Question 1

For the purpose of calculating GDP,investment is spending on

Accepted Answer

A)   stocks,bonds,and other financial assets.
B)   real estate and financial assets such as stocks and bonds.
C)   capital equipment,inventories,and structures,including household purchases of new housing.
D)   capital equipment,inventories,and structures,excluding household purchases of new housing.E) A) and B)
F) B) and C)

Question 2

Which of the following is included in GDP?

Accepted Answer

A)   medical marijuana purchased from a government-run pharmacy by a glaucoma patient
B)   recreational marijuana purchased from a drug dealer by a college student
C)   recreational marijuana produced and consumed by a man in his attic
D)   All of the above are included in GDP.E) A) and D)
F) None of the above

Question 3

Table 15-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 15-1.What were country A's exports in 2010?

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) A) and C)
F) B) and D)

Question 4

The consumption component of GDP includes spending on

Accepted Answer

A)   durable goods and nondurable goods,but not spending on services.
B)   durable goods and services,but not spending on nondurable goods.
C)   nondurable goods and services,but not spending on durable goods.
D)   durable goods,nondurable goods,and services.E) A) and D)
F) A) and C)

Question 5

Ryan lives in an apartment where he pays $7,000 a year in rent.Alexis lives in a house that could be rented for $14,000 a year.How much do these housing services contribute to GDP?

Accepted Answer

A)   $21,000
B)   $14,000
C)   $7,000
D)   $0E) A) and D)
F) All of the above

Question 6

If a firm produces a good and then adds it to its inventory rather than selling it,for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

Accepted Answer

A) True 
 B)False

Question 7

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Accepted Answer

A)   a positive contribution both to investment and to GDP.
B)   a positive contribution both to consumption and to GDP.
C)   a positive contribution to GDP,but it does not affect investment or consumption.
D)   a positive contribution to investment,but it does not affect GDP.E) B) and C)
F) A) and D)

Question 8

International data on GDP and socioeconomic variables

Accepted Answer

A)   are inconclusive about the relationship between GDP and the economic well-being of citizens.
B)   suggest that poor nations actually might enjoy a higher standard of living than do rich nations.
C)   leave no doubt that a nation's GDP is closely associated with its citizens' standard of living.
D)   indicate that there are few real differences in living standards around the world,in spite of the large differences in GDP between nations.E) C) and D)
F) B) and D)

Question 9

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

Accepted Answer

A)   Both item (1) and item (2) are included in the consumption component of GDP.
B)   Item (1) is included in the consumption component of GDP,while item (2) is included in the investment component of GDP.
C)   Item (1) is included in the investment component of GDP,while item (2) is included in the consumption component of GDP.
D)   Only item (2) is included in GDP,and it is included in the investment component.E) B) and C)
F) A) and B)

Question 10

Table 15-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 15-1.Gross national product for Bahkan in 2010 is

Accepted Answer

A)   $95.
B)   $100.
C)   $110.
D)   $115.E) A) and B)
F) B) and D)

Question 11

If the U.S.government reports that GDP in the third quarter was $14 trillion at an annual rate,then the amount of income and expenditure during quarter three was $4 trillion.

Accepted Answer

A) True 
 B)False

Question 12

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) All of the above
F) A) and B)

Question 13

GDP excludes the value of intermediate goods because their value is included in the value of final goods.

Accepted Answer

A) True 
 B)False

Question 14

Table 15-4
The table below reports nominal and real GDP for the U.S.from 1929 to 1932.
 
-Refer to Table 15-3.What is the GDP deflator and the inflation rate for 1931?

Accepted Answer

A)   9.16,-11.5
B)   9.16,-10.3
C)   1091.37,10.3
D)   1091.37,11.5E) A) and D)
F) None of the above

Question 15

Household spending on education is included in

Accepted Answer

A)   consumption,although it might be argued that it would fit better in investment.
B)   investment,although it might be argued that it would fit better in consumption.
C)   government spending,based on the fact that most higher-education students attend publicly-supported colleges and universities.
D)   None of the above is correct; in general,household spending on services is not included in any component of GDP.E) A) and B)
F) A) and D)

Question 16

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) All of the above
F) A) and D)

Question 17

Identify the immediate effect of each of the following events on U.S.GDP and its components.
a.
James receives a Social Security check.
b.
John buys an Italian sports car.
c.
Henry buys domestically produced tools for his construction company.

Accepted Answer

a. Since this is a transfer payment,ther...

Question 18

Grapes are considered intermediate goods

Accepted Answer

A)   whether the purchaser uses them to make wine to sell or eats them.
B)   if the purchaser uses them to make wine to sell others but not if the purchaser eats them.
C)   if the purchaser eats them,but not if the purchaser uses to them to make wine to sell.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 19

How is net national product (NNP) calculated?

Accepted Answer

A)   Saving is added to the total income of a nation's citizens.
B)   Saving is added to the total income earned within a nation.
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are subtracted from the total income earned within a nation.E) C) and D)
F) B) and D)

Question 20

If consumption is $7000,exports are $600,government purchases are $2000,government transfers are $900,imports are $800,and investment is $1000,then GDP is $9,800.

Accepted Answer

A) True 
 B)False

Exam 15: Measuring a Nations Income

If consumption is $7000,exports are $600,government purchases are $2000,government transfers are $900,imports are $800,and investment is $1000,then GDP is $9,800.

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If the U.S.government reports that GDP in the third quarter was $14 trillion at an annual rate,then the amount of income and expenditure during quarter three was $4 trillion.

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GDP excludes the value of intermediate goods because their value is included in the value of final goods.

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Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

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Ryan lives in an apartment where he pays $7,000 a year in rent.Alexis lives in a house that could be rented for $14,000 a year.How much do these housing services contribute to GDP?

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A transfer payment is

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Which of the following is included in GDP?

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Table 15-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 15-1.Gross national product for Bahkan in 2010 is

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Grapes are considered intermediate goods

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If a firm produces a good and then adds it to its inventory rather than selling it,for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures.

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Household spending on education is included in

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A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Correct AnswerverifiedShow Answer

Table 15-1 The table below contains data for country A for the year 2010. -Refer to Table 15-1.What were country A's exports in 2010?

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Table 15-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 15-3.What is the GDP deflator and the inflation rate for 1931?

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The consumption component of GDP includes spending on

Correct AnswerverifiedShow Answer

International data on GDP and socioeconomic variables

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How is net national product (NNP) calculated?

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Identify the immediate effect of each of the following events on U.S.GDP and its components. a. James receives a Social Security check. b. John buys an Italian sports car. c. Henry buys domestically produced tools for his construction company.

Correct Answerverifieda. Since this is a transfer payment,ther...View AnswerShow 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?

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For the purpose of calculating GDP,investment is spending on

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a. Since this is a transfer payment,ther...
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