Question 1

An Iowan receives a Social Security check for $500,which he uses to purchase a $480 television made in Japan by a Japanese firm and a $20 dinner at a local restaurant.As a result,U.S.GDP

Accepted Answer

A)   does not change.
B)   increases by $20.
C)   increases by $520.
D)   increases by $1000.E) A) and D)
F) B) and C)

Question 2

Which of the following statistic is usually regarded as the best single measure of a society's economic well-being?

Accepted Answer

A)   the unemployment rate
B)   the inflation rate
C)   gross domestic product
D)   the trade deficitE) All of the above
F) B) and C)

Question 3

In the economy of Wrexington in 2008,consumption was $4000,exports were $800,GDP was $9500,imports were $200,and investment was $1000.What were Wrexington's government purchases in 2008?

Accepted Answer

A)   $3700
B)   $3900
C)   $5100
D)   $5500E) B) and D)
F) C) and D)

Question 4

An Italian company operates a pasta restaurant in the U.S.The value of the output produced by this pasta restaurant is included in

Accepted Answer

A)   U.S.GNP and Italian GNP.
B)   U.S.GNP and Italian GDP.
C)   U.S.GDP and Italian GNP.
D)   U.S.GDP and Italian GDP.E) B) and C)
F) B) and D)

Question 5

Table 23-1
The table below contains data for the country of Wrexington for the year 2006.
 
-Refer to Table 23-1.Net national product for Wrexington in 2006 is

Accepted Answer

A)   $96.
B)   $104.
C)   $106.
D)   $114.E) B) and C)
F) A) and B)

Question 6

In the economy of Wrexington in 2008,nominal GDP was $18 billion and the GDP deflator was 120.What was Wrexington's real GDP in 2008?

Accepted Answer

A)   $6.7 billion
B)   $15 billion
C)   $21.6 billion
D)   $38 billionE) None of the above
F) A) and D)

Question 7

Which of the following examples of household spending is categorized as investment rather than consumption?

Accepted Answer

A)   expenditures on durable goods such as automobiles and refrigerators
B)   expenditures on intangibles items such as medical care
C)   expenditures on new housing
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 8

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

Accepted Answer

A)   U.S.consumption increases,U.S.net exports decrease,and U.S.GDP decreases.
B)   U.S.consumption increases,U.S.net exports decrease,and U.S.GDP is unaffected.
C)   U.S.consumption decreases,U.S.net exports increase,and U.S.GDP increases.
D)   U.S.consumption decreases,U.S.net exports increase,and U.S.GDP is unaffected.E) A) and C)
F) A) and D)

Question 9

Gross domestic product is defined as

Accepted Answer

A)   the quantity of all final goods and services demanded within a country in a given period of time.
B)   the quantity of all final goods and services supplied within a country in a given period of time.
C)   the market value of all final goods and services produced within a country in a given period of time.
D)   Both (a) and (b) are correct.E) None of the above
F) A) and D)

Question 10

If the value of an economy's imports exceeds the value of that economy's exports,then net exports is a negative number.

Accepted Answer

A) True 
 B)False

Question 11

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) B) and D)
F) B) and C)

Question 12

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Accepted Answer

A)   U.S.investment and GDP increase,but German GDP is unaffected.
B)   U.S.investment and German GDP increase,but U.S.GDP is unaffected.
C)   U.S.investment,U.S.GDP,and German GDP are unaffected,because tractors are intermediate goods.
D)   U.S.investment,U.S.GDP,and German GDP all increase.E) C) and D)
F) A) and C)

Question 13

Which of the following is included in GDP?

Accepted Answer

A)   medical marijuana purchased from a government-run pharmacy by a glaucoma patient
B)   recreational marijuana purchased from a drug dealer by a college student
C)   recreational marijuana produced and consumed by a man in his attic
D)   All of the above are included in GDP.E) A) and D)
F) None of the above

Question 14

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Accepted Answer

A) True 
 B)False

Question 15

Suppose there are only two firms in an economy: Cowhide,Inc.produces leather and sells it to Couches,Inc. ,which produces and sells leather furniture.With each $1,000 of leather that it buys from Cowhide,Inc. ,Couches,Inc.produces a couch and sells it for $3,000.Neither firm had any inventory at the beginning of 2006.During that year,Cowhide produced enough leather for 20 couches.Couches,Inc.bought 80% of that leather for $16,000 and promised to buy the remaining 20% for $4,000 in 2007.Couches,Inc.produced 16 couches during 2006 and sold each one during that year for $3,000.What was the economy's GDP for the 2006?

