Question 1

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

Accepted Answer

A)   16.7%.
B)   10.0%.
C)   15.0%.
D)   -9.1%.E) B) and C)
F) All of the above

Question 2

Which of the following statements regarding GDP is correct?

Accepted Answer

A)   GDP includes factory production, but not any harm that may be inflicted on the environment.
B)   GDP accounts for all activities taking place outside markets.
C)   GDP provides detailed information about the distribution of income.
D)   GDP is a good measure of economic well-being for all purposes.E) None of the above
F) B) and C)

Question 3

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 4

Countries with low GDP per person tend to have

Accepted Answer

A)   lower rates of child malnutrition.
B)   fewer infants with low birth weight.
C)   higher rates of infant mortality.
D)   more access to safe drinking water.E) None of the above
F) A) and D)

Question 5

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 6

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Accepted Answer

A)   personal income and personal disposable income.
B)   estimates of GDP and actual GDP.
C)   the income and expenditure approaches to the calculation of GDP.
D)   the quarterly and annual approaches to the calculation of GDP.E) A) and B)
F) A) and C)

Question 7

Table 23-3
The table below contains data for the country of Crete for the year 2010. 
-Refer to Table 23-3. What was Crete's GDP in 2010?

Accepted Answer

A)   $4623
B)   $5731
C)   $6037
D)   $6839E) A) and B)
F) All of the above

Question 8

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Accepted Answer

A)   1.5 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP.
B)   1.5 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.
C)   6 trillion euro, and real GDP is a better gauge of economic activity than nominal GDP.
D)   6 trillion euro, but nominal GDP is a better gauge of economic activity than real GDP.E) C) and D)
F) B) and D)

Question 9

A farmer sells $25,000 worth of apples to individuals who take them home to eat, $50,000 worth of apples to a company that uses them all to produce cider, and $75,000 worth of apples to a grocery store that will sell them to households. How much of the farmer's sales will be included as apples in GDP?

Accepted Answer

A)   $25,000
B)   $150,000
C)   $100,000
D)   $125,000E) A) and D)
F) A) and B)

Question 10

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Accepted Answer

A)   investment.
B)   government spending.
C)   consumption of services.
D)   consumption of durable goods.E) C) and D)
F) A) and B)

Question 11

National income differs from net national because

Accepted Answer

A)   it includes profits of corporations.
B)   of a statistical discrepancy.
C)   it includes transfer payments.
D)   it excludes depreciation.E) B) and C)
F) None of the above

Question 12

Unlike national income, personal income

Accepted Answer

A)   includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government.
B)   excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government.
C)   excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government.
D)   includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government.E) A) and D)
F) A) and C)

Question 13

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Accepted Answer

A)   decreases.
B)   increases.
C)   doesn't change because both legal and illegal production are included in GDP.
D)   doesn't change because these activities are never included in GDP.E) C) and D)
F) All of the above

Question 14

In a simple circular-flow diagram, firms

Accepted Answer

A)   purchase resources from households.
B)   purchase the output produced by households.
C)   receive income by selling resources to households.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 15

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $6200
B)   $6400
C)   $7000
D)   $8200E) A) and C)
F) A) and B)

Question 16

Figure 23-2. 
-Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Accepted Answer

X is markets for fac...

Question 17

The value of the housing services provided by the economy's owner-occupied houses is

Accepted Answer

A)   included in GDP, and the estimated rental values of the houses are used to place a value on these housing services.
B)   included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services.
C)   excluded from GDP since these services are not sold in any market.
D)   excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.E) A) and B)
F) A) and C)

Question 18

The inflation rate is the

Accepted Answer

A)   absolute change in real GDP from one period to another.
B)   percentage change in real GDP from one period to another.
C)   absolute change in the price level from one period to another.
D)   percentage change in the price level from one period to another.E) All of the above
F) A) and B)

Question 19

An identity is an equation that

Accepted Answer

A)   describes an equilibrium.
B)   pertains to macroeconomics, not to microeconomics.
C)   must be true because of how the variables in the equation are defined.
D)   involves final goods, not intermediate goods.E) None of the above
F) A) and B)

Question 20

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . 
-Refer to Table 23-10. What was this country's GDP deflator in 2017?

Accepted Answer

A)   123.4
B)   116.7
C)   120.0
D)   None of the above is correct.E) None of the above
F) A) and B)

Exam 23: Measuring a Nations Income

National income differs from net national because

Correct Answer
verified

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Correct Answer
verified

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Correct Answer
verified

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's GDP in 2010?

Correct Answer
verified

Figure 23-2. -Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Correct Answer
verified
X is markets for fac...
View Answer

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

Correct Answer
verified

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Correct Answer
verified

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Correct Answer
verified

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Correct Answer
verified

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Correct Answer
verified

Countries with low GDP per person tend to have

Correct Answer
verified

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Correct Answer
verified

In a simple circular-flow diagram, firms

Correct Answer
verified

Unlike national income, personal income

Correct Answer
verified

An identity is an equation that

Correct Answer
verified

The value of the housing services provided by the economy's owner-occupied houses is

Correct Answer
verified

The inflation rate is the

Correct Answer
verified

Which of the following statements regarding GDP is correct?

Correct Answer
verified

Exam 23: Measuring a Nations Income

National income differs from net national because

Correct AnswerverifiedShow Answer

An economy recently reported nominal GDP of 3 trillion euro and a GDP deflator of 200. What was real GDP?

Correct AnswerverifiedShow Answer

If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U.S. GDP.

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's GDP in 2010?

Correct AnswerverifiedShow Answer

Figure 23-2. -Refer to Figure 23-2. Identify the location for markets for factors of production and markets for goods and services.

Correct AnswerverifiedX is markets for fac...View AnswerShow Answer

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

Correct AnswerverifiedShow Answer

The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between

Correct AnswerverifiedShow Answer

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. What was this country's GDP deflator in 2017?

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

Correct AnswerverifiedShow Answer

Countries with low GDP per person tend to have

Correct AnswerverifiedShow Answer

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

Correct AnswerverifiedShow Answer

In a simple circular-flow diagram, firms

Correct AnswerverifiedShow Answer

Unlike national income, personal income

Correct AnswerverifiedShow Answer

An identity is an equation that

Correct AnswerverifiedShow Answer

The value of the housing services provided by the economy's owner-occupied houses is

Correct AnswerverifiedShow Answer

The inflation rate is the

Correct AnswerverifiedShow Answer

Which of the following statements regarding GDP is correct?

Correct AnswerverifiedShow Answer

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X is markets for fac...
View Answer

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