Question 1

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 2

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays $2,000 in Social Security benefits to a retired person.
B)   The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
C)   The state of Nebraska pays $1,000 to help a low-income family pay its medical bills.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 3

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?

Accepted Answer

A)   Why do prices in general rise by more in some countries than in others?
B)   Why do wages differ across industries?
C)   Why do national production and income increase in some periods and not in others?
D)   How rapidly is GDP currently increasing?E) None of the above
F) All of the above

Question 4

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Accepted Answer

A)   consumption and imports
B)   consumption but not imports
C)   imports but not consumption
D)   neither consumption nor importsE) B) and C)
F) None of the above

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Whip-It manufactures blenders. In 2009 it had $50,000 of blenders in inventory. In 2010 it sold $300,000 of blenders to consumers and had $40,000 of blenders in inventory. How much did blenders produced by Whip-it add to GDP in 2010?

Accepted Answer

A)   $340,000
B)   $310,000
C)   $300,000
D)   $290,000E) B) and C)
F) A) and D)

Question 7

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Accepted Answer

A) True 
 B)False

Question 8

Between 1929 and 1933, NNP measured in current prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75.
a.What was the percentage decline in nominal NNP from 1929 to1933?
b.What was the percentage decline in real NNP from 1929 to 1933? Show your work.

Accepted Answer

a.
NNP measured in current prices is nom...

Question 9

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A)   capital
B)   consumption
C)   investment
D)   costsE) C) and D)
F) A) and C)

Question 10

In the actual economy, goods and services are purchased by

Accepted Answer

A)   households, but not firms or the government.
B)   households and firms, but not the government.
C)   households and the government, but not firms.
D)   households, firms, and the government.E) All of the above
F) A) and B)

Question 11

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Accepted Answer

A) True 
 B)False

Question 12

Gasoline is considered a final good if it is sold by a

Accepted Answer

A)   gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles.
B)   pipeline operator to a gasoline station in San Francisco.
C)   gasoline station to a motorist in Los Angeles.
D)   All of the above are correct.E) A) and C)
F) A) and D)

Question 13

Table 5-7
The table below contains data for the country of Togogo. The base year is 1974.
 
-Refer to Table 5-7. Which of the following is not correct?

Accepted Answer

A)   This economy experienced growth from 1974 to 1975.
B)   This economy experienced growth from 1975 to 1976.
C)   This economy experienced growth from 1976 to 1977.
D)   This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977.E) A) and B)
F) C) and D)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Accepted Answer

A)   both Mexican GDP and U.S. GDP.
B)   Mexican GDP, but it is not included in U.S. GDP.
C)   U.S. GDP, but it is not included in Mexican GDP.
D)   neither Mexican GDP nor U.S. GDP.E) B) and D)
F) B) and C)

Question 17

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Accepted Answer

A)   $1 million
B)   $3 million
C)   $4 million
D)   $5 millionE) None of the above
F) B) and D)

Question 18

Total income from the domestic production of final goods and services equals

Accepted Answer

A)   only household expenditures for these goods.
B)   only household and business expenditures for these goods.
C)   only household and government expenditures for these goods.
D)   the expenditures for these goods whoever buys them.E) B) and D)
F) A) and C)

Question 19

Income generated by a nation's domestic production

Accepted Answer

A)   is less than its domestic production.
B)   is equal to its domestic production.
C)   is greater than its domestic production.
D)   could be less than, equal to, or greater than its domestic production.E) A) and D)
F) A) and C)

Question 20

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

Exam 5: Measuring a Nations Income

In the actual economy, goods and services are purchased by

Correct Answer
verified

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Correct Answer
verified

Periods during which real GDP rises are called recessions.

Correct Answer
verified

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

Correct Answer
verified

Total income from the domestic production of final goods and services equals

Correct Answer
verified

Which of the following items is counted as part of government purchases?

Correct Answer
verified

Gasoline is considered a final good if it is sold by a

Correct Answer
verified

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Correct Answer
verified

Correct Answer
verified
a.
NNP measured in current prices is nom...
View Answer

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

Correct Answer
verified

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Correct Answer
verified

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct Answer
verified

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Correct Answer
verified

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.

Correct Answer
verified

Income generated by a nation's domestic production

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

Whip-It manufactures blenders. In 2009 it had $50,000 of blenders in inventory. In 2010 it sold $300,000 of blenders to consumers and had $40,000 of blenders in inventory. How much did blenders produced by Whip-it add to GDP in 2010?

Correct Answer
verified

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?

Correct Answer
verified

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Correct Answer
verified

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. Which of the following is not correct?

Correct Answer
verified

Exam 5: Measuring a Nations Income

In the actual economy, goods and services are purchased by

Correct AnswerverifiedShow Answer

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Correct AnswerverifiedShow Answer

Periods during which real GDP rises are called recessions.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Total income from the domestic production of final goods and services equals

Correct AnswerverifiedShow Answer

Which of the following items is counted as part of government purchases?

Correct AnswerverifiedShow Answer

Gasoline is considered a final good if it is sold by a

Correct AnswerverifiedShow Answer

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Correct AnswerverifiedShow Answer

Correct Answerverifieda.NNP measured in current prices is nom...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Recessions are associated with lower incomes, rising unemployment, and falling profits.

Correct AnswerverifiedShow Answer

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct AnswerverifiedShow Answer

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Income generated by a nation's domestic production

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

Whip-It manufactures blenders. In 2009 it had $50,000 of blenders in inventory. In 2010 it sold $300,000 of blenders to consumers and had $40,000 of blenders in inventory. How much did blenders produced by Whip-it add to GDP in 2010?

Correct AnswerverifiedShow Answer

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?

Correct AnswerverifiedShow Answer

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

Correct AnswerverifiedShow Answer

Table 5-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 5-7. Which of the following is not correct?

Correct AnswerverifiedShow Answer

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a.
NNP measured in current prices is nom...
View Answer

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