Question 1

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.

Question 2

If real GDP in 2018 (using 2009 prices) is lower than nominal GDP of 2017,then

Accepted Answer

A)  prices in 2018 are lower than prices in 2017.
B)  nominal GDP in 2018 equals nominal GDP in 2017.
C)  prices in 2018 are higher than prices in 2017.
D)  real GDP in 2018 is larger than real GDP in 2017.

Question 3

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 4

Which of the following equations correctly measures GDP in an economy?

Accepted Answer

A)  GDP = C + I + G + X
B)  GDP = C + net I + G + NX
C)  GDP = C + I + G + NX
D)  GDP = C + G + I - taxes

Question 5

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Accepted Answer

A)  employment in a specific industry.
B)  employment in the economy.
C)  output of a specific firm.
D)  output of a specific industry.

Question 6

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 7

If the value added of a firm is positive,will the firm necessarily have positive profits?

Accepted Answer

No.Value added equals the price of the f...

Question 8

U.S.gross national product is defined as

Accepted Answer

A)  the value of final goods and services produced within the United States.
B)  the value of final goods and services produced outside of the United States.
C)  the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States.
D)  the value of final goods and services produced within the United States,by United States residents.

Question 9

"Household production" refers to

Accepted Answer

A)  the manufacturing of durable household products.
B)  the home building sector of the economy.
C)  home-based craft businesses.
D)  goods and services people produce for themselves.

Question 10

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so,how?

Accepted Answer

We would double count if we co...

Question 11

The output of Mexican citizens who work in Texas would be included in the

Accepted Answer

A)  gross domestic product of Mexico.
B)  gross national product of Mexico.
C)  gross national product of the United States.
D)  net national product of the United States.

Question 12

Which of the following would be directly counted in GDP in 2018?

Accepted Answer

A)  kitchen cabinets purchased from Home Depot in 2018 to be installed in a house built in 1997
B)  kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a brand new country-style home
C)  kitchen cabinets built in 1887,extracted from the 1887 home,and installed in a farm house built in 1950
D)  none of the above

Question 13

Investment,as defined by economists,would not include which of the following? Ford

Accepted Answer

A)  buys a new robotic machine (from a plant in Ohio) to assemble cars.
B)  adds 1,000 new cars to inventories.
C)  builds another assembly plant in the United States.
D)  buys U.S.government bonds.

Question 14

If an American firm opens a production facility in India,the total value of the production will be included in the

Accepted Answer

A)  gross domestic product of the United States.
B)  national income of the United States.
C)  gross domestic product of India.
D)  consumption of fixed capital for India.

Question 15

If the GDP deflator is 142,by how much have prices changed since the base year?

Accepted Answer

A)  Prices have increased by 42%.
B)  Prices have increased by 142%.
C)  Prices have decreased by 4.2%.
D)  Prices have increased by 58%.

Question 16

In the first half of 2017,automobile sales in the United States were lower than they were in the first half of 2016.The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.

Accepted Answer

A)  nondurable goods; durable goods
B)  consumption; investment
C)  investment; consumption
D)  durable goods; nondurable goods

Question 17

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 18

Table 8-4
 
-Refer to Table 8-4.Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

Accepted Answer

A)  $2,200.
B)  $2,100.
C)  $1,600.
D)  $1,400.

Question 19

Table 8-30
 
-Refer to Table 8-30.The table above represents hypothetical data from the National Income Accounts for 2017.Use the data to calculate personal income and disposable personal income.

Accepted Answer

Personal income = National income - Reta...

Question 20

Which component of consumption spending is the greatest in a typical industrialized economy?

Accepted Answer

A)  services
B)  durable goods
C)  nondurable goods
D)  new housing

Exam 8: GDP: Measuring Total Production and Income

Table 8-4 -Refer to Table 8-4.Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

Correct AnswerverifiedShow Answer

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Correct AnswerverifiedShow Answer

The output of Mexican citizens who work in Texas would be included in the

Correct AnswerverifiedShow Answer

If the GDP deflator is 142,by how much have prices changed since the base year?

Correct AnswerverifiedShow Answer

If real GDP in 2018 (using 2009 prices) is lower than nominal GDP of 2017,then

Correct AnswerverifiedShow Answer

"Household production" refers to

Correct AnswerverifiedShow Answer

Which of the following would be directly counted in GDP in 2018?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

U.S.gross national product is defined as

Correct AnswerverifiedShow Answer

Investment,as defined by economists,would not include which of the following? Ford

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If the value added of a firm is positive,will the firm necessarily have positive profits?

Correct AnswerverifiedNo.Value added equals the price of the f...View AnswerShow Answer

If prices in the economy rise,then

Correct AnswerverifiedShow Answer

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so,how?

Correct AnswerverifiedWe would double count if we co...View AnswerShow Answer

Table 8-30 -Refer to Table 8-30.The table above represents hypothetical data from the National Income Accounts for 2017.Use the data to calculate personal income and disposable personal income.

Correct AnswerverifiedPersonal income = National income - Reta...View AnswerShow Answer

If an American firm opens a production facility in India,the total value of the production will be included in the

Correct AnswerverifiedShow Answer

Which of the following equations correctly measures GDP in an economy?

Correct AnswerverifiedShow Answer

In the first half of 2017,automobile sales in the United States were lower than they were in the first half of 2016.The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.

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

To calculate GDP by the expenditure method,one must add

Correct AnswerverifiedShow Answer

Which component of consumption spending is the greatest in a typical industrialized economy?

Correct AnswerverifiedShow Answer

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No.Value added equals the price of the f...
View Answer

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We would double count if we co...
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Personal income = National income - Reta...
View Answer

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In the first half of 2017,automobile sales in the United States were lower than they were in the first half of 2016.The decrease in auto sales impacts GDP because new automobiles are counted as when purchased by households and when purchased by businesses.

Correct Answer
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