Question 1

If the GDP per capita of the Vermont Republic is $20,000 and the country has a population of 150,000 people, what is the GDP?

Accepted Answer

A)   $1.3 billion
B)   $7.5 billion
C)   $3 billion
D)   $3 millionE) None of the above
F) A) and B)

Question 2

Economists generally use real GDP as a reference point because it:

Accepted Answer

A)   captures spending in the underground economy.
B)   is seasonally adjusted for variations in spending habits.
C)   varies less than nominal GDP does.
D)   isolates changes in output.E) A) and B)
F) B) and C)

Question 3

Which of the following is a final service?

Accepted Answer

A)   A new tire used to replace a flat tired
B)   A used car
C)   Getting the oil changed in your car
D)   Tires purchased by Ford to put on their new ExplorersE) C) and D)
F) A) and B)

Question 4

Which of the following is a good that would be counted as consumption in GDP?

Accepted Answer

A)   The Subway sandwich Tony ate for lunch
B)   The cake Tony baked at home and shared with his roommate
C)   The money Tony spent on the purchase of a used car
D)   Common stock that Tony purchased for his 401(k) E) B) and C)
F) None of the above

Question 5

Which of the following does not appear in GDP as a part of government spending?

Accepted Answer

A)   Clipboards at the Department of Motor Vehicles
B)   Maintenance of government buildings
C)   Social Security payments
D)   City firework displays on Independence DayE) B) and C)
F) None of the above

Question 6

All else equal, compared with other countries, an economy with a higher proportion of stay-at-home parents would have:

Accepted Answer

A)   a higher level of GDP.
B)   a lower level of GDP
C)   about the same level of GDP.
D)   None of these are true.E) A) and B)
F) A) and C)

Question 7

Net exports equal:

Accepted Answer

A)   total exports plus total imports.
B)   total imports minus total exports.
C)   total exports minus total imports.
D)   total exports plus total imports, minus tariffs.E) None of the above
F) All of the above

Question 8

Rachel decides to buy a house for $200,000. The only thing Rachel needs to do is replace all the gutters for $1,000, which she happily does. How will GDP be affected by Rachel's recent purchases?

Accepted Answer

A)   GDP will increase by $199,000.
B)   GDP will increase by $190,000.
C)   GDP will increase by $201,000.
D)   GDP will increase by $1,000.E) A) and B)
F) B) and C)

Question 9

Attempting to calculate the value of an economy by adding up the value of every good and service produced would lead to:

Accepted Answer

A)   overcounting, as the value of intermediate products would be counted twice.
B)   overcounting, as every good sold is marked-up in price.
C)   undercounting, as most goods are not sold in retail markets.
D)   undercounting, as the value of money changes over time.E) B) and C)
F) A) and B)

Question 10

Yuto is a Japanese citizen working for Toyota at its manufacturing plant located in Tennessee. Yuto's work will contribute toward:

Accepted Answer

A)   U.S. GDP, because the location of the plant is in the United States.
B)   Japan's GDP, because he's a Japanese citizen.
C)   Japan's GDP, because he's working for a Japanese firm.
D)   both U.S. and Japan's GDP.E) A) and B)
F) A) and C)

Question 11

The most commonly used metric for measuring the value of a national economy is:

Accepted Answer

A)   gross domestic product (GDP) .
B)   gross national product (GNP) .
C)   gross national income (GNI) .
D)   gross domestic income (GDI) .E) All of the above
F) A) and D)

Question 12

One of the most crucial ideas in macroeconomics is understanding that:

Accepted Answer

A)   zero unemployment is the best way to achieve economic growth.
B)   total expenditures or total income both measure total production of an economy.
C)   economic downturns can be prolonged by fiscal policy.
D)   GNP is the most commonly used measurement of total production.E) None of the above
F) All of the above

Question 13

Intermediate goods and services are:

Accepted Answer

A)   used only as inputs to produce something else and are not counted as separate items in GDP.
B)   goods or services that consumers buy in parts and are included as separate items in GDP.
C)   used only as inputs to produce something else and are counted as separate items in GDP.
D)   good or services that are not technically complex.E) A) and B)
F) B) and C)

Question 14

Which of the following is an example of a U.S. import?

