Question 1

Quality Motors is a Japanese-owned company that produces automobiles;all of its automobiles are produced in American plants.In 2010 Quality Motors produced $30 million worth of automobiles,with $17 million in sales to Americans,$9 million in sales to Canadians,and $4 million worth of automobiles added to Quality Motors' inventory.The transactions just described contribute how much to U.S.GDP for 2010?

Accepted Answer

A)   $17 million
B)   $21 million
C)   $26 million
D)   $30 millionE) All of the above
F) None of the above

Question 2

Table 10-6
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009.
Prices and Quantities
 
-Refer to Table 10-6.In 2009,this country's nominal GDP was

Accepted Answer

A)   $300.
B)   $390.
C)   $400.
D)   $540.E) C) and D)
F) A) and B)

Question 3

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company,which uses the aluminum to make aluminum foil.Shiny Foil Company sells $4 million worth of aluminum foil to households.The transactions just described contribute how much to GDP?

Accepted Answer

A)   $1 million
B)   $3 million
C)   $4 million
D)   $5 millionE) A) and B)
F) A) and C)

Question 4

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

Accepted Answer

A)   1/2 times as much to GDP as the production of good B.
B)   3/2 times as much to GDP as the production of good B.
C)   3/4 times as much to GDP as the production of good B.
D)   4/3 times as much to GDP as production of good B.E) C) and D)
F) None of the above

Question 5

A consumer buys toys made in China.The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 6

Macroeconomics is the study of the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 7

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Accepted Answer

A)   reduced measured GDP.
B)   not affected measured GDP.
C)   increased measured GDP by the value of the restaurant meals.
D)   increased measured GDP by the value added by the restaurant's preparation and serving of the meals.E) A) and D)
F) A) and C)

Question 8

Rocket Energy Drink Company buys sugar to produce energy drinks.At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased.Investment for the quarter will include

Accepted Answer

A)   both the increased inventory of sugar and the increased inventory of energy drinks.
B)   the increased inventory of sugar,but not the increased inventory of energy drinks.
C)   the increased inventory of energy drinks,but not the increased inventory of sugar.
D)   neither the increased inventory of sugar nor the increased inventory of energy drinks.E) B) and D)
F) A) and D)

Question 9

Real GDP is the yearly production of final goods and services valued at

Accepted Answer

A)   current prices.
B)   constant prices.
C)   expected future prices.
D)   the ratio of current prices to constant prices.E) A) and B)
F) None of the above

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) B) and C)
F) None of the above

Question 11

For an economy as a whole,

Accepted Answer

A)   wages must equal profit.
B)   consumption must equal saving.
C)   income must equal expenditure.
D)   the number of buyers must equal the number of sellers.E) A) and D)
F) A) and C)

Question 12

According to the circular-flow diagram,GDP

Accepted Answer

A)   can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
B)   can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
C)   can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.
D)   can be computed as the payments firms make to factors of production,but not as revenues they receive from the sales of goods and services.E) A) and D)
F) A) and C)

Question 13

The government's purchases of goods but not its purchases of services are included in GDP.

Accepted Answer

A) True 
 B)False

Question 14

If real GDP is higher in one country than in another,then we can be sure that the standard of living is higher in the country with the higher real GDP.

Accepted Answer

A) True 
 B)False

Question 15

Recessions are associated with lower incomes,rising unemployment,and falling profits.

Accepted Answer

A) True 
 B)False

Question 16

Grapes are considered intermediate goods

Accepted Answer

A)   whether the purchaser uses them to make wine to sell or eats them.
B)   if the purchaser uses them to make wine to sell others but not if the purchaser eats them.
C)   if the purchaser eats them,but not if the purchaser uses to them to make wine to sell.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 17

An American retailer purchased 100 pairs of shoes from a company in Denmark in the second quarter of 2010 but does not sell them to a consumer until the third quarter of 2010.In which quarter(s) is (are) the value of the shoes included in U.S.GDP?

Accepted Answer

A)   the second and third quarters
B)   the second quarter but not the third quarter
C)   the third but not the second quarter
D)   neither the second nor the third quarterE) A) and D)
F) All of the above

Question 18

Underground economic activity as a percentage of GDP was highest in

Accepted Answer

A)   Bolivia.
B)   Mexico.
C)   Australia.
D)   the United States.E) All of the above
F) A) and B)

Question 19

A U.S.-owned automobile factory uses $100,000worth of parts purchased from foreign countries along with U.S.inputs to produce 30 cars worth $20,000 each Twenty of these cars are sold and 10 are left in inventory.How much did these actions add to GDP?

