Question 1

Using prices from 2009, GDP grew 10 percent between 2009 and 2010; using prices from 2010, GDP grew 8 percent between 2009 and 2010.For its link back to the base year, the BEA will use ________ percent as the growth in real GDP between 2009 and 2010.

Accepted Answer

A)   10
B)   8
C)   2
D)   18
E)   9F) C) and D)
G) A) and B)

Question 2

The total production within an economy is measured as

Accepted Answer

A)   Gross Home Product.
B)   Total Domestic Output.
C)   Annual Production Value.
D)   Gross Domestic Product.
E)   Total Annual Output.F) B) and C)
G) B) and D)

Question 3

Total income in a country in 2010 is $780 billion.Total expenditure in the country

Accepted Answer

A)   cannot be determined.
B)   is greater than $780 billion.
C)   is $780 billion.
D)   is less than $780 billion.
E)   is either less than or equal to $780 billion.F) A) and B)
G) B) and E)

Question 4

Define and distinguish between final goods and intermediate goods.

Accepted Answer

Final goods are those goods that are pur...

Question 5

Data for 2009 Data for 2010
   Item 	ext { Item } Item  
  Bread 	ext { Bread } Bread  
  Soda 	ext { Soda } Soda   
   Quantity  Price  Quantity  Price 50$4.0070$3.0050$5.0050$6.00\begin{array}{cccc}	ext { Quantity } & 	ext { Price } & 	ext { Quantity } & 	ext { Price } \\hline 50 & \$ 4.00 & 70 & \$ 3.00 \50 & \$ 5.00 & 50 & \$ 6.00\end{array} Quantity 5050​ Price $4.00$5.00​ Quantity 7050​ Price $3.00$6.00​​ 
-The table above gives the production and prices for a small nation that produces only bread and soda.The base year is 2009.What is nominal GDP in 2009?

Accepted Answer

A)   $410
B)   $450
C)   $900
D)   $550
E)   $460 F) A) and B)
G) B) and E)

Question 6

Which of the following is a final good or service?

Accepted Answer

A)   the grilled chicken purchased by Taco Bell for use in their burritos
B)   a new replacement muffler installed by Midas Mufflers
C)   the fertilizer purchased by Royal Lawn and Landscape
D)   the computers purchased by Office Depot for sale to its customers
E)   the CPUs purchased by Dell to be used in their computersF) A) and B)
G) B) and E)

Question 7

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Accepted Answer

A)   Real GDP fluctuates around potential GDP.
B)   Real GDP is always equal to potential GDP.
C)   Real GDP cannot be greater than potential GDP.
D)   Real GDP cannot be less than potential GDP.
E)   Real GDP cannot be equal to potential GDP.F) D) and E)
G) None of the above

Question 8

The difference between nominal GDP and real GDP is

Accepted Answer

A)   the indirect taxes used in their calculations.
B)   the prices used in their calculations.
C)   that nominal GDP includes the depreciation of capital and real GDP does not.
D)   that nominal GDP includes net exports of goods and services and real GDP includes net imports.
E)   that real GDP includes the depreciation of capital and nominal GDP does not.F) B) and E)
G) C) and D)

Question 9

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of living than people in Country B." Is this statement true or false and explain your answer.

Accepted Answer

The statement is false.Factors other tha...

Question 10

Even though it is not a perfect measure, economists can use real GDP to i)  compare how the value of the goods and services produced in China have changed over the past 10 years
Ii)  look at the length of recessions and expansions in the United States
Iii)  to compare the standard of living in China versus the standard of living in Vietnam

Accepted Answer

A)   ii only.
B)   i, ii and iii.
C)   i and iii.
D)   i and ii.
E)   ii and iii.F) None of the above
G) A) and B)

Question 11

Which of the following is NOT included in the income approach to calculating GDP?

Accepted Answer

A)   interest
B)   wages
C)   net exports of goods and services
D)   profits
E)   rentF) B) and C)
G) D) and E)

Question 12

During the business cycle,

Accepted Answer

A)   real GDP fluctuates around nominal GDP.
B)   nominal GDP fluctuates around real GDP.
C)   real GDP fluctuates around its trend.
D)   trend GDP fluctuates around real GDP.
E)   real GDP falls after the trough.F) B) and D)
G) B) and C)

Question 13

Explain how GDP is measured according to the expenditure and income approaches.

Accepted Answer

GDP can be measured using the expenditur...

Question 14

The value of used goods ________ counted as part of GDP ________.

Accepted Answer

A)   are; as long as they are classified as consumption goods.
B)   are; as long as they are classified as investment goods.
C)   are not; because they were counted during the period when they were counted as new goods.
D)   are not; because most fall in value and would cause a decrease in the value of GDP.
E)   may be; as long as their value has risen.F) D) and E)
G) C) and D)

Question 15

According to the income approach to measuring GDP, the largest income category is

Accepted Answer

A)   wages.
B)   interest.
C)   rent.
D)   profits.
E)   consumption expenditure.F) B) and C)
G) A) and B)

Question 16

In order to be classified as a recession, a contraction of general economic activity must last at least

Accepted Answer

A)   one year.
B)   six months.
C)   one period.
D)   one quarter.
E)   None of the above because recessions do not have a minimum length.F) C) and D)
G) A) and D)

Question 17

In 2009, U.S.GDP was

Accepted Answer

A)   $14 trillion using the expenditure approach.
B)   $14 trillion using the income approach.
C)   $14 trillion using the expenditure approach and $13 trillion using the income approach.
D)   $13 trillion using the income approach and $14 trillion using the expenditure approach.
E)   both A and B are correct.F) C) and D)
G) A) and D)

Question 18

Which of the following is likely to be an unreported economic activity?

