Question 1

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Accepted Answer

A)   U.S.investment and GDP increase,but German GDP is unaffected.
B)   U.S.investment and German GDP increase,but U.S.GDP is unaffected.
C)   U.S.investment,U.S.GDP,and German GDP are unaffected because tractors are intermediate goods.
D)   U.S.investment,U.S.GDP,and German GDP all increase.E) A) and B)
F) A) and C)

Question 2

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

Accepted Answer

A)   $2.72 billion
B)   $17 billion
C)   $36.8 billion
D)   $43 billionE) A) and D)
F) C) and D)

Question 3

If in some year nominal GDP was $20 billion and the GDP deflator was 50,what was real GDP ?

Accepted Answer

A)   $2.5 billion
B)   $10 billion
C)   $40 billion
D)   $100 billionE) B) and D)
F) All of the above

Question 4

Changes in inventory are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 5

Gross domestic product measures

Accepted Answer

A)   income and expenditures.
B)   income but not expenditures.
C)   expenditures but not income.
D)   neither income nor expenditures.E) C) and D)
F) A) and D)

Question 6

Table 15-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 15-1.Net national product for Bahkan in 2010 is

Accepted Answer

A)   $96
B)   $104
C)   $106
D)   $116E) None of the above
F) A) and C)

Question 7

In 2009,GDP per person in the United States was almost

Accepted Answer

A)   $25,000.
B)   $32,000.
C)   $46,000
D)   $53,000E) None of the above
F) B) and C)

Question 8

How does U.S.gross domestic product (GDP) differ from U.S.gross national product (GNP) ?

Accepted Answer

A)   GNP = GDP - losses from depreciation
B)   GNP = GDP + income earned by U.S.citizens abroad - income that foreign citizens earned in the U.S.
C)   GNP = GDP + transfer payments to households + - indirect sales taxes
D)   GNP = GDP - depreciation - retained earningsE) A) and B)
F) A) and D)

Question 9

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

Accepted Answer

A)   purchases of staplers,paper clips,and pens by U.S.business firms
B)   purchases of natural gas by U.S.households
C)   purchases of newly constructed homes by U.S.households
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 10

If a U.S.company buys an electrical generator made in Japan by a Japanese firm,and the Japanese firm uses the payment to buy stocks issued by a U.S.company then

Accepted Answer

A)   U.S.exports and U.S imports increase.
B)   U.S.exports but not U.S.imports increase.
C)   U.S.imports but not U.S.exports increase.
D)   neither U.S.exports nor U.S.imports increase.E) A) and D)
F) A) and C)

Question 11

In the economy of Ukzten in 2010,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Ukzten's GDP in 2010?

Accepted Answer

A)   $1450
B)   $1790
C)   $2450
D)   $2790E) B) and D)
F) B) and C)

Question 12

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)   consumption,since the goods will be sold to consumers in another period.
B)   intermediate goods,and so is not included in that year's GDP.
C)   investment,since GDP aims to measure the value of the economy's production that year.
D)   spending on durable goods,since the goods could not be inventoried unless they were durable.E) A) and B)
F) A) and C)

Question 13

One bag of flour is sold for $1.00 to a bakery,which uses the flour to bake bread that is sold for $3.00 to consumers.A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00.Taking these four transactions into account,what is the effect on GDP?

Accepted Answer

A)   GDP increases by $3.00.
B)   GDP increases by $5.00.
C)   GDP increases by $6.00.
D)   GDP increases by $7.00.E) B) and D)
F) A) and B)

Question 14

In early2010 Molly paid $200,000 for a house built in 2000.She spent $30,000 on new materials to remodel the house.Although Molly lived in the house after she remodeled it,its rental value rose.Which of the following contributed to real GDP in 2010?

Accepted Answer

A)   the price of the house,the cost of remodeling materials,the increase in rental value
B)   the price of the house and the cost of remodeling materials,but not the increase in rental value
C)   the costs of the remodeling materials and the increase in rent,but not the price of the house
D)   None of the above are correct.E) All of the above
F) A) and D)

Question 15

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)   consumption of durable goods
B)   consumption of nondurable goods
C)   consumption of services
D)   investmentE) None of the above
F) A) and D)

Question 16

Disposable personal income is the income that

Accepted Answer

A)   households have left after paying taxes and non-tax payments to the government.
B)   businesses have left after paying taxes and non-tax payments to the government.
C)   households and noncorporate businesses have left after paying taxes and non-tax payments to the government.
D)   households and businesses have left after paying taxes and non-tax payments to the government.E) None of the above
F) B) and D)

Question 17

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

Accepted Answer

A)   a loaf of bread
B)   a pair of jeans
C)   a microwave
D)   a pound of baconE) A) and D)
F) C) and D)

Question 18

At a rummage sale,you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Accepted Answer

A) True 
 B)False

Question 19

Recessions are not associated with which of the following?

Accepted Answer

A)   increased bankruptcies
B)   falling profits
C)   falling incomes
D)   falling unemploymentE) A) and B)
F) A) and C)

Question 20

Tom and Lilly rented a house for $12,000 last year.At the start of the year they bought the house they had been renting directly from the owner for $250,000.They believe they could rent it for $12,000 this year,but stay in the house.How much does Tom and Lilly's decision to buy the house change GDP?

Accepted Answer

A)   it reduces GDP by $12,000
B)   it does not change GDP
C)   it raises GDP by $238,000
D)   it raises GDP by $250,000E) A) and B)
F) C) and D)

Exam 15: Measuring a Nations Income

At a rummage sale,you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Correct AnswerverifiedShow Answer

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

Correct AnswerverifiedShow Answer

One bag of flour is sold for $1.00 to a bakery,which uses the flour to bake bread that is sold for $3.00 to consumers.A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00.Taking these four transactions into account,what is the effect on GDP?

Correct AnswerverifiedShow Answer

Changes in inventory are included in the investment component of GDP.

Correct AnswerverifiedShow Answer

Disposable personal income is the income that

Correct AnswerverifiedShow Answer

If a U.S.company buys an electrical generator made in Japan by a Japanese firm,and the Japanese firm uses the payment to buy stocks issued by a U.S.company then

Correct AnswerverifiedShow Answer

The value of goods added to a firm's inventory in a certain year is treated as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In early2010 Molly paid $200,000 for a house built in 2000.She spent $30,000 on new materials to remodel the house.Although Molly lived in the house after she remodeled it,its rental value rose.Which of the following contributed to real GDP in 2010?

Correct AnswerverifiedShow Answer

Recessions are not associated with which of the following?

Correct AnswerverifiedShow Answer

A Minnesota farmer buys a new tractor made in Iowa by a German company.As a result,

Correct AnswerverifiedShow Answer

Gross domestic product measures

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2009,GDP per person in the United States was almost

Correct AnswerverifiedShow Answer

Household spending on education is counted in which component or subcomponent of GDP?

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Ukzten's GDP in 2010?

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

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Table 15-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 15-1.Net national product for Bahkan in 2010 is

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If in some year nominal GDP was $20 billion and the GDP deflator was 50,what was real GDP ?

Correct AnswerverifiedShow Answer

How does U.S.gross domestic product (GDP) differ from U.S.gross national product (GNP) ?

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