Question 1

Michigan Tea Company sold $15 million worth of tea it produced.In producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in Canada but commute to the U.S.$1 million.How much did these transactions add to U.S.GDP?

Accepted Answer

A)   $21 million
B)   $15 million
C)   $10 million
D)   $9 millionE) All of the above
F) A) and B)

Question 2

Expenditures by households on education are included in the investment component of GDP.

Accepted Answer

A) True 
 B)False

Question 3

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180,then the inflation rate in 2010 was 12.5%.

Accepted Answer

A) True 
 B)False

Question 4

Countries with low GDP per person tend to have

Accepted Answer

A)   lower rates of child malnutrition.
B)   fewer infants with low birth weight.
C)   higher rates of infant mortality.
D)   more access to safe drinking water.E) A) and D)
F) B) and C)

Question 5

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 B)
F) B) and C)

Question 6

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of a durable good?

Accepted Answer

A)   a refrigerator
B)   a quart of motor oil
C)   a business suit
D)   a can of soupE) All of the above
F) A) and B)

Question 8

Recently,the U.S.national income accounts have switched to calling government purchases

Accepted Answer

A)   government spending and transfer payments.
B)   transfer payments and gross investment by government.
C)   government consumption expenditure and gross investment.
D)   government wages,salaries,and investment expenditure.E) None of the above
F) C) and D)

Question 9

If nominal GDP doubles and the GDP deflator doubles,then real GDP

Accepted Answer

A)   remains constant.
B)   doubles.
C)   triples.
D)   quadruples.E) A) and B)
F) C) and D)

Question 10

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

Accepted Answer

A)   both real GDP and nominal GDP
B)   real GDP but not nominal GDP
C)   nominal GDP but not real GDP
D)   neither nominal GDP nor real GDPE) C) and D)
F) None of the above

Question 11

Table 15-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 15-1.What was country A's consumption in 2010?

Accepted Answer

A)   $2018
B)   $3010
C)   $3311
D)   $4015E) C) and D)
F) B) and D)

Question 12

Table 15-1
The table below contains data for Bahkan for the year 2010.
 
-Refer to Table 15-1.Disposable personal income for Bahkan in 2010 is

Accepted Answer

A)   $37.
B)   $44.
C)   $54.
D)   $63.E) A) and B)
F) B) and C)

Question 13

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

Accepted Answer

A)   caused measured GDP to fall.
B)   not caused any change in measured GDP.
C)   caused measured GDP to rise.
D)   probably changed measured GDP,but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted.E) None of the above
F) A) and B)

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

Which of the following transactions adds to U.S.GDP for 2010?

Accepted Answer

A)   In 2010,Ashley sells a car that she bought in 2006 to William for $5,000.
B)   An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time.
C)   When John and Jennifer were both single,they lived in separate apartments and each paid $750 in rent.John and Jennifer got married in 2010 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,600 per month.
D)   None of the above transactions adds to U.S.GDP for 2010.E) All of the above
F) None of the above

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

Suppose an economy's production consists only of corn and soybeans.In 2010,20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel.In 2009,the price of corn was $2 per bushel and the price of soybeans was $1 per bushel.Using 2009 as the base year,it follows that,for 2010,

Accepted Answer

A)   nominal GDP is $50,real GDP is $100,and the GDP deflator is 50.
B)   nominal GDP is $50,real GDP is $100,and the GDP deflator is 200.
C)   nominal GDP is $100,real GDP is $50,and the GDP deflator is 50.
D)   nominal GDP is $100,real GDP is $50,and the GDP deflator is 200.E) A) and D)
F) All of the above

Question 18

Which of the following is not included in U.S.GDP?

Accepted Answer

A)   unpaid cleaning and maintenance of houses
B)   services such as those provided by lawyers and hair stylists
C)   the estimated rental value of owner-occupied housing
D)   production of foreign citizens living in the United StatesE) A) and B)
F) All of the above

Question 19

In a simple circular-flow diagram,

Accepted Answer

A)   households spend all of their income.
B)   all goods and services are bought by households.
C)   expenditures flow through the markets for goods and services,while income flows through the markets for the factors of production.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 20

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Accepted Answer

A)   market prices.
B)   statistical estimates of the value of goods and services to consumers.
C)   prices based on the assumption that producers make no profits.
D)   the maximum amount consumers would be willing to pay.E) None of the above
F) B) and C)

Exam 15: Measuring a Nations Income

Which of the following transactions adds to U.S.GDP for 2010?

Correct Answer
verified

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

Correct Answer
verified

Recently,the U.S.national income accounts have switched to calling government purchases

Correct Answer
verified

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

Correct Answer
verified

Michigan Tea Company sold $15 million worth of tea it produced.In producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in Canada but commute to the U.S.$1 million.How much did these transactions add to U.S.GDP?

Correct Answer
verified

Countries with low GDP per person tend to have

Correct Answer
verified

For an economy as a whole,

Correct Answer
verified

Which of the following is an example of a durable good?

Correct Answer
verified

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

Correct Answer
verified

Correct Answer
verified

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180,then the inflation rate in 2010 was 12.5%.

Correct Answer
verified

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 Answer
verified
Real income is nominal income adjusted f...
View Answer

Which of the following is not included in U.S.GDP?

Correct Answer
verified

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Correct Answer
verified

In a simple circular-flow diagram,

Correct Answer
verified

Table 15-1 The table below contains data for country A for the year 2010. -Refer to Table 15-1.What was country A's consumption in 2010?

Correct Answer
verified

Expenditures by households on education are included in the investment component of GDP.

Correct Answer
verified

If nominal GDP doubles and the GDP deflator doubles,then real GDP

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

Table 15-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 15-1.Disposable personal income for Bahkan in 2010 is

Correct Answer
verified

Exam 15: Measuring a Nations Income

Which of the following transactions adds to U.S.GDP for 2010?

Correct AnswerverifiedShow Answer

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

Correct AnswerverifiedShow Answer

Recently,the U.S.national income accounts have switched to calling government purchases

Correct AnswerverifiedShow Answer

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

Correct AnswerverifiedShow Answer

Michigan Tea Company sold $15 million worth of tea it produced.In producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in Canada but commute to the U.S.$1 million.How much did these transactions add to U.S.GDP?

Correct AnswerverifiedShow Answer

Countries with low GDP per person tend to have

Correct AnswerverifiedShow Answer

For an economy as a whole,

Correct AnswerverifiedShow Answer

Which of the following is an example of a durable good?

Correct AnswerverifiedShow Answer

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the GDP deflator in 2009 was 160 and the GDP deflator in 2010 was 180,then the inflation rate in 2010 was 12.5%.

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

Which of the following is not included in U.S.GDP?

Correct AnswerverifiedShow Answer

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

Correct AnswerverifiedShow Answer

In a simple circular-flow diagram,

Correct AnswerverifiedShow Answer

Table 15-1 The table below contains data for country A for the year 2010. -Refer to Table 15-1.What was country A's consumption in 2010?

Correct AnswerverifiedShow Answer

Expenditures by households on education are included in the investment component of GDP.

Correct AnswerverifiedShow Answer

If nominal GDP doubles and the GDP deflator doubles,then real GDP

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

Table 15-1 The table below contains data for Bahkan for the year 2010. -Refer to Table 15-1.Disposable personal income for Bahkan in 2010 is

Correct AnswerverifiedShow Answer

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Real income is nominal income adjusted f...
View Answer

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verified

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Correct Answer
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