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Exam 23: Measuring a Nations Income

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Question 121

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If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

A) 104.1 so prices are higher than in the base year.
B) 104.1 so prices are lower than in the base year.
C) 96.1 so prices are higher than in the base year.
D) 96.1 so prices are lower than in the base year.

E) C) and D)
F) B) and D)

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Question 122

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Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included

A) in both German GDP and U.S. GDP.
B) in German GDP, but is not included in U.S. GDP.
C) in U.S. GDP, but is not included in German GDP.
D) in neither German GDP nor U.S. GDP.

E) A) and B)
F) A) and C)

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Question 123

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Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

Java Hut, a U.S. coffee retailer, buys $10 million worth of coffee beans from Colombia. It also pays $5 million for paper cups and utilities, all produced in the U.S. It sells the coffee it produces using the above inputs to U.S. consumers for $50 million. Overall how do these expenditure affect net exports? How do these expenditures effect U.S. consumption?

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities -Refer to Table 23-5. This country's inflation rate from 2016 to 2017 was

After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. These purchases of goods and services are

In the economy of Talikastan in 2015, exports were $500, GDP was $6400, government purchases were $1700, imports were $400, and investment was $1800. What was Talikastan's consumption in 2015?

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Last quarter Newton computers produced 3,000 computers. Two thousand of these computers were sold to households, 750 were sold to businesses, and 250 were added to Newton's inventory. How many of the computers should have been included in last quarter's GDP?

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2011, this country's GDP deflator was

Which of the following is included in government purchases?

Which of the following is included in the calculation of GDP?

Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

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

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2009? Show your work.

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. This country's inflation rate from 2012 to 2013 was