Question 1

If in some year real GDP was $5 trillion and the GDP deflator was 200, what was nominal GDP?

Accepted Answer

A)   $2.5 trillion.
B)   $10 trillion.
C)   $40 trillion.
D)   $100 trillion.

Question 2

Much of macroeconomics attempts to explain

Accepted Answer

A)   changes in the price of oil and gasoline.
B)   long-run growth and short-run fluctuations in real GDP.
C)   changes in the growth rate of state government spending.
D)   changes in the prices and quantities of individual goods and services.

Question 3

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

Accepted Answer

A)   104.1 so prices are higher than in the base year.
B)   104.1 so prices are lower than in the base year.
C)   96.1 so prices are higher than in the base year.
D)   96.1 so prices are lower than in the base year.

Question 4

Underground economic activity as a percentage of GDP was highest in

Accepted Answer

A)   Bolivia.
B)   Mexico.
C)   Australia.
D)   the United States.

Question 5

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)   in government expenditures and exports.
B)   government expenditures and imports.
C)   exports, but not government expenditures.
D)   imports, but not government expenditures.

Question 6

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Accepted Answer

A)   the amount she paid to buy the new parts
B)   the amount she paid to buy new parts and gasoline
C)   the amount she paid to buy new parts, gasoline, and oil.
D)   the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.

Question 7

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

Accepted Answer

A)   $500.
B)   $700.
C)   $900.
D)   $1200.

Question 8

onsumer goods that are produced, go into inventory, and are not sold during the current period are

Accepted Answer

A)   counted as intermediate goods and so are not included in current period GDP.
B)   counted in current period GDP only if the firm that produced them sells them to another firm.
C)   included in current period GDP as inventory investment.
D)   included in current period GDP as consumption.

Question 9

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Accepted Answer

A) True 
 B)False

Question 10

A macroeconomist is interested in

Accepted Answer

A)   explaining how changes in sellers' behavior affect prices of a particular good.
B)   explaining price changes in a particular market.
C)   explaining why the unemployment rate is higher.
D)   All of the above are correct.

Question 11

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 12

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Accepted Answer

A) True 
 B)False

Question 13

Transfer payments are

Accepted Answer

A)   included in GDP because they represent income to individuals.
B)   included in GDP because they eventually will be spent on consumption.
C)   not included in GDP because they are not payments for currently produced goods or services.
D)   not included in GDP because taxes will have to be raised to pay for them.

Question 14

Most goods and services produced at home

Accepted Answer

A)   and most goods and services produced illegally are included in GDP.
B)   are included in GDP while most goods and services produced illegally are excluded from GDP.
C)   are excluded from GDP while most goods and services produced illegally are included in GDP
D)   and most goods and services produced illegally are excluded from GDP.

Question 15

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 was the growth rate of real GDP for 1930?

Accepted Answer

A)   -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
B)   -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP.
C)   -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP.
D)   -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.

Question 16

Real GDP is a better gauge of economic well-being than is nominal GDP.

Accepted Answer

A) True 
 B)False

Question 17

The government purchases component of GDP includes salaries paid to soldiers but not Social Security benefits paid to the elderly.

Accepted Answer

A) True 
 B)False

Question 18

Retained earnings is income that

Accepted Answer

A)   households retain after paying taxes.
B)   businesses retain after paying taxes.
C)   corporations have earned but have not used to invest in plant, equipment, and inventories.
D)   corporations have earned but have not paid out to their owners.

Question 19

U.S. GDP

Accepted Answer

A)   includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.
B)   includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries.
C)   excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries.
D)   excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.

Question 20

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.

Exam 10: Measuring a Nations Income

The government purchases component of GDP includes salaries paid to soldiers but not Social Security benefits paid to the elderly.

Correct AnswerverifiedShow Answer

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

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

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 105 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Correct AnswerverifiedShow Answer

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 was the growth rate of real GDP for 1930?

Correct AnswerverifiedShow Answer

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Correct AnswerverifiedShow Answer

onsumer goods that are produced, go into inventory, and are not sold during the current period are

Correct AnswerverifiedShow 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. -Refer to Table 23-6. In 2013, this country's real GDP was

Correct AnswerverifiedShow Answer

Transfer payments are

Correct AnswerverifiedShow Answer

Most goods and services produced at home

Correct AnswerverifiedShow Answer

Retained earnings is income that

Correct AnswerverifiedShow Answer

Much of macroeconomics attempts to explain

Correct AnswerverifiedShow Answer

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

Correct AnswerverifiedShow Answer

A macroeconomist is interested in

Correct AnswerverifiedShow Answer

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Correct AnswerverifiedShow Answer

Underground economic activity as a percentage of GDP was highest in

Correct AnswerverifiedShow Answer

If in some year real GDP was $5 trillion and the GDP deflator was 200, what was nominal GDP?

Correct AnswerverifiedShow Answer

U.S. GDP

Correct AnswerverifiedShow Answer

Real GDP is a better gauge of economic well-being than is nominal GDP.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified