Question 1

Tesla builds a new vehicle, and completes it in December 2015. It sells the vehicle in January 2016. The value of this vehicle affects U.S. GDP

Accepted Answer

A)  ​for 2015 only, since it was completed in December of 2015.
B)  ​for both 2015 and 2016.
C)  ​for 2016 only, when it is sold to the buyer.
D)  ​for neither year if it is sold to a citizen of Canada.E) B) and D)
F) None of the above

Question 2

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 .
Prices and Quantities 
-Refer to Table 23-6. In 2010, this country's GDP deflator was

Accepted Answer

A)  41.9.
B)  100.
C)  165.0.
D)  This cannot be calculated from the information given.E) A) and B)
F) A) and D)

Question 3

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

Accepted Answer

A)  $2.72 billion.
B)  $17 billion.
C)  $36.8 billion.
D)  $43 billion.E) A) and B)
F) B) and D)

Question 4

Changes in nominal GDP reflect

Accepted Answer

A)  only changes in prices.
B)  only changes in the amounts being produced.
C)  both changes in prices and changes in the amounts being produced.
D)  neither changes in prices nor changes in the amounts being produced.E) A) and C)
F) B) and C)

Question 5

Table 23-11
Table 23-12
A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. 
-Refer to Table 23-12. Calculate the GDP deflator for 2012 and 2013.

Accepted Answer

GDP deflator is 127....

Question 6

The government of a country, which has adopted American GDP accounting conventions, reported that seasonally adjusted GDP in quarter 3 was $48 billion at an annual rate. This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Accepted Answer

A)  $4 billion.
B)  $12 billion.
C)  $16 billion.
D)  $48 billion.E) B) and C)
F) A) and D)

Question 7

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

Accepted Answer

A)  increases by $40.
B)  increases by $220.
C)  increases by $280.
D)  increases by $1500.E) A) and B)
F) None of the above

Question 8

Which of the following is not included in the investment component of GDP?

Accepted Answer

A)  The purchase of 100 shares of stock.
B)  The purchase of a $1000 bond.
C)  A firm's purchase of a used van to use for deliveries.
D)  None of the above are included in the investment component of GDP.E) C) and D)
F) A) and D)

Question 9

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)  consumption, since the goods will be sold to consumers in another period.
B)  intermediate goods, and so is not included in that year's GDP.
C)  investment, since GDP aims to measure the value of the economy's production that year.
D)  spending on durable goods, since the goods could not be inventoried unless they were durable.E) B) and C)
F) A) and D)

Question 10

Tom is an organic gardener. For several years, he produced only for his own consumption, but this year he has sold his vegetables at a farmer's market. The vegetables Tom produces

Accepted Answer

A)  ​are not included in GDP, not for this year nor for previous years.
B)  ​are included in GDP for this year, but prior to this year the value of his vegetables was not included in GDP.
C)  ​would be included in GDP only if the vegetables were registered with the Department of Agriculture.
D)  ​are not part of GDP, since vegetables are not a good included in GDP.E) B) and D)
F) None of the above

Question 11

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Accepted Answer

A)  87.5.
B)  114.3.
C)  400.
D)  896.E) B) and D)
F) All of the above

Question 12

The GDP deflator for years subsequent to the base year measures the change in

Accepted Answer

A)  nominal GDP from the base year that cannot be attributable to a change in real GDP.
B)  real GDP from the base year that cannot be attributable to a change in nominal GDP.
C)  nominal GDP from the base year that cannot be attributable to a change in prices.
D)  real GDP from the base year that cannot be attributable to a change in prices.E) C) and D)
F) B) and C)

Question 13

For an economy as a whole,

Accepted Answer

A)  wages must equal profit.
B)  consumption must equal income.
C)  income must equal expenditure.
D)  consumption must equal saving.E) C) and D)
F) All of the above

Question 14

Table 23-9
A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. 
-Refer to Table 23-9. In 2009, this country's

Accepted Answer

A)  real GDP was $250, and the GDP deflator was 125.
B)  real GDP was $250, and the GDP deflator was 120.
C)  real GDP was $240, and the GDP deflator was 125.
D)  real GDP was $240, and the GDP deflator was 120.E) A) and B)
F) B) and C)

Question 15

Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015.
Prices and Quantities 
-Refer to Table 23-5. In 2018, this country's

Accepted Answer

A)  real GDP was $1080, and the GDP deflator was 156.3.
B)  real GDP was $1080, and the GDP deflator was 177.8.
C)  real GDP was $1920, and the GDP deflator was 177.8.
D)  real GDP was $1920, and the GDP deflator was 156.3.E) A) and B)
F) A) and C)

Question 16

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Accepted Answer

A)  The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.
B)  The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
C)  The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
D)  The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.E) A) and C)
F) B) and C)

Question 17

In computing GDP, market prices are used to value final goods and services because

Accepted Answer

A)  market prices do not change much over time, so it is easy to make comparisons between years.
B)  market prices reflect the values of goods and services.
C)  market prices reflect the quantity sold.
D)  None of the above is correct; market prices are not used in computing GDP.E) B) and D)
F) C) and D)

Question 18

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

Accepted Answer

A)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government purchases.
B)  The 2013 payment is included in 2013 GDP as government purchases, but the 2014 payment is not included in 2014 GDP.
C)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is included in 2014 GDP as government transfer payments.
D)  The 2013 payment is included in 2013 GDP as government purchases, and the 2014 payment is allocated to previous years' GDP according to the amount of work performed by the economist each year.E) B) and C)
F) A) and D)

Question 19

Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932. 
-Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

Accepted Answer

A)  8.09, -11.7
B)  8.09, -13.3
C)  1236.46, 11.7
D)  1236.46, 13.3E) A) and D)
F) A) and B)

Question 20

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 B)
F) A) and C)

Exam 23: Measuring a Nation S Income

Which of the following is not included in the investment component of GDP?

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Table 23-9 A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. -Refer to Table 23-9. In 2009, this country's

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The GDP deflator for years subsequent to the base year measures the change in

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Table 23-4 The table below reports nominal and real GDP for the U.S. from 1929 to 1932. -Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932?

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Table 23-11 Table 23-12 A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-12. Calculate the GDP deflator for 2012 and 2013.

Correct AnswerverifiedGDP deflator is 127....View AnswerShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013 . Prices and Quantities -Refer to Table 23-6. In 2010, this country's GDP deflator was

Correct AnswerverifiedShow Answer

In computing GDP, market prices are used to value final goods and services because

Correct AnswerverifiedShow Answer

The value of goods added to a firm's inventory in a certain year is treated as

Correct AnswerverifiedShow Answer

Changes in nominal GDP reflect

Correct AnswerverifiedShow Answer

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

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

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

Correct AnswerverifiedShow Answer

Tom is an organic gardener. For several years, he produced only for his own consumption, but this year he has sold his vegetables at a farmer's market. The vegetables Tom produces

Correct AnswerverifiedShow Answer

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

Correct AnswerverifiedShow Answer

For an economy as a whole,

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Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. In 2018, this country's

Correct AnswerverifiedShow Answer

Tesla builds a new vehicle, and completes it in December 2015. It sells the vehicle in January 2016. The value of this vehicle affects U.S. GDP

Correct AnswerverifiedShow Answer

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GDP deflator is 127....
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