Question 1

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Accepted Answer

A)   $18,000
B)   $22,000
C)   $39,000
D)   $57,000E) B) and D)
F) A) and B)

Question 2

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Accepted Answer

A)   market prices.
B)   statistical estimates of the value of goods and services to consumers.
C)   prices based on the assumption that producers make no profits.
D)   the maximum amount consumers would be willing to pay.E) B) and D)
F) A) and D)

Question 3

Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion?

Accepted Answer

A)   GDP necessarily increases.
B)   GDP necessarily decreases.
C)   GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP.
D)   GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of owner occupied housing services.E) B) and C)
F) B) and D)

Question 4

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Accepted Answer

A)   $6700
B)   $6800
C)   $7000
D)   $7200E) A) and B)
F) None of the above

Question 5

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Accepted Answer

A)   -$250
B)   $250
C)   $2200
D)   Net exports cannot be calculated from the information given.E) A) and C)
F) None of the above

Question 6

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 D)
F) B) and C)

Question 7

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

Accepted Answer

A)   the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and subtracted from the investment category of 2011 GDP.
B)   the value of the good is added to the investment category of 2010 GDP, added to the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP.
C)   the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and not included in the investment category of 2011 GDP.
D)   the value of the good is added to the investment category of 2010 GDP, subtracted from the consumption category of 2011 GDP, and added to the investment category of 2011 GDP.E) B) and D)
F) None of the above

Question 8

When economists talk about growth in the economy, they measure that growth as the

Accepted Answer

A)   absolute change in nominal GDP from one period to another.
B)   percentage change in nominal GDP from one period to another.
C)   absolute change in real GDP from one period to another.
D)   percentage change in real GDP from one period to another.E) A) and B)
F) None of the above

Question 9

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Accepted Answer

A)   remains constant.
B)   doubles.
C)   triples.
D)   quadruples.E) B) and D)
F) A) and B)

Question 10

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur...

Question 11

In 2009, U.S. net exports were

Accepted Answer

A)   positive and about 3 percent the size of GDP.
B)   positive and about 6 percent the size of GDP.
C)   negative and about 3 percent the size of GDP.
D)   negative and about 6 percent the size of GDP.E) B) and C)
F) None of the above

Question 12

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

Accepted Answer

A)   in both German GDP and U.S. GDP.
B)   in German GDP, but is not included in U.S. GDP.
C)   in U.S. GDP, but is not included in German GDP.
D)   in neither German GDP nor U.S. GDP.E) C) and D)
F) None of the above

Question 13

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)   in government expenditures and exports.
B)   government expenditures and imports.
C)   exports, but not government expenditures.
D)   imports, but not government expenditures.E) A) and B)
F) C) and D)

Question 14

Table 5-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

Accepted Answer

A)   $37.
B)   $44.
C)   $54.
D)   $63.E) B) and C)
F) A) and B)

Question 15

GDP does not reflect

Accepted Answer

A)   the value of leisure.
B)   the value of goods and services produced at home.
C)   the quality of the environment.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 16

GDP is equal to

Accepted Answer

A)   the market value of all final goods and services produced within a country in a given period of time.
B)   Y.
C)   C + I + G + NX.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 17

Which of the following transactions adds to U.S. GDP for 2010?

Accepted Answer

A)   In 2010, Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis. The windows remain in Marvin's inventory at the end of 2010.
B)   An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time.
C)   When Tim and Tina were both single, they lived in separate apartments and each paid $750 in rent. Tim and Tina got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,550 per month.
D)   All of the above transactions add to U.S. GDP for 2006.E) A) and B)
F) All of the above

Question 18

Table 5-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 5-1. What was country A's consumption in 2010?

Accepted Answer

A)   $2018
B)   $3010
C)   $3311
D)   $4015E) B) and D)
F) C) and D)

Question 19

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

Accepted Answer

A) True 
 B)False

Question 20

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, the...

Exam 5: Measuring a Nations Income

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Correct Answer
verified

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Correct Answer
verified

GDP is equal to

Correct Answer
verified

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

Correct Answer
verified

GDP does not reflect

Correct Answer
verified

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

Correct Answer
verified

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Correct Answer
verified

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

Correct Answer
verified

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Correct Answer
verified
Intermediate goods produced and sold dur...
View Answer

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

Correct Answer
verified

Which of the following transactions adds to U.S. GDP for 2010?

Correct Answer
verified

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Correct Answer
verified

In 2009, U.S. net exports were

Correct Answer
verified

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Correct Answer
verified

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What was country A's consumption in 2010?

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

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Correct Answer
verified

When economists talk about growth in the economy, they measure that growth as the

Correct Answer
verified

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 Answer
verified
a.
Since this is a transfer payment, the...
View Answer

Exam 5: Measuring a Nations Income

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

Correct AnswerverifiedShow Answer

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Correct AnswerverifiedShow Answer

GDP is equal to

Correct AnswerverifiedShow Answer

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

Correct AnswerverifiedShow Answer

GDP does not reflect

Correct AnswerverifiedShow Answer

GDP includes the value of paper clips but does not also count the value of the metal used to make them.

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. What were Ukzten's net exports in 2010?

Correct AnswerverifiedShow Answer

Table 5-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 5-1. Disposable personal income for Bahkan in 2010 is

Correct AnswerverifiedShow Answer

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Correct AnswerverifiedIntermediate goods produced and sold dur...View AnswerShow Answer

A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

Correct AnswerverifiedShow Answer

Which of the following transactions adds to U.S. GDP for 2010?

Correct AnswerverifiedShow Answer

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

Correct AnswerverifiedShow Answer

In 2009, U.S. net exports were

Correct AnswerverifiedShow Answer

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Correct AnswerverifiedShow Answer

Table 5-1 The table below contains data for country A for the year 2010. -Refer to Table 5-1. What was country A's consumption in 2010?

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

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

Correct AnswerverifiedShow Answer

When economists talk about growth in the economy, they measure that growth as the

Correct AnswerverifiedShow Answer

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, the...View AnswerShow Answer

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verified
Intermediate goods produced and sold dur...
View Answer

Correct Answer
verified

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verified

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verified

Correct Answer
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Correct Answer
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a.
Since this is a transfer payment, the...
View Answer