Question 1

The information for 2008 in millions in the table below was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of real GDP per person from highest to lowest?

Accepted Answer

A)   Japan,Germany,United States
B)   Japan,United States,Germany
C)   Germany,United States,Japan
D)   United States,Japan,GermanyE) B) and D)
F) C) and D)

Question 2

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays the salary of a Navy officer.
B)   The state of Nevada pays a private firm to repair a Nevada state highway.
C)   The city of Las Vegas,Nevada pays a private firm to collect garbage in that city.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 3

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

Accepted Answer

A)   In 2010,Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2010.
B)   An Irish marketing consultant works in Boston during the summer of 2010 and earns $50,000 during that time.
C)   When Tim and Tina were both single,they lived in separate apartments and each paid $750 in rent.Tim and Tina got married in 2010 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,550 per month.
D)   All of the above transactions add to U.S.GDP for 2006.E) A) and D)
F) A) and C)

Question 4

In the economy of Ukzten in 2010,consumption was $6000,exports were $1000,GDP was $10,000,government purchases were $2000,and imports were $600.What was Ukzten's investment in 2010?

Accepted Answer

A)   $1400
B)   $1600
C)   $2400
D)   $3600E) All of the above
F) None of the above

Question 5

If net exports is a negative number for a particular year,then

Accepted Answer

A)   the value of firms' inventories declined over the course of the year.
B)   consumption exceeded the sum of investment and government purchases during the year.
C)   the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year.
D)   the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.E) All of the above
F) A) and C)

Question 6

In the economy of Ukzten in 2010,consumption was $3000,exports were $200,GDP was $8000,government purchases were $1000,and imports were $600.What was Ukzten's investment in 2010?

Accepted Answer

A)   $3200
B)   $3600
C)   $3800
D)   $4400E) A) and C)
F) B) and D)

Question 7

To encourage formation of small businesses,the government could provide subsidies; these subsidies

Accepted Answer

A)   would be included in GDP because they are part of government purchases.
B)   would be included in GDP because they are part of investment expenditures.
C)   would not be included in GDP because they are transfer payments.
D)   would not be included in GDP because the government raises taxes to pay for them.E) None of the above
F) A) and C)

Question 8

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 GDP in 2010?

Accepted Answer

A)   $6359
B)   $7136
C)   $7253
D)   $8147E) C) and D)
F) B) and C)

Question 9

Suppose an economy produces only eggs and ham.In 2009,100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound.In 2010,the base year,eggs sold at $1.50 per dozen and ham sold at $5 per pound.For 2009,

Accepted Answer

A)   nominal GDP is $400,real GDP is $500,and the GDP deflator is 80.
B)   nominal GDP is $400,real GDP is $500,and the GDP deflator is 125.
C)   nominal GDP is $500,real GDP is $400,and the GDP deflator is 80.
D)   nominal GDP is $500,real GDP is $400,and the GDP deflator is 125.E) B) and D)
F) B) and C)

Question 10

National income differs from net national because

Accepted Answer

A)   it includes profits of corporations.
B)   of a statistical discrepancy.
C)   it includes transfer payments.
D)   it excludes depreciation.E) A) and B)
F) None of the above

Question 11

GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

Accepted Answer

A) True 
 B)False

Question 12

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 13

If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175,then the inflation rate in 2010 was 25%.

Accepted Answer

A) True 
 B)False

Question 14

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 15

During the current quarter,a firm produces consumer goods and adds some of those goods to its inventory rather than selling them.The value of the goods added to inventory is

Accepted Answer

A)   not included in the current quarter GDP.
B)   included in the current quarter GDP as investment.
C)   included in the current quarter GDP as consumption.
D)   included in the current quarter GDP as a statistical discrepancy.E) B) and D)
F) B) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Accepted Answer

A) True 
 B)False

Question 18

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) A) and B)
F) All of the above

Question 19

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

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) A) and B)
F) A) and D)

Question 20

For monitoring fluctuations in the national economy,which measure of income is best?

Accepted Answer

A)   GDP
B)   GNP
C)   NNP
D)   It does not matter very much which measure we use.E) A) and B)
F) B) and C)

Exam 15: Measuring a Nations Income

National income differs from net national because

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During the current quarter,a firm produces consumer goods and adds some of those goods to its inventory rather than selling them.The value of the goods added to inventory is

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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 GDP in 2010?

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The information for 2008 in millions in the table below was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of real GDP per person from highest to lowest?

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In the economy of Ukzten in 2010,consumption was $3000,exports were $200,GDP was $8000,government purchases were $1000,and imports were $600.What was Ukzten's investment in 2010?

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GDP is the market value of all final goods and services produced by a country's citizens in a given period of time.

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

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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?

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

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To encourage formation of small businesses,the government could provide subsidies; these subsidies

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Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

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

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If net exports is a negative number for a particular year,then

Correct AnswerverifiedShow Answer

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

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Which of the following items is counted as part of government purchases?

Correct AnswerverifiedShow Answer

Suppose an economy produces only eggs and ham.In 2009,100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound.In 2010,the base year,eggs sold at $1.50 per dozen and ham sold at $5 per pound.For 2009,

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next,then the economy must be producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $6000,exports were $1000,GDP was $10,000,government purchases were $2000,and imports were $600.What was Ukzten's investment in 2010?

Correct AnswerverifiedShow Answer

For monitoring fluctuations in the national economy,which measure of income is best?

Correct AnswerverifiedShow Answer

If the GDP deflator in 2009 was 150 and the GDP deflator in 2010 was 175,then the inflation rate in 2010 was 25%.

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