Question 1

The difference between the sale value of the product and the value of the inputs that went into it is called the:

Accepted Answer

A)   value-added of that stage of production.
B)   value of the final product.
C)   profit margin.
D)   mark up.E) A) and B)
F) A) and C)

Question 2

GDP per capita is:

Accepted Answer

A)   highly correlated with quality of life.
B)   perfectly correlated with quality of life.
C)   loosely correlated with quality of life.
D)   negatively correlated with quality of life.E) A) and D)
F) None of the above

Question 3

Kelly is a U.S. citizen who works for Burton located in Germany. Kelly's work contributes to:

Accepted Answer

A)   U.S. GDP, but not U.S. GNP.
B)   U.S. GNP, but not U.S. GDP.
C)   Germany's GNP and U.S. GDP.
D)   U.S. GNP and U.S. GDP.E) A) and B)
F) C) and D)

Question 4

Spending on imports should get _________ GDP, and spending on exports should be __________.

Accepted Answer

A)   subtracted from; included
B)   included in; included as well
C)   subtracted from; subtracted as well
D)   included in; subtractedE) None of the above
F) All of the above

Question 5

GDP could be calculated over:

Accepted Answer

A)   a month.
B)   a quarter.
C)   a year.
D)   any time period.E) All of the above
F) None of the above

Question 6

An American citizen works for a U.S.-owned architectural firm located in Mexico. This architect will contribute toward:

Accepted Answer

A)   U.S. GDP since he's a U.S. citizen.
B)   U.S. GDP since he's working for a U.S. firm.
C)   Mexico's GDP since he's working in Mexico.
D)   both Mexico's and U.S. GDP.E) All of the above
F) B) and D)

Question 7

Which approach to calculating GDP is especially useful in clarifying the resale of existing goods?

Accepted Answer

A)   The expenditure approach
B)   The income approach
C)   The value-added approach
D)   Any of these measurements will allow that kind of clarification equally well.E) A) and B)
F) None of the above

Question 8

Ace has always been a top student, so it was no surprise he won a $1,500 scholarship from the company where he worked summers to help with college expenses. Ace decides to spend his scholarship money on a new Apple MacBook. How will GDP be affected by Ace's recent purchases?

Accepted Answer

A)   Consumption will go up by $1,500, because a computer is a durable good.
B)   Investment will go up by $1,500, because a computer is a durable good.
C)   GDP will not be affected, since Ace acquired the computer with scholarship money.
D)   Consumption will go up by $1,500, because a computer is a nondurable good.E) B) and C)
F) B) and D)

Question 9

U.S. Gross National Product includes goods produced by:

Accepted Answer

A)   foreign firms on U.S. soil.
B)   U.S. firms on foreign soil.
C)   foreign firms on foreign soil.
D)   None of these statements is true.E) A) and B)
F) None of the above

Question 10

GDP uses the market value of goods and services because it:

Accepted Answer

A)   provides a common valuation that allows us to compare one economy to another.
B)   provides the opportunity to compare lists of outputs to see who produced more.
C)   is the only data that can be gathered about goods and services.
D)   markets are the only way to value goods and services.E) A) and C)
F) C) and D)

Question 11

Net exports will be negative if:

Accepted Answer

A)   imports exceed exports.
B)   exports exceed imports.
C)   it is a closed economy.
D)   it is an open economy.E) All of the above
F) A) and C)

Question 12

If consumption is $8 billion, investments is $4 billion, government purchases are $2 billion, imports are $1 billion, and exports are $2 billion, GDP must equal:

Accepted Answer

A)   $16 billion.
B)   $17 billion.
C)   $15 billion.
D)   $14 billion.E) B) and C)
F) A) and B)

Question 13

If the GDP per capita is $2,000, and the population is 150,000 people, then the GDP must be:

Accepted Answer

A)   $75.
B)   $7,500.
C)   $300,000,000.
D)   $300,000.E) A) and B)
F) A) and C)

