Question 1

Table 23-10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 .
 
-Refer to Table 23-10. In which year was this country's nominal GDP highest?

Accepted Answer

A)   2014
B)   2015
C)   2016
D)   2017E) A) and C)
F) All of the above

Question 2

If total spending rises from one year to the next, then

Accepted Answer

A)   the economy must be producing a larger output of goods and services.
B)   goods and services must be selling at higher prices.
C)   either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both.
D)   employment or productivity must be rising.E) B) and C)
F) None of the above

Question 3

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Accepted Answer

A) True 
 B)False

Question 4

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

Accepted Answer

A)   $55,000
B)   $65,000
C)   $120,000
D)   None of the above are correct.E) None of the above
F) All of the above

Question 5

A U.S.-owned car factory in Mexico produces $5 million of cars. $2.5 million of these cars are sold in Mexico and the other $2.5 million are sold in the U.S. In both cases $1 million of the value of the cars was due to U.S-owned equipment located in Mexico and U.S. managers working in Mexico. How much did this production contribute to U.S. GDP?

Accepted Answer

A)   $0
B)   $1 million
C)   $2 million
D)   None of the above are correctE) A) and D)
F) C) and D)

Question 6

A German citizen buys an automobile produced in the United States by a Japanese company. As a result,

Accepted Answer

A)   U.S. net exports increase, U.S. GDP is unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected.
B)   U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, German GNP is unaffected, and German GDP decreases.
C)   U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected.
D)   U.S. net exports and GDP are unaffected, Japanese GNP increases, and German net exports, GNP, and GDP decrease.E) None of the above
F) B) and D)

Question 7

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)   The 2014 sale increased 2014 GDP by $260,000 and had no effect on 2011 GDP.
B)   The 2014 sale increased 2014 GDP by $20,000 and had no effect on 2011 GDP.
C)   The 2014 sale increased 2014 GDP by $260,000; furthermore, the 2014 sale caused 2011 GDP to be revised upward by $20,000.
D)   The 2014 sale affected neither 2014 GDP nor 2011 GDP.E) C) and D)
F) B) and C)

Question 8

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.E) B) and C)
F) All of the above

Question 9

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Accepted Answer

A)   $1.25 billion at an annual rate.
B)   $4 billion at an annual rate.
C)   $5 billion at an annual rate.
D)   $20 billion at an annual rate.E) All of the above
F) A) and B)

Question 10

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 GDP deflator was

Accepted Answer

A)   57.9.
B)   100.0.
C)   137.5.
D)   169.2.E) B) and D)
F) None of the above

Question 11

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 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.E) B) and C)
F) A) and D)

Question 12

A farmer sells $25,000 worth of apples to individuals who take them home to eat, $50,000 worth of apples to a company that uses them all to produce cider, and $75,000 worth of apples to a grocery store that will sell them to households. How much of the farmer's sales will be included as apples in GDP?

Accepted Answer

A)   $25,000
B)   $150,000
C)   $100,000
D)   $125,000E) A) and C)
F) All of the above

Question 13

When economists talk about growth in the economy, they measure that growth as the

Accepted Answer

A)   absolute change in nominal GDP from one period to another.
B)   percentage change in nominal GDP from one period to another.
C)   absolute change in real GDP from one period to another.
D)   percentage change in real GDP from one period to another.E) B) and D)
F) None of the above

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

For the economy as a whole,

Accepted Answer

A)   income must be greater than expenditure.
B)   unemployment must rise when GDP rises.
C)   expenditure must equal income.
D)   consumption must be greater than investment.E) All of the above
F) A) and B)

Question 16

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Accepted Answer

A)   Argentina, Bolivia, Peru
B)   Argentina, Peru, Bolivia
C)   Bolivia, Argentina, Peru
D)   Peru, Bolivia, ArgentinaE) B) and C)
F) All of the above

Question 17

Which of the following is not an example of a durable good?

Accepted Answer

A)   a refrigerator.
B)   an automobile.
C)   a business suit.
D)   a furnace.E) B) and C)
F) A) and D)

Question 18

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 19

Because every transaction has a buyer and a seller,

Accepted Answer

A)   GDP is more closely associated with an economy's income than it is with an economy's expenditure.
B)   every transaction contributes equally to an economy's income and to its expenditure.
C)   the number of firms must be equal to the number of households in a simple circular-flow diagram.
D)   firms' profits are necessarily zero in a simple circular­flow diagram.E) A) and B)
F) A) and C)

Question 20

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

Accepted Answer

A)   U.S. consumption falls by $500, U.S. net exports decline by $500, and U.S. GDP declines by $1000.
B)   U.S. consumption does not change, U.S. net exports decline by $500, and U.S. GDP declines by $500.
C)   U.S. consumption increases by $500, U.S. net exports remain the same, and U.S. GDP increases by $500.
D)   U.S. consumption increases by $500, U.S. net exports decline by $500, and U.S. GDP remains the same.E) B) and C)
F) A) and B)

Exam 5: Measuring a Nations Income

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Correct Answer
verified

Most goods and services produced at home

Correct Answer
verified

A German citizen buys an automobile produced in the United States by a Japanese company. As a result,

Correct Answer
verified

If total spending rises from one year to the next, then

Correct Answer
verified

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Correct Answer
verified

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

Correct Answer
verified

For the economy as a whole,

Correct Answer
verified

Which of the following is not an example of a durable good?

Correct Answer
verified

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 GDP deflator was

Correct Answer
verified

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Correct Answer
verified

Correct Answer
verified

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's nominal GDP highest?

Correct Answer
verified

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct Answer
verified

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

Correct Answer
verified

When economists talk about growth in the economy, they measure that growth as the

Correct Answer
verified

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Correct Answer
verified

Because every transaction has a buyer and a seller,

Correct Answer
verified

Exam 5: Measuring a Nations Income

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Correct AnswerverifiedShow Answer

Most goods and services produced at home

Correct AnswerverifiedShow Answer

A German citizen buys an automobile produced in the United States by a Japanese company. As a result,

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next, then

Correct AnswerverifiedShow Answer

An economy's income is the same as its expenditure because every transaction has a buyer and a seller.

Correct AnswerverifiedShow Answer

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

Correct AnswerverifiedShow Answer

For the economy as a whole,

Correct AnswerverifiedShow Answer

Which of the following is not an example of a durable good?

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 GDP deflator was

Correct AnswerverifiedShow Answer

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . -Refer to Table 23-10. In which year was this country's nominal GDP highest?

Correct AnswerverifiedShow Answer

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

Correct AnswerverifiedShow Answer

When economists talk about growth in the economy, they measure that growth as the

Correct AnswerverifiedShow Answer

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Correct AnswerverifiedShow Answer

Because every transaction has a buyer and a seller,

Correct AnswerverifiedShow Answer

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