Question 1

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 2

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 3

Tom and Lilly rented a house for $12,000 last year. At the start of the year they bought the house they had been renting directly from the owner for $250,000. They believe they could rent it for $12,000 this year, but stay in the house. How much does Tom and Lilly's decision to buy the house change GDP?

Accepted Answer

A)   it reduces GDP by $12,000
B)   it does not change GDP
C)   it raises GDP by $238,000
D)   it raises GDP by $250,000E) A) and B)
F) A) and C)

Question 4

When an American household purchases a bottle of Italian wine for $100,

Accepted Answer

A)   U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100.
B)   U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100.
C)   U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.
D)   U.S. consumption increases by $100, U.S. net exports do not change, and U.S. GDP increases by $100.E) C) and D)
F) A) and B)

Question 5

Explain how GNP differs from GDP.

Accepted Answer

GNP includes income from a nat...

Question 6

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)   in government expenditures and exports.
B)   government expenditures and imports.
C)   exports, but not government expenditures.
D)   imports, but not government expenditures.E) A) and B)
F) B) and C)

Question 7

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. In 2015, this country's

Accepted Answer

A)   nominal GDP was greater than real GDP, and the GDP deflator was greater than 100.
B)   nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%.
C)   nominal GDP was less than real GDP, and the GDP deflator was less than 100.
D)   nominal GDP was equal to real GDP, and the GDP deflator was equal to 100.E) B) and C)
F) All of the above

Question 8

Much of macroeconomics attempts to explain

Accepted Answer

A)   changes in the price of oil and gasoline.
B)   long-run growth and short-run fluctuations in real GDP.
C)   changes in the growth rate of state government spending.
D)   changes in the prices and quantities of individual goods and services.E) B) and C)
F) A) and B)

Question 9

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Accepted Answer

A)   Bolivia, Thailand, United States, Sweden.
B)   Thailand, United States, Sweden, Bolivia.
C)   United States, Bolivia, Sweden, Thailand.
D)   Bolivia, Thailand, Sweden, United States.E) B) and D)
F) B) and C)

Question 10

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Accepted Answer

A)   longer life expectancy and a lower percentage of the population that is literate.
B)   longer life expectancy and a higher percentage of the population that is literate.
C)   very nearly the same life expectancy and a lower percentage of the population that is literate.
D)   very nearly the same life expectancy and a higher percentage of the population that is literate.E) C) and D)
F) A) and D)

Question 11

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Accepted Answer

A)   $1350
B)   $1450
C)   $1050
D)   $1750E) A) and D)
F) A) and C)

Question 12

What three types of goods are included in investment spending?

Accepted Answer

capital equipment, i...

Question 13

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)   consumption, since the goods will be sold to consumers in another period.
B)   intermediate goods, and so is not included in that year's GDP.
C)   investment, since GDP aims to measure the value of the economy's production that year.
D)   spending on durable goods, since the goods could not be inventoried unless they were durable.E) A) and B)
F) A) and C)

Question 14

In the economy of Talikastan in 2015, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $1800, and imports were $1200. What was Talikastan's investment in 2015?

Accepted Answer

A)   $0
B)   $1200
C)   $2400
D)   $5600E) None of the above
F) B) and C)

Question 15

Identify the largest and smallest components of GDP.

Accepted Answer

Consumption is the l...

Question 16

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Accepted Answer

A)   U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases.
B)   U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected.
C)   U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases.
D)   U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected.E) A) and C)
F) B) and C)

Question 17

Total income from the domestic production of final goods and services equals

Accepted Answer

A)   only household expenditures for these goods.
B)   only household and business expenditures for these goods.
C)   only household and government expenditures for these goods.
D)   the expenditures for these goods whoever buys them.E) A) and B)
F) None of the above

Question 18

The underground economy

Accepted Answer

A)   excludes the amount of criminal activity in an economy.
B)   is larger for developed nations than developing nations when measured as a percent of GDP.
C)   includes otherwise legal transactions that go unreported or unrecorded.
D)   in the United States is insignificant is size when compared to the official measure of GDP.E) All of the above
F) C) and D)

Question 19

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. From 2012 to 2013, this country's output grew

Accepted Answer

A)   28.2%.
B)   29.0%.
C)   29.6%.
D)   73.9%.E) B) and C)
F) A) and B)

Question 20

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 2010, this country's GDP deflator was

Accepted Answer

A)   41.9.
B)   100.
C)   165.0.
D)   This cannot be calculated from the information given.E) A) and B)
F) C) and D)

Exam 23: Measuring a Nations Income

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Correct Answer
verified

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 2010, this country's GDP deflator was

Correct Answer
verified

The underground economy

Correct Answer
verified

The value of goods added to a firm's inventory in a certain year is treated as

Correct Answer
verified

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

Correct Answer
verified

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. From 2012 to 2013, this country's output grew

Correct Answer
verified

Identify the largest and smallest components of GDP.

Correct Answer
verified
Consumption is the l...
View Answer

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $1800, and imports were $1200. What was Talikastan's investment in 2015?

Correct Answer
verified

Much of macroeconomics attempts to explain

Correct Answer
verified

Total income from the domestic production of final goods and services equals

Correct Answer
verified

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Correct Answer
verified

What three types of goods are included in investment spending?

Correct Answer
verified
capital equipment, i...
View Answer

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. In 2015, this country's

Correct Answer
verified

When an American household purchases a bottle of Italian wine for $100,

Correct Answer
verified

Explain how GNP differs from GDP.

Correct Answer
verified
GNP includes income from a nat...
View Answer

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct Answer
verified

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Correct Answer
verified

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Correct Answer
verified

Correct Answer
verified

Exam 23: Measuring a Nations Income

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

Correct AnswerverifiedShow Answer

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 2010, this country's GDP deflator was

Correct AnswerverifiedShow Answer

The underground economy

Correct AnswerverifiedShow Answer

The value of goods added to a firm's inventory in a certain year is treated as

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%.

Correct AnswerverifiedShow Answer

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. From 2012 to 2013, this country's output grew

Correct AnswerverifiedShow Answer

Identify the largest and smallest components of GDP.

Correct AnswerverifiedConsumption is the l...View AnswerShow Answer

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $1800, and imports were $1200. What was Talikastan's investment in 2015?

Correct AnswerverifiedShow Answer

Much of macroeconomics attempts to explain

Correct AnswerverifiedShow Answer

Total income from the domestic production of final goods and services equals

Correct AnswerverifiedShow Answer

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Correct AnswerverifiedShow Answer

What three types of goods are included in investment spending?

Correct Answerverifiedcapital equipment, i...View AnswerShow Answer

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. In 2015, this country's

Correct AnswerverifiedShow Answer

When an American household purchases a bottle of Italian wine for $100,

Correct AnswerverifiedShow Answer

Explain how GNP differs from GDP.

Correct AnswerverifiedGNP includes income from a nat...View AnswerShow Answer

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct AnswerverifiedShow Answer

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Correct AnswerverifiedShow Answer

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Consumption is the l...
View Answer

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capital equipment, i...
View Answer

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GNP includes income from a nat...
View Answer

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verified

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