Question 1

If deflation is occurring and nominal Gross Domestic Product (GDP)  is increasing over time, then real Gross Domestic Product (GDP)  is

Accepted Answer

A)   decreasing.
B)   increasing at the same rate as nominal Gross Domestic Product (GDP) .
C)   increasing more slowly than nominal Gross Domestic Product (GDP) .
D)   increasing faster than nominal Gross Domestic Product (GDP) .E) A) and B)
F) A) and C)

Question 2

The farmer pays 20 cents for the seed that is sold to the miller for 35 cents; the miller makes flour and sells it to the baker for 55 cents. The baker makes bread and sells it to the grocery store for 80 cents and the store sells it to consumers for $1.00. The contribution to Gross Domestic Product (GDP)  is

Accepted Answer

A)   $2.90.
B)   $1.90.
C)   $1.
D)   20 cents.E) A) and B)
F) A) and D)

Question 3

National income is equal to

Accepted Answer

A)   Gross Domestic Product (GDP)  plus depreciation and indirect business taxes.
B)   the sum of all factor payments to resource owners.
C)   Gross Domestic Product (GDP)  minus indirect business taxes.
D)   Gross Domestic Product (GDP)  minus NDP.E) C) and D)
F) All of the above

Question 4

Which one of the following is NOT included in GDP?

Accepted Answer

A)   The federal government pays a defense contractor to develop a new weapons system.
B)   You volunteer to organize a neighborhood watch group on your block.
C)   You pay your monthly apartment rent.
D)   A mail-order firm constructs a new warehouse in Kansas as a central distribution facility.E) A) and B)
F) B) and C)

Question 5

-According to the above table, Gross Domestic Product (GDP)  is

Accepted Answer

A)   $2,190.
B)   $2,840.
C)   $2,465.
D)   $2,750.E) None of the above
F) A) and D)

Question 6

Given the following data, calculate the GDP. wages = $500 government spending= $2,500 private investment = $2,100
Rent= $100 consumer spending= $7,800 net exports = $-400

Accepted Answer

A)   GDP = $11,400
B)   GDP = $12,000
C)   GDP = $12,400
D)   GDP = $13,000E) A) and D)
F) B) and D)

Question 7

Which one of the following statements about GDP is true?

Accepted Answer

A)   GDP can be calculated using the income approach.
B)   The value of household production is excluded from GDP.
C)   GDP can be calculated using the expenditures approach.
D)   all of the above.E) A) and B)
F) C) and D)

Question 8

The total market value of the nation's annual final products produced domestically best defines the

Accepted Answer

A)   GDP.
B)   GNP.
C)   CPI.
D)   PPI.E) A) and D)
F) A) and C)

Question 9

An increase in net exports

Accepted Answer

A)   causes GDP to increase.
B)   causes GDP to decrease.
C)   causes an increase in imports of the same size.
D)   can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable.E) C) and D)
F) B) and D)

Question 10

Transfer payments are included in

Accepted Answer

A)   gross domestic product.
B)   net domestic product.
C)   national income.
D)   personal income.E) B) and C)
F) A) and D)

Question 11

What is the proper formula for computing the GDP using the expenditure approach?

Accepted Answer

A)   S + I + G + X
B)   C + I + G + X
C)   C + O + G + S
D)   0.5(w + r)  + kE) B) and C)
F) None of the above

Question 12

The components of GDP using the expenditure method are

Accepted Answer

A)   consumption expenditures, investment expenditures, and government expenditures.
B)   consumption expenditures, investment expenditures, government expenditures, and net exports.
C)   wages and interest.
D)   wages, interest, rents ,and profits.E) A) and C)
F) A) and D)

Question 13

The most accurate way to compare standards of living throughout the world is to look at

Accepted Answer

A)   total Gross Domestic Product (GDP) .
B)   GNP.
C)   purchasing power parity.
D)   foreign exchange rates.E) C) and D)
F) B) and C)

Question 14

A farmer buys seed for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30 cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes bread, which is sold to the grocer for 90 cents. The grocer sells the bread for $1.25. What is the value added for the grocer?

Accepted Answer

A)   15 cents
B)   30 cents
C)   35 cents
D)   $1.25E) A) and D)
F) None of the above

Question 15

-Refer to the above table. The value of the GDP deflator in 2009 is

Accepted Answer

A)   121.2.
B)   122.1.
C)   122.9.
D)   uncertain without more information.E) A) and B)
F) A) and C)

Question 16

Which of the following is included in government expenditures when measuring GDP?

