Question 1

If nominal GDP for an economy is $10,444 billion and the price index is 110, then real GDP is $9495.

Accepted Answer

A) True 
 B)False

Question 2

- Refer to the above diagram. A shift in the production possibilities curve from AB to CD is most likely due to:

Accepted Answer

A)   the use of the economy's resources in an efficient way.
B)   an increase in the spending of business and consumers.
C)   an increase in government purchase of the economy's output.
D)   an increase in the quantity and quality of labor resources.E) A) and B)
F) C) and D)

Question 3

Which represents an expenditure that would be counted directly in GDP?

Accepted Answer

A)   The buying of corporate stock by an investor.
B)   The buying of a used car by a consumer.
C)   The payment of military salaries by the government.
D)   The distribution of corporate profits to stockholders.E) None of the above
F) A) and C)

Question 4

Transfer payments such as Social Security or unemployment compensation are counted in the calculation of GDP.

Accepted Answer

A) True 
 B)False

Question 5

In an economy that experiences no change in its stock of capital:

Accepted Answer

A)   the consumption of private fixed capital exceeds gross investment.
B)   no capital goods are being produced.
C)   gross investment is zero.
D)   net investment is zero.E) C) and D)
F) A) and B)

Question 6

If there is an increase in labor productivity:

Accepted Answer

A)   the production possibilities curve would shift outward and the long-run aggregate supply curve would shift rightward.
B)   the production possibilities curve would shift inward and the long-run aggregate supply curve would shift leftward.
C)   the production possibilities curve would shift outward and the long-run aggregate supply curve would shift leftward.
D)   the production possibilities curve would shift inward and the long-run aggregate supply curve would shift rightward.E) A) and B)
F) B) and C)

Question 7

All of the following are sources of increasing returns and economies of scale except:

Accepted Answer

A)   network effects.
B)   spreading of development costs.
C)   more specialized inputs.
D)   coordination problems in large organizations.E) A) and D)
F) A) and C)

Question 8

If imports are greater than exports, then the difference between them will be added to other expenditures to calculate GDP.

Accepted Answer

A) True 
 B)False

Question 9

In 2017, Kara sold her used car to Augi's Used Cars, a local dealership, for $2,000. Augi's then serviced and cleaned the car and sold it to Alex for $3,000. How much would these transactions add to GDP in 2017?

Accepted Answer

A)   $0
B)   $1,000.
C)   $2,000.
D)   $3,000.E) B) and C)
F) A) and D)

Question 10

- Refer to the above diagram. Negative economic growth can be shown by a:

Accepted Answer

A)   shift of EF to AB.
B)   movement along AB from point 2 to point 3.
C)   shift of AB to CD.
D)   shift of CD to AB.E) A) and D)
F) B) and C)

Question 11

An example of a public transfer payment is a(n) :

Accepted Answer

A)   airline pass giving price discounts to senior citizens.
B)   monthly allowance from home for a college student.
C)   gift of land from a wealthy relative.
D)   veteran's benefit payment.E) A) and D)
F) C) and D)

Question 12

Suppose an economy produces only three products, A, B, and C. Quantity purchased and changes in the prices of these items over a period are shown below:

- Using year 1 as a base, the value of the country's nominal GDP in year 1:

Accepted Answer

A)   cannot be determined with the information given.
B)   is $850.
C)   is $3,270.
D)   is $800.E) C) and D)
F) A) and D)

Question 13

Supporters of the World Trade Organization contend that it:

Accepted Answer

A)   imposes safeguards for worker safety in member nations.
B)   weakens the environmental laws in member nations.
C)   undermines minimum wage laws in member nations.
D)   liberalizes trade among member nations.E) All of the above
F) B) and D)

Question 14

A definition of the gross domestic product (GDP)  is:

Accepted Answer

A)   personal consumption expenditures, gross private domestic investment, and net exports.
B)   the sum of wage and salary compensation of employees, interest income, and rental income.
C)   the market value of all intermediate goods and services produced by the economy in one year.
D)   the market value of final goods and services produced by the economy in one year.E) All of the above
F) A) and C)

Question 15

Assume an economy is producing only one product. Year 2 is the base year. Output and price data for a five-year period are given.
 
-Refer to the above data. If year 2 is the base year, then for the years shown, the growth of:

Accepted Answer

A)   real GDP has exceeded the growth of nominal GDP.
B)   nominal GDP exactly reflects increases in real output.
C)   nominal GDP overstates increases in real output.
D)   nominal GDP understates increases in real output.E) None of the above
F) A) and B)

Question 16

An example of an intermediate good or service would be:

Accepted Answer

A)   a calculator purchased by a college student for taking exams.
B)   gasoline used by an insurance agent visiting clients.
C)   a house bought by a banking executive with five children.
D)   a boat bought by a medical doctor for use on vacation.E) A) and C)
F) A) and B)

Question 17

Net exports is a positive number when:

Accepted Answer

A)   gross private domestic investment is greater than depreciation.
B)   depreciation is greater than gross private domestic investment.
C)   a nation's exports of goods and services exceed its imports.
D)   a nation's imports of goods and services exceed its exports.E) A) and B)
F) A) and C)

Question 18

Which of the following is a true statement?

