Question 1

Expenditures by households on education are included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 2

Table 10-4
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.Prices and Quantities
   Year  Price af Cereal  Quantity af  Cereal  Price af Millz  Quantity df  Mill 2008$4.0090$1.501502009$4.00100$2.001802010$5.00120$2.502002011$6.00150$3.50200\begin{array} { c c c c c } 	ext { Year } & 	ext { Price af Cereal } & \begin{array} { c } 	ext { Quantity af } \	ext { Cereal }\end{array} & 	ext { Price af Millz } & \begin{array} { c } 	ext { Quantity df } \	ext { Mill }\end{array} \\hline 2008 & \$ 4.00 & 90 & \$ 1.50 & 150 \2009 & \$ 4.00 & 100 & \$ 2.00 & 180 \2010 & \$ 5.00 & 120 & \$ 2.50 & 200 \2011 & \$ 6.00 & 150 & \$ 3.50 & 200\end{array} Year 2008200920102011​ Price af Cereal $4.00$4.00$5.00$6.00​ Quantity af  Cereal ​90100120150​ Price af Millz $1.50$2.00$2.50$3.50​ Quantity df  Mill ​150180200200​​ 
-Refer to Table 10-4. In 2008, this country's

Accepted Answer

A)  nominal GDP was greater than real GDP, and the GDP deflator was greater than 100.
B)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 1.
C)  nominal GDP was less than real GDP, and the GDP deflator was less than 100.
D)  nominal GDP was equal to real GDP, and the GDP deflator was equal to 100. E) B) and C)
F) None of the above

Question 3

Which of the following is a way to compute GDP?

Accepted Answer

A)  add up the wages paid to all workers
B)  add up the quantities of all final goods and services
C)  add up the market values of all final goods and services
D)  add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and servicesE) A) and B)
F) A) and C)

Question 4

The local Chevrolet dealership has an increase in inventory of 25 newly produced cars in 2006. In 2007, it sells all 25 cars. Which of the following statements is correct?

Accepted Answer

A)  The value of the cars in inventory will be counted as part of 2006 GDP, and the value of the cars sold in 2007 will not increase 2007 GDP.
B)  The value of the cars in inventory will not affect 2006 GDP, and the value of the cars sold in 2007 will increase 2007 GDP.
C)  The value of the cars in inventory will be counted as part of 2006 GDP, and the value of the cars sold in 2007 will increase 2007 GDP.
D)  The value of the cars in inventory will not affect 2006 GDP, and the value of the cars sold in 2007 will not increase 2007 GDP.E) B) and C)
F) B) and D)

Question 5

Recessions are not associated with which of the following?

Accepted Answer

A)  increased bankruptcies
B)  falling profits
C)  falling incomes
D)  falling unemploymentE) B) and C)
F) C) and D)

Question 6

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Accepted Answer

A)  U.S. investment, GDP, and GNP all increase by the same amount.
B)  U.S. investment increases, but GDP and GNP are unaffected by the purchase.
C)  U.S. investment and GDP increase by the same amount, but U.S. GNP increases by a smaller amount.
D)  U.S. investment and GNP increase by the same amount, but U.S. GDP increases by a smaller amount.E) None of the above
F) All of the above

Question 7

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 8

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Accepted Answer

A)  the quality of these items is not high enough to contribute value to GDP.
B)  measuring them is so difficult.
C)  the government wants to discourage the production and consumption of these items.
D)  these items are not reported on income tax forms.E) A) and B)
F) A) and C)

Question 9

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Accepted Answer

A)  Janet's purchase and ABC Bakery's purchase.
B)  ABC Bakery's purchase but not Janet's purchase.
C)  Janet's purchase but not ABC Bakery's purchase.
D)  Neither Janet's purchase nor ABC Bakery's purchase.E) All of the above
F) A) and B)

Question 10

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A)  the value of unpaid housework
B)  the value of services provided by major household appliances purchased in a previous period
C)  the estimated rental value of owner-occupied homes
D)  All of the above are included in GDP.E) A) and C)
F) All of the above

Question 11

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Accepted Answer

A)  would be included in GDP because they are part of government purchases.
B)  would be included in GDP because they are part of investment expenditures.
C)  would not be included in GDP because they are transfer payments.
D)  would not be included in GDP because the government raises taxes to pay for them.E) A) and B)
F) B) and D)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 14

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Accepted Answer

A) True 
 B)False

Question 15

The percentage change in the price level from one period to another is called

Accepted Answer

A)  the growth rate.
B)  the inflation rate.
C)  the GDP deflator.
D)  the unemployment rate.E) C) and D)
F) B) and C)

Question 16

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) B) and C)
F) B) and D)

Question 17

Which of the following is not included in U.S. GDP?

Accepted Answer

A)  unpaid cleaning and maintenance of houses
B)  services such as those provided by lawyers and hair stylists
C)  the estimated rental value of owner-occupied housing
D)  production of foreign citizens living in the United StatesE) B) and C)
F) A) and B)

Question 18

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Accepted Answer

A)  U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected.
B)  U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000.
C)  U.S. government purchases, net exports, and GDP are unaffected.
D)  U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.E) A) and D)
F) A) and C)

Question 19

In 2009, GDP per person in the United States was almost

Accepted Answer

A)  $25,000.
B)  $32,000.
C)  $46,000
D)  $53,000E) A) and B)
F) C) and D)

Question 20

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

Exam 10: Measuring a Nations Income

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Correct Answer
verified

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Correct Answer
verified

Which of the following is not included in U.S. GDP?

Correct Answer
verified

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Correct Answer
verified

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct Answer
verified

The percentage change in the price level from one period to another is called

Correct Answer
verified

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

Correct Answer
verified

Which of the following is a way to compute GDP?

Correct Answer
verified

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Correct Answer
verified

Estimates of the values of which of the following non-market goods or services are included in GDP?

Correct Answer
verified

In 2009, GDP per person in the United States was almost

Correct Answer
verified

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Correct Answer
verified

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

Correct Answer
verified

Expenditures by households on education are included in the consumption component of GDP.

Correct Answer
verified

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 Answer
verified

Recessions are not associated with which of the following?

Correct Answer
verified

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct Answer
verified

The local Chevrolet dealership has an increase in inventory of 25 newly produced cars in 2006. In 2007, it sells all 25 cars. Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Correct Answer
verified

Exam 10: Measuring a Nations Income

The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,

Correct AnswerverifiedShow Answer

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Correct AnswerverifiedShow Answer

Which of the following is not included in U.S. GDP?

Correct AnswerverifiedShow Answer

GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

Correct AnswerverifiedShow Answer

Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate.

Correct AnswerverifiedShow Answer

The percentage change in the price level from one period to another is called

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

Which of the following is a way to compute GDP?

Correct AnswerverifiedShow Answer

U.S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance.

Correct AnswerverifiedShow Answer

Estimates of the values of which of the following non-market goods or services are included in GDP?

Correct AnswerverifiedShow Answer

In 2009, GDP per person in the United States was almost

Correct AnswerverifiedShow Answer

Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Expenditures by households on education are included in the consumption component of 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

Recessions are not associated with which of the following?

Correct AnswerverifiedShow Answer

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct AnswerverifiedShow Answer

The local Chevrolet dealership has an increase in inventory of 25 newly produced cars in 2006. In 2007, it sells all 25 cars. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

Correct AnswerverifiedShow Answer

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