Question 1

Consumption consists of spending by households on goods and services,with the exception of

Accepted Answer

A)   purchases of intangible services.
B)   purchases of durable goods.
C)   purchases of new houses.
D)   spending on education.E) A) and B)
F) C) and D)

Question 2

Suppose an economy produces only burgers and bags of fries.In 2010,4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each.In 2008,the base year,burgers sold for $2.50 each and bags of fries sold for $2 each.

Accepted Answer

A)   nominal GDP is $22,000 real GDP is $21,000,and the GDP deflator is 95.45.
B)   nominal GDP is $22,000,real GDP is $21,000,and the GDP deflator is 104.77.
C)   nominal GDP is $21,000,real GDP is $22,000,and the GDP deflator is 95.45.
D)   nominal GDP is $21,00,real GDP is $22,000,and the GDP deflator is 104.77.E) A) and D)
F) A) and C)

Question 3

Table 15-4
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 2008.
Prices and Quantities
 
-Refer to Table 15-4.This country's inflation rate from 2010 to 2011 was

Accepted Answer

A)   15.4%.
B)   26.1%.
C)   45.5%.
D)   77.8%.E) B) and C)
F) A) and D)

Question 4

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Accepted Answer

A) True 
 B)False

Question 5

The investment component of GDP refers to financial investment in stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 6

Income generated by a nation's domestic production

Accepted Answer

A)   is less than its domestic production.
B)   is equal to its domestic production.
C)   is greater than its domestic production.
D)   could be less than,equal to,or greater than its domestic production.E) B) and C)
F) A) and D)

Question 7

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

Accepted Answer

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) None of the above
F) B) and D)

Question 8

An identity is an equation that

Accepted Answer

A)   describes an equilibrium.
B)   pertains to macroeconomics,not to microeconomics.
C)   must be true because of how the variables in the equation are defined.
D)   involves final goods,not intermediate goods.E) All of the above
F) A) and B)

Question 9

The GDP deflator can be used to take inflation out of nominal GDP.

Accepted Answer

A) True 
 B)False

Question 10

The percentage change in the price level from one period to another is called

Accepted Answer

A)   the growth rate.
B)   the inflation rate.
C)   the GDP deflator.
D)   the unemployment rate.E) None of the above
F) All of the above

Question 11

Because every transaction has a buyer and a seller,

Accepted Answer

A)   GDP is more closely associated with an economy's income than it is with an economy's expenditure.
B)   every transaction contributes equally to an economy's income and to its expenditure.
C)   the number of firms must be equal to the number of households in a simple circular-flow diagram.
D)   firms' profits are necessarily zero in a simple circular-flow diagram.E) A) and D)
F) B) and C)

Question 12

The value of the housing services provided by the economy's owner-occupied houses is

Accepted Answer

A)   included in GDP,and the estimated rental values of the houses are used to place a value on these housing services.
B)   included in GDP,and the actual mortgage payments made on the houses are used to estimate the value of these rental services.
C)   excluded from GDP since these services are not sold in any market.
D)   excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.E) B) and C)
F) None of the above

Question 13

When economists talk about growth in the economy,they measure that growth as the

Accepted Answer

A)   absolute change in nominal GDP from one period to another.
B)   percentage change in nominal GDP from one period to another.
C)   absolute change in real GDP from one period to another.
D)   percentage change in real GDP from one period to another.E) A) and C)
F) None of the above

Question 14

Most goods and services produced at home

Accepted Answer

A)   and most goods and services produced illegally are included in GDP.
B)   are included in GDP while most goods and services produced illegally are excluded from GDP.
C)   are excluded from GDP while most goods and services produced illegally are included in GDP
D)   and most goods and services produced illegally are excluded from GDP.E) B) and C)
F) All of the above

Question 15

Real GDP is the yearly production of final goods and services valued at

Accepted Answer

A)   current prices.
B)   constant prices.
C)   expected future prices.
D)   the ratio of current prices to constant prices.E) All of the above
F) B) and C)

Question 16

A consumer buys toys made in China.The value of the toys is included only in the net exports component of GDP.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not included in U.S.GDP?

Accepted Answer

A)   additions of newly produced output to inventory
B)   production of U.S citizens working in foreign countries.
C)   the estimated rental value of owner-occupied housing
D)   the value of food purchased from a grocery store to make meals at home without payE) B) and C)
F) A) and D)

Question 18

In 2009,government purchases was the largest component of U.S.GDP.

Accepted Answer

A) True 
 B)False

Question 19

Real GDP is a better gauge of economic well-being than is nominal GDP.

Accepted Answer

A) True 
 B)False

Question 20

Macroeconomic statistics tell us about a particular household,firm,or market.

Accepted Answer

A) True 
 B)False

Exam 15: Measuring a Nations Income

Most goods and services produced at home

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The value of the housing services provided by the economy's owner-occupied houses is

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Which of the following is not included in U.S.GDP?

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Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

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

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Suppose an economy produces only burgers and bags of fries.In 2010,4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each.In 2008,the base year,burgers sold for $2.50 each and bags of fries sold for $2 each.

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In 2009,government purchases was the largest component of U.S.GDP.

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Macroeconomic statistics tell us about a particular household,firm,or market.

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Income generated by a nation's domestic production

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Because every transaction has a buyer and a seller,

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Real GDP is the yearly production of final goods and services valued at

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Real GDP is a better gauge of economic well-being than is nominal GDP.

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A consumer buys toys made in China.The value of the toys is included only in the net exports component of GDP.

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Consumption consists of spending by households on goods and services,with the exception of

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An identity is an equation that

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The percentage change in the price level from one period to another is called

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The investment component of GDP refers to financial investment in stocks and bonds.

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When economists talk about growth in the economy,they measure that growth as the

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The GDP deflator can be used to take inflation out of nominal GDP.

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Table 15-4 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 2008. Prices and Quantities -Refer to Table 15-4.This country's inflation rate from 2010 to 2011 was

Correct AnswerverifiedShow Answer

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