Accepted Answer

A)   Economists who support economic growth say that it is the most practical route to the higher standards of living the vast majority of people desire.
B)   Most economists believe that the recent productivity acceleration implies an end to the business cycle.
C)   Most economists believe that increases in real GDP actually produce decreases in overall economic well-being because of spillover costs.
D)   Mainstream economists disagree as to whether the rate or productivity growth was higher between 1995 and 2009 than between 1973 and 1995.E) A) and B)
F) B) and C)

Question 19

If the rate of growth in labor productivity averages 2 percent a year, it will take about 20 years for the standard of living to double.

Accepted Answer

A) True 
 B)False

Exam 10: GDP and Economic Growth

In an economy that experiences no change in its stock of capital:

Correct Answer
verified

Suppose an economy produces only three products, A, B, and C. Quantity purchased and changes in the prices of these items over a period are shown below: - Using year 1 as a base, the value of the country's nominal GDP in year 1:

Correct Answer
verified

Assume an economy is producing only one product. Year 2 is the base year. Output and price data for a five-year period are given. -Refer to the above data. If year 2 is the base year, then for the years shown, the growth of:

Correct Answer
verified

If imports are greater than exports, then the difference between them will be added to other expenditures to calculate GDP.

Correct Answer
verified

- Refer to the above diagram. A shift in the production possibilities curve from AB to CD is most likely due to:

Correct Answer
verified

All of the following are sources of increasing returns and economies of scale except:

Correct Answer
verified

- Refer to the above diagram. Negative economic growth can be shown by a:

Correct Answer
verified

If nominal GDP for an economy is $10,444 billion and the price index is 110, then real GDP is $9495.

Correct Answer
verified

If there is an increase in labor productivity:

Correct Answer
verified

In 2017, Kara sold her used car to Augi's Used Cars, a local dealership, for $2,000. Augi's then serviced and cleaned the car and sold it to Alex for $3,000. How much would these transactions add to GDP in 2017?

Correct Answer
verified

Supporters of the World Trade Organization contend that it:

Correct Answer
verified

Which represents an expenditure that would be counted directly in GDP?

Correct Answer
verified

Net exports is a positive number when:

Correct Answer
verified

If the rate of growth in labor productivity averages 2 percent a year, it will take about 20 years for the standard of living to double.

Correct Answer
verified

An example of an intermediate good or service would be:

Correct Answer
verified

An example of a public transfer payment is a(n) :

Correct Answer
verified

A definition of the gross domestic product (GDP) is:

Correct Answer
verified

Which of the following is a true statement?

Correct Answer
verified

Transfer payments such as Social Security or unemployment compensation are counted in the calculation of GDP.

Correct Answer
verified

Exam 10: GDP and Economic Growth

In an economy that experiences no change in its stock of capital:

Correct AnswerverifiedShow Answer

Suppose an economy produces only three products, A, B, and C. Quantity purchased and changes in the prices of these items over a period are shown below: - Using year 1 as a base, the value of the country's nominal GDP in year 1:

Correct AnswerverifiedShow Answer

Assume an economy is producing only one product. Year 2 is the base year. Output and price data for a five-year period are given. -Refer to the above data. If year 2 is the base year, then for the years shown, the growth of:

Correct AnswerverifiedShow Answer

If imports are greater than exports, then the difference between them will be added to other expenditures to calculate GDP.

Correct AnswerverifiedShow Answer

- Refer to the above diagram. A shift in the production possibilities curve from AB to CD is most likely due to:

Correct AnswerverifiedShow Answer

All of the following are sources of increasing returns and economies of scale except:

Correct AnswerverifiedShow Answer

- Refer to the above diagram. Negative economic growth can be shown by a:

Correct AnswerverifiedShow Answer

If nominal GDP for an economy is $10,444 billion and the price index is 110, then real GDP is $9495.

Correct AnswerverifiedShow Answer

If there is an increase in labor productivity:

Correct AnswerverifiedShow Answer

In 2017, Kara sold her used car to Augi's Used Cars, a local dealership, for $2,000. Augi's then serviced and cleaned the car and sold it to Alex for $3,000. How much would these transactions add to GDP in 2017?

Correct AnswerverifiedShow Answer

Supporters of the World Trade Organization contend that it:

Correct AnswerverifiedShow Answer

Which represents an expenditure that would be counted directly in GDP?

Correct AnswerverifiedShow Answer

Net exports is a positive number when:

Correct AnswerverifiedShow Answer

If the rate of growth in labor productivity averages 2 percent a year, it will take about 20 years for the standard of living to double.

Correct AnswerverifiedShow Answer

An example of an intermediate good or service would be:

Correct AnswerverifiedShow Answer

An example of a public transfer payment is a(n) :

Correct AnswerverifiedShow Answer

A definition of the gross domestic product (GDP) is:

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Transfer payments such as Social Security or unemployment compensation are counted in the calculation of GDP.

Correct AnswerverifiedShow Answer

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