Question 1

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.

Accepted Answer

A) True 
 B)False

Question 2

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) All of the above
F) None of the above

Question 3

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)  $4015E) C) and D)
F) A) and D)

Question 4

GDP

Accepted Answer

A)  is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being.
B)  is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
C)  is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being.
D)  is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well-being.E) A) and B)
F) None of the above

Question 5

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Accepted Answer

A)  values of goods and services based on surveys of consumers.
B)  market prices.
C)  quantities purchased by a typical urban household.
D)  profits from producing goods and services.E) A) and B)
F) A) and C)

Question 6

Which of the following correctly orders U.S. income measures from largest to smallest?

Accepted Answer

A)  disposable personal income, gross national product, national income, net national product, personal income
B)  personal income, net national product, national income, gross national product, disposable personal income
C)  gross national product, net national product, national income, personal income, disposable personal income
D)  disposable personal income, personal income, national income, net national product, gross national productE) A) and B)
F) B) and C)

Question 7

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.E) A) and D)
F) B) and D)

Question 8

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

Accepted Answer

A)  nominal GDP.
B)  real GDP.
C)  the GDP deflator.
D)  GNP.E) B) and C)
F) None of the above

Question 9

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s)  does(do)  these transactions raise consumption?

Accepted Answer

A)  the first and the second
B)  the first but not the second
C)  the second but not the first
D)  neither the first nor the secondE) B) and C)
F) C) and D)

Question 10

Which of the following is included in the investment component of GDP?

Accepted Answer

A)  households' purchases of newly constructed homes
B)  net additions to firms' inventories
C)  firms' purchases of capital equipment
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 11

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

Accepted Answer

A)  -$32
B)  $32
C)  $88
D)  $120E) B) and C)
F) C) and D)

Question 12

Table 23-8
A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. 
-Refer to Table 23-8. In 2012, GDP deflator is

Accepted Answer

A)  122.
B)  134.
C)  92.
D)  113.E) A) and C)
F) All of the above

Question 13

Countries with low GDP per person tend to have

Accepted Answer

A)  lower rates of child malnutrition.
B)  fewer infants with low birth weight.
C)  higher rates of infant mortality.
D)  more access to safe drinking water.E) A) and B)
F) C) and D)

Question 14

Figure 23-1.
​ 
-Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

Accepted Answer

A)  markets for factors of production and markets for goods and services
B)  firms and households
C)  expenditures and income
D)  consumption and investmentE) A) and B)
F) A) and C)

Question 15

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Accepted Answer

A)  not included in the current quarter GDP.
B)  included in the current quarter GDP as investment.
C)  included in the current quarter GDP as consumption.
D)  included in the current quarter GDP as a statistical discrepancy.E) C) and D)
F) A) and D)

Question 16

Which of the following items is included in U.S. GDP?

Accepted Answer

A)  goods produced by foreign citizens working in the United States
B)  the difference in the price of the sale of an existing home and its original purchase price
C)  known illegal activities
D)  None of the above is included in U.S. GDP.E) B) and C)
F) A) and B)

Question 17

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 18

A consumer buys toys made in China. The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 19

Social Security payments are

Accepted Answer

A)  included in GDP because they represent current income.
B)  included in GDP because they represent potential consumption.
C)  excluded from GDP because they are not private pensions.
D)  excluded from GDP because they do not reflect the economy's production.E) A) and D)
F) A) and C)

Question 20

​When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current GDP.

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nation S Income

Table 23-8 A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the base year. -Refer to Table 23-8. In 2012, GDP deflator is

Correct AnswerverifiedShow Answer

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A consumer buys toys made in China. The value of the toys is included only in the net exports component of 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

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

Which of the following correctly orders U.S. income measures from largest to smallest?

Correct AnswerverifiedShow Answer

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.

Correct AnswerverifiedShow Answer

Figure 23-1. ​ -Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

Correct AnswerverifiedShow Answer

​When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current 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 were country A's exports in 2010?

Correct AnswerverifiedShow Answer

Countries with low GDP per person tend to have

Correct AnswerverifiedShow Answer

Retained earnings is income that

Correct AnswerverifiedShow Answer

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

Correct AnswerverifiedShow Answer

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study

Correct AnswerverifiedShow Answer

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Correct AnswerverifiedShow Answer

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Correct AnswerverifiedShow Answer

GDP

Correct AnswerverifiedShow Answer

Social Security payments are

Correct AnswerverifiedShow Answer

Which of the following items is included in U.S. 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

Figure 23-1. -Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

Correct Answer
verified

When you purchase a run-down 1965 Ford Mustang to restore and resell, the purchase of the vehicle and all restoration expenditures are included in current GDP.

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