Accepted Answer

A)   $300,000
B)   $500,000
C)   $600,000
D)   $700,000E) None of the above
F) All of the above

Question 20

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

Accepted Answer

A)   spending on new residential construction and spending on stocks and bonds
B)   spending on new residential construction but not spending on stocks and bonds
C)   spending on stocks and bonds but not spending on new residential construction
D)   neither spending on stocks and bonds nor spending on new residential constructionE) None of the above
F) A) and D)

Exam 23: Measuring a Nations Income

The government's purchases of goods but not its purchases of services are included in GDP.

Correct Answer
verified

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

Correct Answer
verified

A consumer buys toys made in China.The value of the toys is included only in the net exports component of GDP.

Correct Answer
verified

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.In 2009,this country's nominal GDP was

Correct Answer
verified

A U.S.-owned automobile factory uses $100,000worth of parts purchased from foreign countries along with U.S.inputs to produce 30 cars worth $20,000 each Twenty of these cars are sold and 10 are left in inventory.How much did these actions add to GDP?

Correct Answer
verified

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Correct Answer
verified

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company,which uses the aluminum to make aluminum foil.Shiny Foil Company sells $4 million worth of aluminum foil to households.The transactions just described contribute how much to GDP?

Correct Answer
verified

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 Answer
verified

Recessions are associated with lower incomes,rising unemployment,and falling profits.

Correct Answer
verified

Real GDP is the yearly production of final goods and services valued at

Correct Answer
verified

Correct Answer
verified

Rocket Energy Drink Company buys sugar to produce energy drinks.At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased.Investment for the quarter will include

Correct Answer
verified

For an economy as a whole,

Correct Answer
verified

If real GDP is higher in one country than in another,then we can be sure that the standard of living is higher in the country with the higher real GDP.

Correct Answer
verified

Macroeconomics is the study of the economy as a whole.

Correct Answer
verified

An American retailer purchased 100 pairs of shoes from a company in Denmark in the second quarter of 2010 but does not sell them to a consumer until the third quarter of 2010.In which quarter(s) is (are) the value of the shoes included in U.S.GDP?

Correct Answer
verified

According to the circular-flow diagram,GDP

Correct Answer
verified

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

Correct Answer
verified

Underground economic activity as a percentage of GDP was highest in

Correct Answer
verified

Grapes are considered intermediate goods

Correct Answer
verified

Exam 23: Measuring a Nations Income

The government's purchases of goods but not its purchases of services are included in GDP.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A consumer buys toys made in China.The value of the toys is included only in the net exports component of GDP.

Correct AnswerverifiedShow Answer

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.In 2009,this country's nominal GDP was

Correct AnswerverifiedShow Answer

A U.S.-owned automobile factory uses $100,000worth of parts purchased from foreign countries along with U.S.inputs to produce 30 cars worth $20,000 each Twenty of these cars are sold and 10 are left in inventory.How much did these actions add to GDP?

Correct AnswerverifiedShow Answer

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

Correct AnswerverifiedShow Answer

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company,which uses the aluminum to make aluminum foil.Shiny Foil Company sells $4 million worth of aluminum foil to households.The transactions just described contribute how much to GDP?

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

Recessions are associated with lower incomes,rising unemployment,and falling profits.

Correct AnswerverifiedShow Answer

Real GDP is the yearly production of final goods and services valued at

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Rocket Energy Drink Company buys sugar to produce energy drinks.At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased.Investment for the quarter will include

Correct AnswerverifiedShow Answer

For an economy as a whole,

Correct AnswerverifiedShow Answer

If real GDP is higher in one country than in another,then we can be sure that the standard of living is higher in the country with the higher real GDP.

Correct AnswerverifiedShow Answer

Macroeconomics is the study of the economy as a whole.

Correct AnswerverifiedShow Answer

An American retailer purchased 100 pairs of shoes from a company in Denmark in the second quarter of 2010 but does not sell them to a consumer until the third quarter of 2010.In which quarter(s) is (are) the value of the shoes included in U.S.GDP?

Correct AnswerverifiedShow Answer

According to the circular-flow diagram,GDP

Correct AnswerverifiedShow Answer

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

Correct AnswerverifiedShow Answer

Underground economic activity as a percentage of GDP was highest in

Correct AnswerverifiedShow Answer

Grapes are considered intermediate goods

Correct AnswerverifiedShow Answer

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