Question 1

Table 23-2
The table below contains data for country A for the year 2010. 
-Refer to Table 23-2. What was country A's consumption in 2010?

Accepted Answer

A)   $2018
B)   $3010
C)   $3311
D)   $4015

Question 2

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

Accepted Answer

A)   GDP would definitely increase, despite the fact that GDP includes environmental quality.
B)   GDP would definitely decrease because GDP includes environmental quality.
C)   GDP would definitely increase because GDP excludes environmental quality.
D)   GDP could either increase or decrease because GDP excludes environmental quality.

Question 3

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 4

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 5

Which of the following is not a correct statement about the growth of real GDP in the U.S. economy?

Accepted Answer

A)   Real GDP in 2009 was almost four times its 1965 level.
B)   Growth was steady between 1965 and 2009.
C)   Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did.
D)   The output of goods and services produced grew on average about 3 percent per year between 1965 and 2009.

Question 6

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities 
-Refer to Table 23-11.
What was the inflation rate for 2011? Show your work.

Accepted Answer

For 2010 the GDP Deflator was 112. Nomin...

Question 7

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Accepted Answer

A)   $700
B)   -$700
C)   $500.
D)   $500

Question 8

An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?

Accepted Answer

A)   The value of the goods and services produced by the restaurant is included in both French GDP and U.S. GDP.
B)   The value added by American workers and equipment in France is included in U.S. GDP and the value added by French workers and equipment is added to French GDP.
C)   The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S. GDP.
D)   The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in French GDP.

Question 9

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities 
-Refer to Table 23-11.
What was the inflation rate for 2010? Show your work.

Accepted Answer

2009 is the base year so the GDP Deflato...

Question 10

The consumption component of GDP includes spending on

Accepted Answer

A)   durable goods and nondurable goods, but not spending on services.
B)   durable goods and services, but not spending on nondurable goods.
C)   nondurable goods and services, but not spending on durable goods.
D)   durable goods, nondurable goods, and services.

Question 11

GDP per person tells us the income and expenditure of the

Accepted Answer

A)   richest person in the economy.
B)   poorest person in the economy.
C)   average person in the economy.
D)   entire economy.

Question 12

In the economy of Talikastan in 2015, consumption was $3000, exports were $400, GDP was $5000, imports were $500, and investment was $1400. What were Talikastan's government purchases in 2015?

Accepted Answer

A)   $60
B)   $500
C)   $700
D)   $1500

Question 13

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 2011, this country's real GDP was

Accepted Answer

A)   $320.
B)   $440.
C)   $760.
D)   $770.

Question 14

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 15

Changes in the GDP deflator 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.

Question 16

Nominal GDP will definitely increase when

Accepted Answer

A)   prices increase and output increases.
B)   prices increase and output decreases.
C)   prices decrease and output increases.
D)   All of the above are correct.

Question 17

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Accepted Answer

A)   1/3 times as much to GDP as the production of good B.
B)   3/2 times as much to GDP as the production of good B.
C)   3 times as much to GDP as the production of good B.
D)   2/3 times as much to GDP as production of good B.

Question 18

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $218
B)   $2500
C)   $1520
D)   $2100

Question 19

Which of the following statements about GDP is correct?

Accepted Answer

A)   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
B)   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
C)   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
D)   Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices.

Question 20

Household spending on education is included in

Accepted Answer

A)   consumption, although it might be argued that it would fit better in investment.
B)   investment, although it might be argued that it would fit better in consumption.
C)   government spending, based on the fact that most higher-education students attend publicly-supported colleges and universities.
D)   None of the above is correct; in general, household spending on services is not included in any component of GDP.

Exam 23: Measuring a Nations Income

Household spending on education is included in

Correct AnswerverifiedShow Answer

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was the inflation rate for 2011? Show your work.

Correct AnswerverifiedFor 2010 the GDP Deflator was 112. Nomin...View AnswerShow Answer

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Correct AnswerverifiedShow Answer

An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

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 2011, this country's real GDP was

Correct AnswerverifiedShow Answer

Which of the following statements about GDP is correct?

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In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

Correct AnswerverifiedShow Answer

Which of the following is not a correct statement about the growth of real GDP in the U.S. economy?

Correct AnswerverifiedShow Answer

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

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

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was the inflation rate for 2010? Show your work.

Correct Answerverified2009 is the base year so the GDP Deflato...View AnswerShow Answer

The consumption component of GDP includes spending on

Correct AnswerverifiedShow Answer

Nominal GDP will definitely increase when

Correct AnswerverifiedShow Answer

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GDP.

Correct AnswerverifiedShow Answer

Table 23-2 The table below contains data for country A for the year 2010. -Refer to Table 23-2. What was country A's consumption in 2010?

Correct AnswerverifiedShow Answer

Changes in the GDP deflator reflect

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In the economy of Talikastan in 2015, consumption was $3000, exports were $400, GDP was $5000, imports were $500, and investment was $1400. What were Talikastan's government purchases in 2015?

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

GDP per person tells us the income and expenditure of the

Correct AnswerverifiedShow Answer

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For 2010 the GDP Deflator was 112. Nomin...
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2009 is the base year so the GDP Deflato...
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