Question 1

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Accepted Answer

A)   nominal GDP is $400, real GDP is $500, and the GDP deflator is 80.
B)   nominal GDP is $400, real GDP is $500, and the GDP deflator is 125.
C)   nominal GDP is $500, real GDP is $400, and the GDP deflator is 80.
D)   nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.E) C) and D)
F) A) and B)

Question 2

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Accepted Answer

A)   exactly one-third as much to GDP as does a dress.
B)   more than one-third as much to GDP as does a dress.
C)   less than one-third as much to GDP as does a dress.
D)   exactly one-fourth as much to GDP as does a dress.E) B) and C)
F) B) and D)

Question 3

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1...

Question 4

For the purpose of calculating GDP, investment is spending on

Accepted Answer

A)   stocks, bonds, and other financial assets.
B)   real estate and financial assets such as stocks and bonds.
C)   capital equipment, inventories, and structures, including household purchases of new housing.
D)   capital equipment, inventories, and structures, excluding household purchases of new housing.E) C) and D)
F) B) and D)

Question 5

Which of the following represents a transfer payment?

Accepted Answer

A)   You transfer $1,000 from your bank account to a mutual fund.
B)   The government sends your grandfather his Social Security check.
C)   You make a payment to get legal documents showing you purchased a previously owned home.
D)   Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.E) A) and B)
F) C) and D)

Question 6

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) All of the above
F) C) and D)

Question 7

Recently, the U.S. national income accounts have switched to calling government purchases

Accepted Answer

A)   government spending and transfer payments.
B)   transfer payments and gross investment by government.
C)   government consumption expenditure and gross investment.
D)   government wages, salaries, and investment expenditure.E) A) and B)
F) A) and C)

Question 8

Table 23-1
The table below contains data for Chereaux for the year 2015.
 
-Refer to Table 23-1. Gross national product for Chereaux in 2015 is

Accepted Answer

A)   $186.
B)   $214.
C)   $200.
D)   $204.E) All of the above
F) A) and B)

Question 9

Consider two items that might be included in GDP: 1)  the estimated rental value of owner-occupied housing and 2)  purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

Accepted Answer

A)   Both item 1)  and item 2)  are included in the consumption component of GDP.
B)   Item 1)  is included in the consumption component of GDP, while item 2)  is included in the investment component of GDP.
C)   Item 1)  is included in the investment component of GDP, while item 2)  is included in the consumption component of GDP.
D)   Only item 2)  is included in GDP, and it is included in the investment component.E) A) and B)
F) B) and C)

Question 10

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

Question 11

When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

Accepted Answer

A) True 
 B)False

Question 12

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Accepted Answer

A)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83.
B)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16.
C)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16.
D)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.E) None of the above
F) A) and C)

Question 13

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 investment in 2010?

Accepted Answer

A)   $675
B)   $1090
C)   $1491
D)   $1793E) All of the above
F) C) and D)

Question 14

The inflation rate is the

Accepted Answer

A)   absolute change in real GDP from one period to another.
B)   percentage change in real GDP from one period to another.
C)   absolute change in the price level from one period to another.
D)   percentage change in the price level from one period to another.E) All of the above
F) A) and C)

Question 15

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 2013, this country's real GDP was

Accepted Answer

A)   $500.
B)   $700.
C)   $900.
D)   $1200.E) None of the above
F) A) and D)

Question 16

In the actual economy, households

Accepted Answer

A)   spend all of their income.
B)   divide their income among spending, taxes, and saving.
C)   buy all goods and services produced in the economy.
D)   Both a)  and c)  are correct.E) A) and B)
F) All of the above

Question 17

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 18

GDP includes the value of all

Accepted Answer

A)   final goods and services produced within a country using primarily market prices to measure the value of goods and services.
B)   final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.
C)   goods and services produced within a country using primarily market prices to measure the value of goods and services.
D)   goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.E) None of the above
F) B) and D)

Question 19

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974.
 
-Refer to Table 23-7. Which of the following is not correct?

Accepted Answer

A)   This economy experienced growth from 1974 to 1975.
B)   This economy experienced growth from 1975 to 1976.
C)   This economy experienced growth from 1976 to 1977.
D)   This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977.E) C) and D)
F) None of the above

Question 20

Figure 23-2. 
-Refer to Figure 23-2. Identify the location of firms and households.

Accepted Answer

W is firms...

Exam 5: Measuring a Nations Income

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. Which of the following is not correct?

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Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

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Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Gross national product for Chereaux in 2015 is

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When an American doctor opens a practice in Bermuda, his production there is part of U.S. GNP.

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GDP includes the value of all

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

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Which of the following represents a transfer payment?

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Recently, the U.S. national income accounts have switched to calling government purchases

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Consider two items that might be included in GDP: 1) the estimated rental value of owner-occupied housing and 2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

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In the actual economy, households

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Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Correct AnswerverifiedThe GDP Deflator = 1...View AnswerShow Answer

The inflation rate is the

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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 2013, this country's real GDP was

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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 investment in 2010?

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Figure 23-2. -Refer to Figure 23-2. Identify the location of firms and households.

Correct AnswerverifiedW is firms...View AnswerShow Answer

For the purpose of calculating GDP, investment is spending on

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Periods during which real GDP rises are called recessions.

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Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Correct AnswerverifiedShow Answer

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

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

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The GDP Deflator = 1...
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W is firms...
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