Question 1

A family sells the house they have lived in for two years to a friend.They received $150,000 and paid $120,000 two years ago.This transaction

Accepted Answer

A)  increases GDP by $150,000
B)  increases GDP by $30,000
C)  has no effect on GDP because the house was not made this year
D)  has no effect on GDP because the house is an intermediate goodE) None of the above
F) A) and B)

Question 2

Suppose that for the economy of Springfield,we have the following information for 2013: consumption expenditures = $4,000;wages = $3,500;gross private domestic investment = $1,300;government expenditures = $2,000;exports = $900;imports = $1,100.Using the expenditure approach what would the Gross Domestic Product (GDP) be for Springfield in 2013?

Accepted Answer

A)  $6,200
B)  $7,100
C)  $7,500
D)  $10,600
E)  $12,800F) B) and D)
G) All of the above

Question 3

Profits

Accepted Answer

A)  are a cost of doing business because entrepreneurs would not incur the risk of starting a business if they didn't expect to earn profits.
B)  are a cost of doing business because they are payments to others.
C)  are not a cost of doing business because they are owed to resource owners.
D)  are not a cost of doing business because they are often zero or negative.E) B) and C)
F) A) and D)

Question 4

Which of the following is NOT included when calculating GDP?

Accepted Answer

A)  the dollar value of a new book
B)  the dollar value of a new iPod
C)  the dollar value of a newly issued corporate bond
D)  the dollar value of tuition expenditures at a community collegeE) B) and C)
F) A) and C)

Question 5

When economists discuss the nominal value of an economic variable,the variable is

Accepted Answer

A)  expressed in current dollars.
B)  expressed as an index figure.
C)  adjusted for a changing price level.
D)  expressed as a percentage.E) All of the above
F) A) and D)

Question 6

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes) is

Accepted Answer

A)  consumption + investment + government spending + net exports
B)  wages + rent + interest + profits
C)  wages + rent + interest + profits + indirect business taxes
D)  wages + rent + interest + profits + indirect business taxes + depreciationE) B) and D)
F) None of the above

Question 7

-Using the data in the above table,what is the real GDP for year 2013 (in billions of constant dollars) ?

Accepted Answer

A)  9,250
B)  8,500
C)  7,708
D)  8,950E) A) and D)
F) C) and D)

Question 8

The values of variables such as GDP expressed in current dollars are referred to as

Accepted Answer

A)  the price index.
B)  a deflator.
C)  nominal values.
D)  real values.E) A) and B)
F) C) and D)

Question 9

The value added method of calculating GDP means

Accepted Answer

A)  adding up the market values of all intermediate goods.
B)  calculating the percentage changes in the GDP between two years.
C)  adding up the incomes of all businesses in a given year.
D)  adding up the difference between the sale price and the value of intermediate goods of each product at every stage of production.E) A) and C)
F) A) and D)

Question 10

-Refer to the above table.Real GDP for year 2007 was

Accepted Answer

A)  $4819.6 billion.
B)  $5222.2 billion.
C)  $4617.3 billion.
D)  uncertain without more information.E) A) and C)
F) All of the above

Question 11

-Refer to the above table.The production of this good has been through the first 3 stages of production.What is the total value added in Stage 1 through 3?

Accepted Answer

A)  $0.75
B)  $0.43
C)  $0.07
D)  Cannot be computed without more information.E) C) and D)
F) A) and D)

Question 12

When GDP and other national income accounts are measured in nominal values,then they

Accepted Answer

A)  are measured in current market prices.
B)  are measured in real values.
C)  are not comparable because they are not in real terms.
D)  should be converted into money values before comparing them over time.E) C) and D)
F) A) and B)

Question 13

Suppose the total value of all assets in the Country X is $10 trillion.In 2013,the total value of all final services produced in Country X was $150 billion,the total value of all final goods produced in County X was $350 billion,and the total value of all final goods and services produced by County X's firms in other countries was $100 billion.In this situation,CountryX's Gross Domestic Product for 2013 was

Accepted Answer

A)  $600 billion.
B)  $510 billion.
C)  $500 billion.
D)  $10.5 trillion.E) None of the above
F) All of the above

Question 14

Gross Domestic Product (GDP) is

Accepted Answer

A)  the total wholesale value of all final goods and services produced by factors of production owned by citizens of a nation.
B)  the total market value of all services produced by factors of production located within a nation's borders.
C)  the total market value of all goods produced within a nation's borders.
D)  the total market value of all final goods and services produced by factors of production located within a nation's borders.E) A) and B)
F) A) and C)

Question 15

Gross domestic product is a measure of

Accepted Answer

A)  the total value of all transactions in U.S.markets.
B)  the added value of production.
C)  the dollar value of final goods and services produced in the United States.
D)  the dollar value of the aggregate measure of business as measured by the Dow Jones Industrial Average.E) A) and D)
F) B) and C)

Question 16

Net exports is equal to

Accepted Answer

A)  total exports minus total imports.
B)  total imports minus total exports.
C)  total exports adjusted for price changes.
D)  total exports minus transfer payments.E) A) and D)
F) All of the above

Question 17

A good goes through three stages of production.The value added at stage 1 is $3;the value added at stage 2 is $5;the value added at stage 3 is $2.What is the retail price of the good?