Accepted Answer

A)   a $25,000 bonus paid to the CEO of a company
B)   tips paid to a taxi driver
C)   the minimum wage paid to a teenager working at a McDonald's
D)   the brokerage fees paid to a broker at Merrill Lynch
E)   the purchase of shares of stock in Walgreen's PharmacyF) A) and B)
G) A) and C)

Question 19

Which of the following would be included in Germany's GNP?

Accepted Answer

A)   the production of BMWs (made by a German-based company)  in South Carolina.
B)   the production of Michelin tires made in Germany by a French company and then sold directly to French consumers.
C)   the production of BMWs in Germany.
D)   the production of Michelin tires made in France by a French company and then sold to BMW in Germany for use in BMW cars.
E)   answers A and C are correct.F) B) and E)
G) C) and D)

Question 20

Which of the following is classified as an intermediate good?
I.the purchase of a Big Mac by a college student
Ii. McDonald's purchase of pickles
Iii. a McDonald's restaurant owner's interest payment for the loan on her building.

Accepted Answer

A)   ii only.
B)   ii and iii.
C)   i only.
D)   i and iii..
E)   i, ii and iii.F) B) and D)
G) A) and B)

Exam 5: Gdp: a Measure of Total Production and Income

Which of the following is NOT included in the income approach to calculating GDP?

Correct Answer
verified

In order to be classified as a recession, a contraction of general economic activity must last at least

Correct Answer
verified

Which of the following is a final good or service?

Correct Answer
verified

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Correct Answer
verified

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of living than people in Country B." Is this statement true or false and explain your answer.

Correct Answer
verified
The statement is false.Factors other tha...
View Answer

Total income in a country in 2010 is $780 billion.Total expenditure in the country

Correct Answer
verified

Define and distinguish between final goods and intermediate goods.

Correct Answer
verified
Final goods are those goods that are pur...
View Answer

Using prices from 2009, GDP grew 10 percent between 2009 and 2010; using prices from 2010, GDP grew 8 percent between 2009 and 2010.For its link back to the base year, the BEA will use ________ percent as the growth in real GDP between 2009 and 2010.

Correct Answer
verified

During the business cycle,

Correct Answer
verified

In 2009, U.S.GDP was

Correct Answer
verified

Which of the following would be included in Germany's GNP?

Correct Answer
verified

Which of the following is likely to be an unreported economic activity?

Correct Answer
verified

Which of the following is classified as an intermediate good? I.the purchase of a Big Mac by a college student Ii. McDonald's purchase of pickles Iii. a McDonald's restaurant owner's interest payment for the loan on her building.

Correct Answer
verified

Correct Answer
verified

According to the income approach to measuring GDP, the largest income category is

Correct Answer
verified

The value of used goods counted as part of GDP .

Correct Answer
verified

Correct Answer
verified

The total production within an economy is measured as

Correct Answer
verified

Explain how GDP is measured according to the expenditure and income approaches.

Correct Answer
verified
GDP can be measured using the expenditur...
View Answer

The difference between nominal GDP and real GDP is

Correct Answer
verified

Exam 5: Gdp: a Measure of Total Production and Income

Which of the following is NOT included in the income approach to calculating GDP?

Correct AnswerverifiedShow Answer

In order to be classified as a recession, a contraction of general economic activity must last at least

Correct AnswerverifiedShow Answer

Which of the following is a final good or service?

Correct AnswerverifiedShow Answer

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?

Correct AnswerverifiedShow Answer

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of living than people in Country B." Is this statement true or false and explain your answer.

Correct AnswerverifiedThe statement is false.Factors other tha...View AnswerShow Answer

Total income in a country in 2010 is $780 billion.Total expenditure in the country

Correct AnswerverifiedShow Answer

Define and distinguish between final goods and intermediate goods.

Correct AnswerverifiedFinal goods are those goods that are pur...View AnswerShow Answer

Using prices from 2009, GDP grew 10 percent between 2009 and 2010; using prices from 2010, GDP grew 8 percent between 2009 and 2010.For its link back to the base year, the BEA will use ________ percent as the growth in real GDP between 2009 and 2010.

Correct AnswerverifiedShow Answer

During the business cycle,

Correct AnswerverifiedShow Answer

In 2009, U.S.GDP was

Correct AnswerverifiedShow Answer

Which of the following would be included in Germany's GNP?

Correct AnswerverifiedShow Answer

Which of the following is likely to be an unreported economic activity?

Correct AnswerverifiedShow Answer

Which of the following is classified as an intermediate good? I.the purchase of a Big Mac by a college student Ii. McDonald's purchase of pickles Iii. a McDonald's restaurant owner's interest payment for the loan on her building.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the income approach to measuring GDP, the largest income category is

Correct AnswerverifiedShow Answer

The value of used goods ________ counted as part of GDP ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The total production within an economy is measured as

Correct AnswerverifiedShow Answer

Explain how GDP is measured according to the expenditure and income approaches.

Correct AnswerverifiedGDP can be measured using the expenditur...View AnswerShow Answer

The difference between nominal GDP and real GDP is

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The statement is false.Factors other tha...
View Answer

Correct Answer
verified

Correct Answer
verified
Final goods are those goods that are pur...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The value of used goods counted as part of GDP .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
GDP can be measured using the expenditur...
View Answer

Correct Answer
verified