Question 1

Military goods purchased by the government are

Accepted Answer

A)  not included in GDP.
B)  measured in GDP by their cost of production.
C)  measured in GDP by how much their goods add to the economic well-being.
D)  measured in GDP only if the government sells these goods to another country.E) C) and D)
F) A) and B)

Question 2

Unreported income from legal and illegal sources is referred to as the ___.

Accepted Answer

The answer of Unreported income from legal and illegal sources...

Question 3

In comparing GDP data over a period of years a difference between GDP and real GDP may arise because

Accepted Answer

A)  Of changes in our trade deficits and surpluses.
B)  The length of the workweek has declined historically.
C)  The price level may change over time.
D)  Depreciation may be greater or smaller than gross investment.E) A) and B)
F) A) and C)

Question 4

Which one of the following is a final good or service?

Accepted Answer

A)  Microcomputer chips for a new computer
B)  A radio bought by General Motors for use in its new line of cars
C)  Chemical pesticides used by a farmer to control the incidence of crop disease
D)  A will drawn up by your personal attorney
E)  The lead added to gasoline to increase the octane ratingF) A) and E)
G) C) and D)

Question 5

Statement I: When there is inflation,real GDP will be greater than GDP.
Statement II: The greater depreciation is,the greater the difference between GDP and NDP.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) C) and D)
F) All of the above

Question 6

Suppose that GDP is equal to $8 trillion.If net exports are -$1 trillion,consumption is $5 trillion,and investment is $2 trillion it follows that

Accepted Answer

A)  government purchases are zero.
B)  government purchases are $1 trillion.
C)  government purchases are $2 trillion.
D)  government purchases are $3 trillion.E) A) and D)
F) B) and C)

Question 7

Assume that the size of the "underground economy" increases both absolutely and relatively over time.As a result

Accepted Answer

A)  real GDP will rise more rapidly than GDP.
B)  GDP will tend to increasingly understate the level of output through time.
C)  GDP will tend to increasingly overstate the level of output through time.
D)  the accuracy of GDP will be unaffected through time.E) C) and D)
F) A) and B)

Question 8

Which of the following is NOT a part of GDP?

Accepted Answer

A)  The value of sales of stocks and bonds bought and sold during the year
B)  The value of a haircut
C)  The value of a new car produced and purchased during the year
D)  The value of new houses built during the yearE) C) and D)
F) None of the above

Question 9

Net investment is equal to

Accepted Answer

A)  GDP minus depreciation.
B)  depreciation.
C)  gross investment minus taxes.
D)  gross investment minus depreciation.E) B) and C)
F) All of the above

Question 10

Which statement is true?

Accepted Answer

A)  Per capita real GDP fell.
B)  Per capita real GDP remained constant.
C)  Per capita real GDP rose by nearly 60 percent.
D)  Per capita real GDP rose by 60 percent.
E)  Per capita real GDP rose by more than 60 percent.F) D) and E)
G) A) and B)

Question 11

The increase in the proportion of women in the labor force causes GDP to _____ the growth in economic well-being because ___.

Accepted Answer

A)  overstate;some of the services that women formerly provided in the home are now purchased in the market
B)  overstate;the services that women provide in the home do not contribute to economic well-being
C)  understate;some of the services that women formerly provided in the home are now purchased in the market
D)  understate;the services that women provide in the home do not contribute to economic well-beingE) C) and D)
F) B) and C)

Question 12

If GDP rose from $4 trillion to $5 trillion and the GDP deflator rose from 100 to 125,then we may conclude there was no ___.

Accepted Answer

economic g...

Question 13

The nation of Upper Volta has a population of 100 million and a GDP of $4 trillion;the nation of Lower Volta has a population of 20 million and a GDP of $600 billion.

