Question 1

The income that households and noncorporate businesses receive is called

Accepted Answer

A)   personal income.
B)   net national product.
C)   disposable personal income.
D)   national income.E) B) and C)
F) All of the above

Question 2

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

Accepted Answer

A)   16.7%.
B)   10.0%.
C)   15.0%.
D)   -9.1%.E) None of the above
F) A) and B)

Question 3

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Accepted Answer

GDP is reported ever...

Question 4

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Accepted Answer

The answer of Calculate GDP for a country with investment...

Question 5

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Accepted Answer

A) True 
 B)False

Question 6

In the actual economy, goods and services are purchased by

Accepted Answer

A)   households, but not firms or the government.
B)   households and firms, but not the government.
C)   households and the government, but not firms.
D)   households, firms, and the government.E) A) and C)
F) All of the above

Question 7

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Accepted Answer

A)   raises GDP.
B)   decreases GDP.
C)   doesn't change GDP because gambling is never included in GDP.
D)   doesn't change GDP because in either case his income is included.E) A) and B)
F) A) and D)

Question 8

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 9

Underground economic activity as a percentage of GDP was highest in

Accepted Answer

A)   Bolivia.
B)   Mexico.
C)   Australia.
D)   the United States.E) A) and D)
F) B) and C)

Question 10

Transfer payments

Accepted Answer

A)   are payments that flow from government to households.
B)   are not made in exchange for currently produced goods or services.
C)   alter household income, but they do not reflect the economy's production.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 11

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

Accepted Answer

A)   U.S. investment and GDP increase, but German GDP is unaffected.
B)   U.S. investment and German GDP increase, but U.S. GDP is unaffected.
C)   U.S. investment, U.S. GDP, and German GDP are unaffected because tractors are intermediate goods.
D)   U.S. investment, U.S. GDP, and German GDP all increase.E) A) and B)
F) A) and C)

Question 12

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur...

Question 13

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.E) B) and C)
F) A) and D)

Question 14

Table 23-3
The table below contains data for the country of Crete for the year 2010.
 
-Refer to Table 23-3. What was Crete's consumption in 2010?

Accepted Answer

A)   $1810
B)   $2013
C)   $2315
D)   $3131E) A) and C)
F) A) and D)

Question 15

Explain the pattern seen between GDP per person and quality of life measures such as life expectancy, literacy, and Internet usage.

Accepted Answer

They are closely associated; c...

Question 16

Retained earnings is income that

Accepted Answer

A)   households retain after paying taxes.
B)   businesses retain after paying taxes.
C)   corporations have earned but have not used to invest in plant, equipment, and inventories.
D)   corporations have earned but have not paid out to their owners.E) B) and C)
F) None of the above

Question 17

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Accepted Answer

A)   1/3 times as much to GDP as the production of good B.
B)   3/2 times as much to GDP as the production of good B.
C)   3 times as much to GDP as the production of good B.
D)   2/3 times as much to GDP as production of good B.E) None of the above
F) A) and D)

Question 18

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Accepted Answer

A) True 
 B)False

Question 19

In years of economic contraction, firms throughout the economy increase their production of goods and services, employment rises, and jobs are easy to find.

Accepted Answer

A) True 
 B)False

Question 20

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Accepted Answer

A) True 
 B)False

Exam 15: Measuring a Nations Income

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

How frequently is U.S. GDP reported? Is GDP adjusted for seasonality?

Correct AnswerverifiedGDP is reported ever...View AnswerShow Answer

Calculate GDP for a country with investment of $2 trillion, government purchases of $3 trillion, capital depreciation of $1.5 trillion, consumption of $10 trillion, exports of $3.4 trillion, and imports of $3.9 trillion.

Correct AnswerverifiedShow Answer

The income that households and noncorporate businesses receive is called

Correct AnswerverifiedShow Answer

Transfer payments

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Retained earnings is income that

Correct AnswerverifiedShow Answer

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Correct AnswerverifiedIntermediate goods produced and sold dur...View AnswerShow Answer

In years of economic contraction, firms throughout the economy increase their production of goods and services, employment rises, and jobs are easy to find.

Correct AnswerverifiedShow Answer

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes

Correct AnswerverifiedShow Answer

In the actual economy, goods and services are purchased by

Correct AnswerverifiedShow Answer

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

Correct AnswerverifiedShow Answer

If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125.

Correct AnswerverifiedShow Answer

If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose.

Correct AnswerverifiedShow Answer

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

Correct AnswerverifiedShow Answer

Explain the pattern seen between GDP per person and quality of life measures such as life expectancy, literacy, and Internet usage.

Correct AnswerverifiedThey are closely associated; c...View AnswerShow Answer

Underground economic activity as a percentage of GDP was highest in

Correct AnswerverifiedShow Answer

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

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

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's consumption in 2010?

Correct AnswerverifiedShow Answer

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Correct AnswerverifiedShow Answer

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GDP is reported ever...
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Intermediate goods produced and sold dur...
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They are closely associated; c...
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