Question 1

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Accepted Answer

A)  raises GDP.
B)  decreases GDP.
C)  doesn't change GDP because gambling is never included in GDP.
D)  doesn't change GDP because in either case his income is included.E) C) and D)
F) A) and D)

Question 2

Alexandria, a British citizen, owns and manages a fish and chips shop in Washington, D.C.
She buys fresh food produced by U.S. workers, pays utilities to a U.S. company, and employs only U.S. citizens. What part, if any, of the restaurant's production is included in U.S. GDP? What part, if any, of the restaurant's production is included in U.S. GNP?

Accepted Answer

All of the output is included ...

Question 3

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Accepted Answer

A) True 
 B)False

Question 4

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Accepted Answer

A)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90.
B)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1.
C)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90.
D)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1.E) A) and D)
F) A) and B)

Question 5

In 2015, U.S. net exports were

Accepted Answer

A)  positive and about 3 percent the size of GDP.
B)  positive and about 6 percent the size of GDP.
C)  negative and about 3 percent the size of GDP.
D)  negative and about 6 percent the size of GDP.E) A) and D)
F) A) and C)

Question 6

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 .
Prices and Quantities 
-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) All of the above
F) None of the above

Question 7

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

A)  capital
B)  consumption
C)  investment
D)  costsE) A) and B)
F) A) and C)

Question 8

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Accepted Answer

A)  $6200
B)  $6400
C)  $7000
D)  $8200E) A) and C)
F) A) and D)

Question 9

In a simple circular-flow diagram,

Accepted Answer

A)  households spend all of their income.
B)  all goods and services are bought by households.
C)  expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production.
D)  All of the above are correct.E) A) and B)
F) C) and D)

Question 10

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.E) A) and B)
F) A) and C)

Question 11

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Accepted Answer

A)  increased.
B)  decreased.
C)  stayed the same.
D)  may have increased, decreased, or stayed the same.E) All of the above
F) A) and B)

Question 12

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Accepted Answer

Wages, rents, and pr...

Question 13

A transfer payment is a payment made by

Accepted Answer

A)  consumers, but not in exchange for a tangible product.
B)  firms, but not in exchange for capital equipment.
C)  foreigners, but not in exchange for a domestically-produced good or service.
D)  government, but not in exchange for a currently produced good or service.E) A) and B)
F) A) and C)

Question 14

The inflation rate in year 2 equals

Accepted Answer

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

Question 15

In 2015, GDP per person in the United States was almost

Accepted Answer

A)  $38,000.
B)  $36,000.
C)  $49,000
D)  $56,000E) None of the above
F) A) and B)

Question 16

In a simple circular-flow diagram, total income and total expenditure are

Accepted Answer

A)  never equal because total income always exceeds total expenditure.
B)  seldom equal because of the ongoing changes in an economy's unemployment rate.
C)  equal only when the government purchases no goods or services.
D)  always equal because every transaction has a buyer and a seller.E) B) and D)
F) A) and D)

Question 17

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 18

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Accepted Answer

A)  remains constant.
B)  doubles.
C)  triples.
D)  quadruples.E) B) and D)
F) None of the above

Question 19

In the base year, the GDP deflator is always

Accepted Answer

A)  -1.
B)  0.
C)  1.
D)  100.E) All of the above
F) B) and C)

Question 20

The inflation rate is the

Accepted Answer

A)  absolute change in real GDP from one period to another.
B)  percentage change in real GDP from one period to another.
C)  absolute change in the price level from one period to another.
D)  percentage change in the price level from one period to another.E) A) and D)
F) A) and C)

Exam 23: Measuring a Nation S Income

In 2015, GDP per person in the United States was almost

Correct Answer
verified

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Correct Answer
verified

Correct Answer
verified
All of the output is included ...
View Answer

In the base year, the GDP deflator is always

Correct Answer
verified

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct Answer
verified

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Correct Answer
verified
Wages, rents, and pr...
View Answer

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Correct Answer
verified

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Correct Answer
verified

In 2015, U.S. net exports were

Correct Answer
verified

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

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 . Prices and Quantities -Refer to Table 23-10. In which year was this country's nominal GDP highest?

Correct Answer
verified

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct Answer
verified

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

Correct Answer
verified

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Correct Answer
verified

A transfer payment is a payment made by

Correct Answer
verified

The inflation rate in year 2 equals

Correct Answer
verified

In a simple circular-flow diagram, total income and total expenditure are

Correct Answer
verified

In a simple circular-flow diagram,

Correct Answer
verified

The inflation rate is the

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Correct Answer
verified

Exam 23: Measuring a Nation S Income

In 2015, GDP per person in the United States was almost

Correct AnswerverifiedShow Answer

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAll of the output is included ...View AnswerShow Answer

In the base year, the GDP deflator is always

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

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

Correct AnswerverifiedWages, rents, and pr...View AnswerShow Answer

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

Correct AnswerverifiedShow Answer

If nominal GDP doubles and the GDP deflator doubles, then real GDP

Correct AnswerverifiedShow Answer

In 2015, U.S. net exports were

Correct AnswerverifiedShow Answer

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

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 . Prices and Quantities -Refer to Table 23-10. In which year was this country's nominal GDP highest?

Correct AnswerverifiedShow Answer

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Correct AnswerverifiedShow Answer

A transfer payment is a payment made by

Correct AnswerverifiedShow Answer

The inflation rate in year 2 equals

Correct AnswerverifiedShow Answer

In a simple circular-flow diagram, total income and total expenditure are

Correct AnswerverifiedShow Answer

In a simple circular-flow diagram,

Correct AnswerverifiedShow Answer

The inflation rate is the

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $5000, exports were $400, government purchases were $1000, imports were $600, and investment was $1200. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

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All of the output is included ...
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Wages, rents, and pr...
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