Question 1

In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

Accepted Answer

A) True 
 B)False

Question 2

Changes in the GDP deflator reflect

Accepted Answer

A)   only changes in prices.
B)   only changes in the amounts being produced.
C)   both changes in prices and changes in the amounts being produced.
D)   neither changes in prices nor changes in the amounts being produced.E) None of the above
F) C) and D)

Question 3

Table 23-1
The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009.
Prices and Quantities
 
-Refer to Table 23-1.
What was the inflation rate for 2011? Show your work.

Accepted Answer

For 2010 the GDP Deflator was 112.
Nomin...

Question 4

Table 10-5
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 2009.
Prices and Quantities
 
-Refer to Table 10-5 What was this country's real GDP in 2010?

Accepted Answer

A)   $8,800
B)   $10,500
C)   $10,600
D)   $12,200E) B) and D)
F) B) and C)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

In the United States in 2009,purchases of capital equipment,inventories,and structures represented approximately

Accepted Answer

A)   3 percent of GDP.
B)   7 percent of GDP.
C)   11 percent of GDP.
D)   15 percent of GDP.E) A) and D)
F) B) and C)

Question 7

National income is defined as

Accepted Answer

A)   the total income of a nation's permanent residents minus losses from depreciation.
B)   the income that households and noncorporate businesses receive.
C)   the total income earned by a nation's permanent residents in the production of goods and services.
D)   the income that households and noncorporate businesses have left after satisfying all their obligations to the government.E) B) and C)
F) A) and D)

Question 8

Typically in countries with lower levels of real GDP person,a smaller percentage of the population is literate.

Accepted Answer

A) True 
 B)False

Question 9

According to the circular-flow diagram GDP

Accepted Answer

A)   can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.
B)   can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.
C)   can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services.
D)   cannot be computed as either the revenue firms receive or the payments they make to factors of production.E) None of the above
F) A) and B)

Question 10

Consumer goods that are produced,go into inventory,and are not sold during the current period are

Accepted Answer

A)   counted as intermediate goods and so are not included in current period GDP.
B)   counted in current period GDP only if the firm that produced them sells them to another firm.
C)   included in current period GDP as inventory investment.
D)   included in current period GDP as consumption.E) A) and D)
F) C) and D)

Question 11

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Accepted Answer

A) True 
 B)False

Question 12

How frequently is U.S.GDP reported? Is GDP adjusted for seasonality?

Accepted Answer

GDP is reported ever...

Question 13

Table 10-4
The table below reports nominal and real GDP for the U.S.from 1929 to 1932.
 
-Refer to Table 10-3.What was the growth rate of real GDP for 1931?

Accepted Answer

A)   -6.93%.Real GDP is a better gauge of economic well-being than nominal GDP.
B)   -6.93%.Nominal GDP is a better gauge of economic well-being than real GDP.
C)   -6.49%.Real GDP is a better gauge of economic well-being than nominal GDP.
D)   -6.49%.Nominal GDP is a better gauge of economic well-being than real GDP.E) None of the above
F) B) and C)

Question 14

Which of the following is not a question that macroeconomists address?

Accepted Answer

A)   Why is average income high in some countries while it is low in others?
B)   Why does the price of oil rise when war erupts in the Middle East?
C)   Why do production and employment expand in some years and contract in others?
D)   Why do prices rise rapidly in some periods of time while they are more stable in other periods?E) A) and C)
F) B) and C)

Question 15

Tyler and Camille both live in Oklahoma.A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000.Later that year,Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U.S.GDP for the year?

Accepted Answer

A)   $18,000
B)   $22,000
C)   $39,000
D)   $57,000E) All of the above
F) A) and B)

Question 16

You find that your paycheck for the year is higher this year than last.Does that mean that your real income has increased? Explain carefully.

Accepted Answer

Real income is nominal income adjusted f...

Question 17

Sheri,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Accepted Answer

A)   in both German GDP and U.S.GDP.
B)   in German GDP,but is not included in U.S.GDP.
C)   in U.S.GDP,but is not included in German GDP.
D)   in neither German GDP nor U.S.GDP.E) All of the above
F) C) and D)

Question 18

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) A) and D)
F) A) and C)

Question 19

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

Accepted Answer

A)   household purchases of appliances.
B)   household purchases of medical care.
C)   household purchases of food.
D)   All of the above are included in the consumption component of GDP.E) All of the above
F) A) and B)

Question 20

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Accepted Answer

A)   the effect of taxes on the prices of airline tickets,and the profitability of automobile-manufacturing firms
B)   the price of beef,and wage differences between genders
C)   how consumers maximize utility,and how prices are established in markets for agricultural products
D)   the percentage of the labor force that is out of work,and differences in average income from country to countryE) A) and B)
F) A) and C)

Exam 23: Measuring a Nations Income

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

Correct AnswerverifiedShow Answer

Tyler and Camille both live in Oklahoma.A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000.Later that year,Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U.S.GDP for the year?

Correct AnswerverifiedShow Answer

In the United States in 2009,purchases of capital equipment,inventories,and structures represented approximately

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In years of economic contraction,firms throughout the economy increase their production of goods and services,employment rises,and jobs are easy to find.

Correct AnswerverifiedShow Answer

Consumer goods that are produced,go into inventory,and are not sold during the current period are

Correct AnswerverifiedShow Answer

Changes in the GDP deflator reflect

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

How frequently is U.S.GDP reported? Is GDP adjusted for seasonality?

Correct AnswerverifiedGDP is reported ever...View AnswerShow Answer

Typically in countries with lower levels of real GDP person,a smaller percentage of the population is literate.

Correct AnswerverifiedShow Answer

Table 10-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 10-3.What was the growth rate of real GDP for 1931?

Correct AnswerverifiedShow Answer

Sheri,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

Correct AnswerverifiedShow Answer

Table 10-5 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 2009. Prices and Quantities -Refer to Table 10-5 What was this country's real GDP in 2010?

Correct AnswerverifiedShow Answer

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Correct AnswerverifiedShow Answer

You find that your paycheck for the year is higher this year than last.Does that mean that your real income has increased? Explain carefully.

Correct AnswerverifiedReal income is nominal income adjusted f...View AnswerShow Answer

According to the circular-flow diagram GDP

Correct AnswerverifiedShow Answer

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Correct AnswerverifiedShow Answer

Which of the following is not a question that macroeconomists address?

Correct AnswerverifiedShow Answer

National income is defined as

Correct AnswerverifiedShow Answer

Table 23-1 The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009. Prices and Quantities -Refer to Table 23-1. What was the inflation rate for 2011? Show your work.

Correct AnswerverifiedFor 2010 the GDP Deflator was 112.Nomin...View AnswerShow Answer

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GDP is reported ever...
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Real income is nominal income adjusted f...
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For 2010 the GDP Deflator was 112.
Nomin...
View Answer