Accepted Answer

A)   A French bottle of wine consumed by an American
B)   An HP computer, made in the United States, purchased by a U.S. college student who plans to study abroad in France
C)   A bushel of apples that Canadians pick and enjoy in Vermont
D)   An HP computer, made in the United States, purchased by a French studentE) None of the above
F) A) and C)

Question 15

GDP per capita:

Accepted Answer

A)   is an average income per person in an economy.
B)   tells us about how output is allocated within an economy.
C)   helps us decide what can be bought with a given amount of money in an economy.
D)   All of these are true.E) A) and D)
F) A) and B)

Question 16

Using the income approach to calculating GDP, in a simple closed economy, the national income equals:

Accepted Answer

A)   wages + interest + rental income + profits.
B)   wages + interest + government income + profits
C)   wages + government spending + earned interest + investment + profits
D)   wages + interest + rental income - profits.E) C) and D)
F) A) and B)

Question 17

Which of the following is a final good?

Accepted Answer

A)   Chocolate chips purchased by Nabisco to make Keebler chocolate chip cookies
B)   Chocolate chips purchased by Karen to make chocolate chip cookies for her kids
C)   Chocolate chips purchased by Giordano's to make the skillet chocolate chip cookie on its menu
D)   Semisweet chocolate used to make Cocoa Krispies cerealE) C) and D)
F) A) and B)

Question 18

Which of the following is an intermediate good?

Accepted Answer

A)   The tomatoes Sally grows in her garden for personal use
B)   The tomatoes Carlos buys at a local farmer's stand to make salsa for a party he's hosting
C)   The tomatoes Tsubasa buys from the grocery store to make BLT sandwiches
D)   The tomatoes a farmer sells to a factory to be used in the production of spaghetti sauceE) A) and C)
F) A) and B)

Question 19

A closed economy is one in which:

Accepted Answer

A)   all goods are produced and sold domestically; no outside trade occurs.
B)   all goods are consumed domestically; no goods are exported.
C)   only intermediate goods are sold domestically.
D)   goods are exported, but not imported.E) None of the above
F) A) and B)

Question 20

Chiku decides to open a bagel shop in an up-and-coming neighborhood. She decides to buy an old pizza shop for $150,000 and spends $10,000 installing new equipment that will allow her to make bagels instead of pizza. How will Chiku's recent purchases affect GDP?

Accepted Answer

A)   Investment will increase by $160,000
B)   Investment will increase by $150,000 and consumption will increase by $10,000
C)   Consumption will increase by $150,000 and investment will increase by $10,000
D)   Investment will increase by $10,000E) None of the above
F) All of the above

Exam 7: Measuringgdp

Which of the following does not appear in GDP as a part of government spending?

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Which of the following is a final service?

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All else equal, compared with other countries, an economy with a higher proportion of stay-at-home parents would have:

Correct AnswerverifiedShow Answer

If the GDP per capita of the Vermont Republic is $20,000 and the country has a population of 150,000 people, what is the GDP?

Correct AnswerverifiedShow Answer

Attempting to calculate the value of an economy by adding up the value of every good and service produced would lead to:

Correct AnswerverifiedShow Answer

The most commonly used metric for measuring the value of a national economy is:

Correct AnswerverifiedShow Answer

Net exports equal:

Correct AnswerverifiedShow Answer

Intermediate goods and services are:

Correct AnswerverifiedShow Answer

Rachel decides to buy a house for $200,000. The only thing Rachel needs to do is replace all the gutters for $1,000, which she happily does. How will GDP be affected by Rachel's recent purchases?

Correct AnswerverifiedShow Answer

Using the income approach to calculating GDP, in a simple closed economy, the national income equals:

Correct AnswerverifiedShow Answer

One of the most crucial ideas in macroeconomics is understanding that:

Correct AnswerverifiedShow Answer

Which of the following is an example of a U.S. import?

Correct AnswerverifiedShow Answer

Which of the following is a final good?

Correct AnswerverifiedShow Answer

Which of the following is a good that would be counted as consumption in GDP?

Correct AnswerverifiedShow Answer

Chiku decides to open a bagel shop in an up-and-coming neighborhood. She decides to buy an old pizza shop for $150,000 and spends $10,000 installing new equipment that will allow her to make bagels instead of pizza. How will Chiku's recent purchases affect GDP?

Correct AnswerverifiedShow Answer

A closed economy is one in which:

Correct AnswerverifiedShow Answer

Which of the following is an intermediate good?

Correct AnswerverifiedShow Answer

Economists generally use real GDP as a reference point because it:

Correct AnswerverifiedShow Answer

GDP per capita:

Correct AnswerverifiedShow Answer

Yuto is a Japanese citizen working for Toyota at its manufacturing plant located in Tennessee. Yuto's work will contribute toward:

Correct AnswerverifiedShow Answer

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