Accepted Answer

A)   Social Security payments
B)   Unemployment expenditures
C)   Goods imported into the United States
D)   The President's incomeE) None of the above
F) All of the above

Question 17

Which of the following is NOT included in the calculation of Gross Domestic Product (GDP) ?

Accepted Answer

A)   The purchase of a raincoat by Mr. Z
B)   Mrs. T's use of a lawyer
C)   Mr. J's purchase of a share of General Motors stock
D)   All of these would be includedE) B) and D)
F) A) and B)

Question 18

The adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries is called

Accepted Answer

A)   nominal purchasing power.
B)   purchasing power parity.
C)   raw purchasing power.
D)   currency-adjusted purchasing power.E) None of the above
F) A) and D)

Question 19

GDP

Accepted Answer

A)   is a stock measure since it represents the total market value.
B)   is a flow measure since it represents the value of a flow of production over a year's period.
C)   is neither a stock or flow measure since it is measured in dollars.
D)   could be either a stock or flow measure depending upon whether it is measured in dollars or units of production.E) C) and D)
F) B) and D)

Question 20

Which of the following transactions is included in the GDP?

Accepted Answer

A)   paying a lawyer to create a family trust
B)   giving your friend $20
C)   selling your 2004 Toyota Camry
D)   cleaning your houseE) A) and D)
F) C) and D)

Exam 8: Measuring the Economys Performance

GDP

Correct Answer
verified

If deflation is occurring and nominal Gross Domestic Product (GDP) is increasing over time, then real Gross Domestic Product (GDP) is

Correct Answer
verified

Transfer payments are included in

Correct Answer
verified

Correct Answer
verified

Which of the following is NOT included in the calculation of Gross Domestic Product (GDP) ?

Correct Answer
verified

-According to the above table, Gross Domestic Product (GDP) is

Correct Answer
verified

The total market value of the nation's annual final products produced domestically best defines the

Correct Answer
verified

Which of the following transactions is included in the GDP?

Correct Answer
verified

The components of GDP using the expenditure method are

Correct Answer
verified

Which of the following is included in government expenditures when measuring GDP?

Correct Answer
verified

The most accurate way to compare standards of living throughout the world is to look at

Correct Answer
verified

-Refer to the above table. The value of the GDP deflator in 2009 is

Correct Answer
verified

Correct Answer
verified

Given the following data, calculate the GDP. wages = $500 government spending= $2,500 private investment = $2,100 Rent= $100 consumer spending= $7,800 net exports = $-400

Correct Answer
verified

National income is equal to

Correct Answer
verified

An increase in net exports

Correct Answer
verified

What is the proper formula for computing the GDP using the expenditure approach?

Correct Answer
verified

Which one of the following is NOT included in GDP?

Correct Answer
verified

The adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries is called

Correct Answer
verified

Which one of the following statements about GDP is true?

Correct Answer
verified

Exam 8: Measuring the Economys Performance

GDP

Correct AnswerverifiedShow Answer

If deflation is occurring and nominal Gross Domestic Product (GDP) is increasing over time, then real Gross Domestic Product (GDP) is

Correct AnswerverifiedShow Answer

Transfer payments are included in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is NOT included in the calculation of Gross Domestic Product (GDP) ?

Correct AnswerverifiedShow Answer

-According to the above table, Gross Domestic Product (GDP) is

Correct AnswerverifiedShow Answer

The total market value of the nation's annual final products produced domestically best defines the

Correct AnswerverifiedShow Answer

Which of the following transactions is included in the GDP?

Correct AnswerverifiedShow Answer

The components of GDP using the expenditure method are

Correct AnswerverifiedShow Answer

Which of the following is included in government expenditures when measuring GDP?

Correct AnswerverifiedShow Answer

The most accurate way to compare standards of living throughout the world is to look at

Correct AnswerverifiedShow Answer

-Refer to the above table. The value of the GDP deflator in 2009 is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Given the following data, calculate the GDP. wages = $500 government spending= $2,500 private investment = $2,100 Rent= $100 consumer spending= $7,800 net exports = $-400

Correct AnswerverifiedShow Answer

National income is equal to

Correct AnswerverifiedShow Answer

An increase in net exports

Correct AnswerverifiedShow Answer

What is the proper formula for computing the GDP using the expenditure approach?

Correct AnswerverifiedShow Answer

Which one of the following is NOT included in GDP?

Correct AnswerverifiedShow Answer

The adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries is called

Correct AnswerverifiedShow Answer

Which one of the following statements about GDP is true?

Correct AnswerverifiedShow Answer

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