price changes.
D)   total exports minus transfer payments.

Question 6

The annual cost of producing the entire output of goods and services in the economy

Accepted Answer

A)   includes financial transactions.
B)   can be calculated entirely on the basis of financial transactions.
C)   includes durable goods but excludes nondurable goods.
D)   is total income.

Question 7

The components of GDP using the income method (excluding indirect business taxes and depreciation)  are

Accepted Answer

A)   consumption expenditures, investment expenditures, and government expenditures.
B)   consumption expenditures, investment expenditures, government expenditures, and net exports.
C)   wages and interest.
D)   wages, interest, rents, and profits.

Question 8

The foreign exchange rate

Accepted Answer

A)   is the price of one good or service as compared to a similar good or service.
B)   is the same as the price of a product in U.S. dollars.
C)   is not relevant when comparing the GDPs of various countries.
D)   is the price of one currency in terms of another.

Question 9

Which of the following best describes a nation's Gross Domestic Product?

Accepted Answer

A)   The market value of all goods and services produced in the economy, including intermediate goods
B)   The total market value of all final goods and services produced in the economy during a year
C)   The constant dollar value of all goods produced in the economy during a year period
D)   The market value of all goods and services less depreciation

Question 10

-Using the above table, the Personal Income (PI)  for the country is

Accepted Answer

A)   84.
B)   228.
C)   155.
D)   301.

Question 11

The computation of GDP by adding up all components of national income including wages, interest, rent and profits is

Accepted Answer

A)   the expenditure approach.
B)   the income approach.
C)   transfer payments.
D)   the value of all securities.

Question 12

Suppose that the following occurred in two countries during the past decade. Country A, real Gross Domestic Product (GDP)  rose 40 percent and population rose 46 percent; Country B, real Gross Domestic Product (GDP)  increased 80 percent and population increased 75 percent. Based on this information, which is true?

Accepted Answer

A)   Both countries have experienced growth in per capita real Gross Domestic Product (GDP) .
B)   Neither country has experienced growth in per capita real Gross Domestic Product (GDP) .
C)   Chances for an improved standard of living are greater in Country A.
D)   Only Country B has experienced growth in its per capita real Gross Domestic Product (GDP) .

Question 13

Durable consumer goods are goods that last more than

Accepted Answer

A)   one year.
B)   three years.
C)   five years.
D)   seven years.

Question 14

Explain how disposable personal income is derived from Gross Domestic Product.

Accepted Answer

Gross domestic product is the same thing...

Question 15

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes)  is

Accepted Answer

A)   consumption + investment + government spending + net exports
B)   wages + rent + interest + profits
C)   wages + rent + interest + profits + indirect business taxes
D)   wages + rent + interest + profits + indirect business taxes + depreciation

Question 16

Which of the following items is NOT included in GDP?

Accepted Answer

A)   purchase of a hamburger at a fast-food restaurant
B)   sales at a grocery store
C)   sale of Microsoft stock
D)   downloads of new music albums charged to a credit card

Question 17

-Refer to the above table. Real GDP in 2010 is

Accepted Answer

A)   190.8.
B)   477.
C)   500.
D)   524.1.

Question 18

One difference between net domestic product and national income is that

Accepted Answer

A)   net domestic product includes depreciation.
B)   national income includes government and business transfer payments.
C)   net domestic product includes indirect business taxes and transfers.
D)   net domestic product doesn't include Social Security taxes or corporate retained earnings.

Question 19

The circular flow of income shows

Accepted Answer

A)   the dollar value of output is less than the total income.
B)   the dollar value of output is more than the total income because of the existence of profits.
C)   the dollar value of output is exactly equal to the total income.
D)   the dollar value of output is more or less than the total income, depending on whether profits are positive or negative.

Question 20

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP)  is when

Accepted Answer

A)   a family sells its home because of a transfer.
B)   a farmer buys a used tractor.
C)   inventories of new cars accumulate on the lots of car dealers.
D)   government increases spending on infrastructure.

Exam 8: Measuring the Economys Performance

Correct Answer
verified

To compute national income, which of the following items are added to net domestic product (NDP) ? I. business income adjustments net of indirect business taxes and transfers II) capital consumption allowance III) U.S. net income earned abroad

Correct Answer
verified

The components of GDP using the income method (excluding indirect business taxes and depreciation) are

Correct Answer
verified

The circular flow of income shows

Correct Answer
verified

-According to the above table, net domestic product (NDP) is

Correct Answer
verified

The computation of GDP by adding up all components of national income including wages, interest, rent and profits is

Correct Answer
verified

-Using the above table, the Personal Income (PI) for the country is

Correct Answer
verified

-Refer to the above table. Real GDP in 2010 is

Correct Answer
verified

Which of the following best describes a nation's Gross Domestic Product?

Correct Answer
verified

Durable consumer goods are goods that last more than

Correct Answer
verified

Explain how disposable personal income is derived from Gross Domestic Product.

Correct Answer
verified
Gross domestic product is the same thing...
View Answer

Why must total income be identical to the dollar value of total output?

Correct Answer
verified
Total income must be identical to the do...
View Answer

One difference between net domestic product and national income is that

Correct Answer
verified

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes) is

Correct Answer
verified

The dollar value of total output

Correct Answer
verified

The annual cost of producing the entire output of goods and services in the economy

Correct Answer
verified

The foreign exchange rate

Correct Answer
verified

Net exports is equal to

Correct Answer
verified

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

Correct Answer
verified

Which of the following items is NOT included in GDP?

Correct Answer
verified

Exam 8: Measuring the Economys Performance

Correct AnswerverifiedShow Answer

To compute national income, which of the following items are added to net domestic product (NDP) ? I. business income adjustments net of indirect business taxes and transfers II) capital consumption allowance III) U.S. net income earned abroad

Correct AnswerverifiedShow Answer

The components of GDP using the income method (excluding indirect business taxes and depreciation) are

Correct AnswerverifiedShow Answer

The circular flow of income shows

Correct AnswerverifiedShow Answer

-According to the above table, net domestic product (NDP) is

Correct AnswerverifiedShow Answer

The computation of GDP by adding up all components of national income including wages, interest, rent and profits is

Correct AnswerverifiedShow Answer

-Using the above table, the Personal Income (PI) for the country is

Correct AnswerverifiedShow Answer

-Refer to the above table. Real GDP in 2010 is

Correct AnswerverifiedShow Answer

Which of the following best describes a nation's Gross Domestic Product?

Correct AnswerverifiedShow Answer

Durable consumer goods are goods that last more than

Correct AnswerverifiedShow Answer

Explain how disposable personal income is derived from Gross Domestic Product.

Correct AnswerverifiedGross domestic product is the same thing...View AnswerShow Answer

Why must total income be identical to the dollar value of total output?

Correct AnswerverifiedTotal income must be identical to the do...View AnswerShow Answer

One difference between net domestic product and national income is that

Correct AnswerverifiedShow Answer

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes) is

Correct AnswerverifiedShow Answer

The dollar value of total output

Correct AnswerverifiedShow Answer

The annual cost of producing the entire output of goods and services in the economy

Correct AnswerverifiedShow Answer

The foreign exchange rate

Correct AnswerverifiedShow Answer

Net exports is equal to

Correct AnswerverifiedShow Answer

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

Correct AnswerverifiedShow Answer

Which of the following items is NOT included in GDP?

Correct AnswerverifiedShow Answer

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Gross domestic product is the same thing...
View Answer

Correct Answer
verified
Total income must be identical to the do...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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