Accepted Answer

A)   $48,000
B)   $52,000
C)   $64,000
D)   $68,000E) A) and D)
F) A) and C)

Question 16

Which of the following is not included in U.S.GDP?

Accepted Answer

A)   unpaid cleaning and maintenance of houses
B)   services such as those provided by lawyers and hair stylists
C)   the estimated rental value of owner-occupied housing
D)   production of foreign citizens living in the United StatesE) None of the above
F) A) and B)

Question 17

A wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,

Accepted Answer

A)   U.S.investment,GDP,and GNP all increase by the same amount.
B)   U.S.investment increases,but GDP and GNP are unaffected by the purchase.
C)   U.S.investment and GDP increase by the same amount,but U.S.GNP increases by a smaller amount.
D)   U.S.investment and GNP increase by the same amount,but U.S.GDP increases by a smaller amount.E) A) and B)
F) C) and D)

Question 18

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Accepted Answer

A)   reduced measured GDP.
B)   not affected measured GDP.
C)   increased measured GDP only to the extent that the value of the restaurant meals exceeded the value of meals previously cooked at home.
D)   increased measured GDP by the full value of the restaurant meals.E) A) and D)
F) B) and C)

Question 19

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 23: Measuring a Nations Income

Which of the following is included in GDP?

Correct Answer
verified

In the actual economy,goods and services are purchased by

Correct Answer
verified

Which of the following statistic is usually regarded as the best single measure of a society's economic well-being?

Correct Answer
verified

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

Correct Answer
verified

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.Net national product for Wrexington in 2006 is

Correct Answer
verified

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Correct Answer
verified

Which of the following examples of household spending is categorized as investment rather than consumption?

Correct Answer
verified

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Correct Answer
verified

Gross domestic product is defined as

Correct Answer
verified

A wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,

Correct Answer
verified

An Italian company operates a pasta restaurant in the U.S.The value of the output produced by this pasta restaurant is included in

Correct Answer
verified

In the economy of Wrexington in 2008,nominal GDP was $18 billion and the GDP deflator was 120.What was Wrexington's real GDP in 2008?

Correct Answer
verified

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Correct Answer
verified

In the economy of Wrexington in 2008,consumption was $4000,exports were $800,GDP was $9500,imports were $200,and investment was $1000.What were Wrexington's government purchases in 2008?

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

An Iowan receives a Social Security check for $500,which he uses to purchase a $480 television made in Japan by a Japanese firm and a $20 dinner at a local restaurant.As a result,U.S.GDP

Correct Answer
verified

If the value of an economy's imports exceeds the value of that economy's exports,then net exports is a negative number.

Correct Answer
verified

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Correct Answer
verified

Which of the following is not included in U.S.GDP?

Correct Answer
verified

Correct Answer
verified

Exam 23: Measuring a Nations Income

Which of the following is included in GDP?

Correct AnswerverifiedShow Answer

In the actual economy,goods and services are purchased by

Correct AnswerverifiedShow Answer

Which of the following statistic is usually regarded as the best single measure of a society's economic well-being?

Correct AnswerverifiedShow Answer

If a U.S.citizen buys a dress made in Nepal by a Nepalese firm,then

Correct AnswerverifiedShow Answer

Table 23-1 The table below contains data for the country of Wrexington for the year 2006. -Refer to Table 23-1.Net national product for Wrexington in 2006 is

Correct AnswerverifiedShow Answer

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Correct AnswerverifiedShow Answer

Which of the following examples of household spending is categorized as investment rather than consumption?

Correct AnswerverifiedShow Answer

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Correct AnswerverifiedShow Answer

Gross domestic product is defined as

Correct AnswerverifiedShow Answer

A wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,

Correct AnswerverifiedShow Answer

An Italian company operates a pasta restaurant in the U.S.The value of the output produced by this pasta restaurant is included in

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,nominal GDP was $18 billion and the GDP deflator was 120.What was Wrexington's real GDP in 2008?

Correct AnswerverifiedShow Answer

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Correct AnswerverifiedShow Answer

In the economy of Wrexington in 2008,consumption was $4000,exports were $800,GDP was $9500,imports were $200,and investment was $1000.What were Wrexington's government purchases in 2008?

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

An Iowan receives a Social Security check for $500,which he uses to purchase a $480 television made in Japan by a Japanese firm and a $20 dinner at a local restaurant.As a result,U.S.GDP

Correct AnswerverifiedShow Answer

If the value of an economy's imports exceeds the value of that economy's exports,then net exports is a negative number.

Correct AnswerverifiedShow Answer

Changes in the GDP deflator reflect only changes in the prices of goods and services.

Correct AnswerverifiedShow Answer

Which of the following is not included in U.S.GDP?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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