Question 14

In order to estimate the current annual GDP, economists:

Accepted Answer

A)   multiply the quarterly estimate by four.
B)   adjust quarterly GDP estimates to account for seasonal patterns.
C)   take an average of the last four quarters measured.
D)   adjust it for changes in price level.E) C) and D)
F) All of the above

Question 15

On average across the world, the underground economy is worth about:

Accepted Answer

A)   one-third of GDP.
B)   one-tenth of GDP.
C)   one-quarter of GDP.
D)   one-half of GDP.E) All of the above
F) A) and B)

Question 16

Quarterly GDP:

Accepted Answer

A)   is always shown as a seasonally adjusted estimate for an annual rate.
B)   takes account of unpredictable seasonal patterns in order to guess at annual GDP.
C)   is adjusted for predictable, seasonal variation to predict what GDP would be if the economy continues at its current pace.
D)   is the only representation of GDP that economists view as credible.E) A) and B)
F) A) and C)

Question 17

Which of the following is not an intermediate good?

Accepted Answer

A)   Tires purchased by Ford to put on their new Explorers.
B)   Tires sold by Goodyear to put on your Explorer.
C)   Tomatoes used by Ortega to make their salsa.
D)   Beef purchased by McDonald's to make a Big Mac.E) None of the above
F) A) and B)

Question 18

Suppose you are given the following annual deflator information for the US (https://fred.stlouisfed.org) . Using the information from the table the rate of inflation from 2014 to 2015 was:

Accepted Answer

A)   3.1%
B)   1.2%
C)   1%
D)   0.92E) A) and C)
F) B) and C)

Question 19

An activity that would not be included in GDP would be:

Accepted Answer

A)   a sweater you knit for your roommate for her birthday.
B)   getting tomatoes from your garden and making salsa with them.
C)   paying a company forcleaning your house.
D)   None of these would be included in GDP.E) B) and D)
F) B) and C)

Question 20

Assume the table has recorded the total output and prices of the only two goods produced. Looking at the changes in real GDP and nominal GDP from 2001 to 2002, we can conclude:

Accepted Answer

A)   output and prices increased.
B)   only output increased.
C)   only prices increased.
D)   output increased, but prices decreased.E) A) and B)
F) A) and C)

Exam 7: Measuring GDP

An American citizen works for a U.S.-owned architectural firm located in Mexico. This architect will contribute toward:

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GDP could be calculated over:

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Net exports will be negative if:

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Suppose you are given the following annual deflator information for the US (https://fred.stlouisfed.org) . Using the information from the table the rate of inflation from 2014 to 2015 was:

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Which of the following is not an intermediate good?

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GDP uses the market value of goods and services because it:

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Spending on imports should get _________ GDP, and spending on exports should be __________.

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Kelly is a U.S. citizen who works for Burton located in Germany. Kelly's work contributes to:

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Which approach to calculating GDP is especially useful in clarifying the resale of existing goods?

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Ace has always been a top student, so it was no surprise he won a $1,500 scholarship from the company where he worked summers to help with college expenses. Ace decides to spend his scholarship money on a new Apple MacBook. How will GDP be affected by Ace's recent purchases?

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If the GDP per capita is $2,000, and the population is 150,000 people, then the GDP must be:

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In order to estimate the current annual GDP, economists:

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An activity that would not be included in GDP would be:

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On average across the world, the underground economy is worth about:

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GDP per capita is:

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U.S. Gross National Product includes goods produced by:

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The difference between the sale value of the product and the value of the inputs that went into it is called the:

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Assume the table has recorded the total output and prices of the only two goods produced. Looking at the changes in real GDP and nominal GDP from 2001 to 2002, we can conclude:

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Quarterly GDP:

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If consumption is $8 billion, investments is $4 billion, government purchases are $2 billion, imports are $1 billion, and exports are $2 billion, GDP must equal:

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Spending on imports should get _ GDP, and spending on exports should be __.

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