Accepted Answer

A)  $2
B)  $10
C)  $20
D)  Cannot be determined based on the information given.E) A) and C)
F) A) and B)

Question 18

Which of the following statements is FALSE?

Accepted Answer

A)  The value of total income is equal in value to total output because profit is a cost of production.
B)  In the circular flow model,households sell factor services to businesses in return for factor payments.
C)  Businesses sell goods and services to households who use their income to pay for them.
D)  Total income is always greater than total output.E) None of the above
F) C) and D)

Question 19

Explain how disposable personal income is derived from Gross Domestic Product.

Accepted Answer

Gross domestic product is the same thing...

Question 20

The most meaningful way to compare per capita Gross Domestic Product (GDP) across countries is to

Accepted Answer

A)  use foreign exchange rates to convert each country's per capita Gross Domestic Product (GDP) into dollars.Then compare.
B)  first adjust each country's per capita Gross Domestic Product (GDP) to exclude all the goods and services that are not exchanged with other countries.
C)  assume that the cost of living in each country is the same as the United States' cost of living.
D)  first use purchasing power parity to factor in each country's true cost of living.E) All of the above
F) A) and D)

Exam 8: Measuring the Economys Performance

Correct Answer
verified

When economists discuss the nominal value of an economic variable,the variable is

Correct Answer
verified

Net exports is equal to

Correct Answer
verified

Explain how disposable personal income is derived from Gross Domestic Product.

Correct Answer
verified
Gross domestic product is the same thing...
View Answer

Correct Answer
verified

A family sells the house they have lived in for two years to a friend.They received $150,000 and paid $120,000 two years ago.This transaction

Correct Answer
verified

When GDP and other national income accounts are measured in nominal values,then they

Correct Answer
verified

Profits

Correct Answer
verified

The values of variables such as GDP expressed in current dollars are referred to as

Correct Answer
verified

Which of the following is NOT included when calculating GDP?

Correct Answer
verified

-Refer to the above table.The production of this good has been through the first 3 stages of production.What is the total value added in Stage 1 through 3?

Correct Answer
verified

-Using the data in the above table,what is the real GDP for year 2013 (in billions of constant dollars) ?

Correct Answer
verified

Gross Domestic Product (GDP) is

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

The most meaningful way to compare per capita Gross Domestic Product (GDP) across countries is to

Correct Answer
verified

-Refer to the above table.Real GDP for year 2007 was

Correct Answer
verified

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes) is

Correct Answer
verified

The value added method of calculating GDP means

Correct Answer
verified

Gross domestic product is a measure of

Correct Answer
verified

A good goes through three stages of production.The value added at stage 1 is $3;the value added at stage 2 is $5;the value added at stage 3 is $2.What is the retail price of the good?

Correct Answer
verified

Exam 8: Measuring the Economys Performance

Correct AnswerverifiedShow Answer

When economists discuss the nominal value of an economic variable,the variable is

Correct AnswerverifiedShow Answer

Net exports is equal to

Correct AnswerverifiedShow Answer

Explain how disposable personal income is derived from Gross Domestic Product.

Correct AnswerverifiedGross domestic product is the same thing...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A family sells the house they have lived in for two years to a friend.They received $150,000 and paid $120,000 two years ago.This transaction

Correct AnswerverifiedShow Answer

When GDP and other national income accounts are measured in nominal values,then they

Correct AnswerverifiedShow Answer

Profits

Correct AnswerverifiedShow Answer

The values of variables such as GDP expressed in current dollars are referred to as

Correct AnswerverifiedShow Answer

Which of the following is NOT included when calculating GDP?

Correct AnswerverifiedShow Answer

-Refer to the above table.The production of this good has been through the first 3 stages of production.What is the total value added in Stage 1 through 3?

Correct AnswerverifiedShow Answer

-Using the data in the above table,what is the real GDP for year 2013 (in billions of constant dollars) ?

Correct AnswerverifiedShow Answer

Gross Domestic Product (GDP) is

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

The most meaningful way to compare per capita Gross Domestic Product (GDP) across countries is to

Correct AnswerverifiedShow Answer

-Refer to the above table.Real GDP for year 2007 was

Correct AnswerverifiedShow Answer

The appropriate formula for computing Gross Domestic Product using the income approach (excluding depreciation and indirect income taxes) is

Correct AnswerverifiedShow Answer

The value added method of calculating GDP means

Correct AnswerverifiedShow Answer

Gross domestic product is a measure of

Correct AnswerverifiedShow Answer

A good goes through three stages of production.The value added at stage 1 is $3;the value added at stage 2 is $5;the value added at stage 3 is $2.What is the retail price of the good?

Correct AnswerverifiedShow Answer

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Gross domestic product is the same thing...
View Answer

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