Accepted Answer

A)  Upper Volta has a higher per capita GDP than Lower VoltA.
B)  Lower Volta has a higher per capita GDP than Upper Volta.
C)  The per capita GDPs of the two nations are equal.
D)  There is not enough information to determine the relative per capita GDPs of the two nations.E) A) and B)
F) B) and D)

Question 14

GDP is a less than perfect measure of economic well-being.It may be faulted for each of these practices except that it

Accepted Answer

A)  does not take leisure time into account.
B)  involves multiple counting.
C)  does not take psychic costs into account.
D)  does not take psychic income into account.E) None of the above
F) A) and D)

Question 15

If GDP rises from $10 trillion to $10.5 trillion and real GDP rises from $10 trillion to $10.1 trillion,find the percentage change in the GDP deflator.

Accepted Answer

% change in GDP = % change in ...

Question 16

National income

Accepted Answer

A)  minus depreciation equals NDP.
B)  plus depreciation plus indirect business taxes equals GDP.
C)  minus inflation equals real GDP.
D)  plus transfer payments equals personal income.E) C) and D)
F) All of the above

Question 17

Gross domestic product includes

Accepted Answer

A)  only intermediate goods and services.
B)  only final goods and services.
C)  both intermediate and final goods.
D)  neither intermediate nor final goods.E) A) and C)
F) A) and B)

Question 18

Which of the following is currently not included in gross domestic product?

Accepted Answer

A)  The building of a new interstate highway
B)  The value of the time a person spends painting his or her own garage
C)  The services of a clerk in a retail grocery store
D)  The production of a new car by an American automobile manufacturer
E)  The value of a newly constructed private houseF) A) and B)
G) A) and E)

Question 19

If GDP rose from $6 trillion to $9 trillion and prices stayed the same over this period

Accepted Answer

A)  real GDP fell by 100 percent.
B)  real GDP fell by 50 percent.
C)  real GDP stayed the same.
D)  real GDP rose by 50 percent.
E)  real GDP rose by 100 percent.F) C) and E)
G) A) and B)

Question 20

If real GDP is decreasing,

Accepted Answer

A)  GDP must be increasing.
B)  GDP must be decreasing.
C)  prices must also be decreasing.
D)  employment in the economy must be increasing.
E)  None of the choices are correct.F) C) and D)
G) None of the above

Exam 9: Gross Domestic Product

Suppose that GDP is equal to $8 trillion.If net exports are -$1 trillion,consumption is $5 trillion,and investment is $2 trillion it follows that

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Which of the following is NOT a part of GDP?

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The nation of Upper Volta has a population of 100 million and a GDP of $4 trillion;the nation of Lower Volta has a population of 20 million and a GDP of $600 billion.

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The increase in the proportion of women in the labor force causes GDP to _____ the growth in economic well-being because ___.

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If GDP rises from $10 trillion to $10.5 trillion and real GDP rises from $10 trillion to $10.1 trillion,find the percentage change in the GDP deflator.

Correct Answerverified% change in GDP = % change in ...View AnswerShow Answer

Unreported income from legal and illegal sources is referred to as the ___.

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Net investment is equal to

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Which one of the following is a final good or service?

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GDP is a less than perfect measure of economic well-being.It may be faulted for each of these practices except that it

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Which of the following is currently not included in gross domestic product?

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In comparing GDP data over a period of years a difference between GDP and real GDP may arise because

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Which statement is true?

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Gross domestic product includes

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If GDP rose from $6 trillion to $9 trillion and prices stayed the same over this period

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If real GDP is decreasing,

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Assume that the size of the "underground economy" increases both absolutely and relatively over time.As a result

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Military goods purchased by the government are

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If GDP rose from $4 trillion to $5 trillion and the GDP deflator rose from 100 to 125,then we may conclude there was no ___.

Correct Answerverifiedeconomic g...View AnswerShow Answer

Statement I: When there is inflation,real GDP will be greater than GDP. Statement II: The greater depreciation is,the greater the difference between GDP and NDP.

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National income

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The increase in the proportion of women in the labor force causes GDP to ___ the growth in economic well-being because _.

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% change in GDP = % change in ...
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economic g...
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