Question 1

Changes in real GDP reflect

Accepted Answer

A)  only changes in prices.
B)  only changes in the amounts being produced.
C)  both changes in prices and changes in the amounts being produced.
D)  neither changes in prices nor changes in the amounts being produced.E) None of the above
F) All of the above

Question 2

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Accepted Answer

A) True 
 B)False

Question 3

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Accepted Answer

A)  would be included in GDP because they are part of government purchases.
B)  would be included in GDP because they are part of investment expenditures.
C)  would not be included in GDP because they are transfer payments.
D)  would not be included in GDP because the government raises taxes to pay for them.E) C) and D)
F) None of the above

Question 4

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Accepted Answer

A) True 
 B)False

Question 5

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Accepted Answer

A) True 
 B)False

Question 6

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) A) and B)
F) All of the above

Question 7

Alexandria, a British citizen, owns and manages a fish and chips shop in Washington, D.C.
She buys fresh food produced by U.S. workers, pays utilities to a U.S. company, and employs only U.S. citizens. What part, if any, of the restaurant's production is included in U.S. GDP? What part, if any, of the restaurant's production is included in U.S. GNP?

Accepted Answer

All of the output is included ...

Question 8

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Accepted Answer

A)  values of goods and services based on surveys of consumers.
B)  market prices.
C)  quantities purchased by a typical urban household.
D)  profits from producing goods and services.E) C) and D)
F) A) and B)

Question 9

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following correctly orders U.S. income measures from largest to smallest?

Accepted Answer

A)  Disposable personal income, gross national product, national income, net national product, personal income
B)  Personal income, net national product, national income, gross national product, disposable personal income
C)  Gross national product, net national product, national income, personal income, disposable personal income
D)  Disposable personal income, personal income, national income, net national product, gross national productE) A) and D)
F) B) and D)

Question 11

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Accepted Answer

A) True 
 B)False

Question 12

According to the circular-flow diagram, GDP can be computed as

Accepted Answer

A)  either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.
B)  the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.
C)  payments firms make to factors of production but not as revenues they receive from the sales of goods and services.
D)  neither the revenue firms receive nor the payments they make to factors of production.E) A) and D)
F) A) and C)

Question 13

Table 23-6
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 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Accepted Answer

Nominal GDP was $5x100 + $60x1...

Question 14

Write the formula for calculating a GDP deflator using only nominal and real GDP.

Accepted Answer

GDP deflat...

Question 15

GDP is a good measure of economic well-being for all purposes.

Accepted Answer

A) True 
 B)False

Question 16

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Accepted Answer

A) True 
 B)False

Question 17

You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully.

Accepted Answer

Real income is nominal income adjusted f...

Question 18

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) A) and B)
F) C) and D)

Question 19

Katherine, a French citizen, works only in the United States. The value of the output she produces is

Accepted Answer

A)  included in both U.S.GDP and U.S.GNP.
B)  included in U.S.GDP, but it is not included in U.S.GNP.
C)  included in U.S.GNP, but it is not included in U.S.GDP.
D)  included in neither U.S.GDP nor U.S.GNP.E) B) and C)
F) A) and D)

Question 20

The term economists use to describe a situation in which the economy's overall price level is rising is

Accepted Answer

A)  growth.
B)  inflation.
C)  recession.
D)  expansion.E) A) and B)
F) None of the above

Exam 23: Measuring a Nations Income

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

The term economists use to describe a situation in which the economy's overall price level is rising is

Correct Answer
verified

Changes in real GDP reflect

Correct Answer
verified

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct Answer
verified

Katherine, a French citizen, works only in the United States. The value of the output she produces is

Correct Answer
verified

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Correct Answer
verified

Write the formula for calculating a GDP deflator using only nominal and real GDP.

Correct Answer
verified
GDP deflat...
View Answer

You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully.

Correct Answer
verified
Real income is nominal income adjusted f...
View Answer

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct Answer
verified

Table 23-6 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 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Correct Answer
verified
Nominal GDP was $5x100 + $60x1...
View Answer

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Correct Answer
verified

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct Answer
verified

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
All of the output is included ...
View Answer

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Correct Answer
verified

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Correct Answer
verified

GDP is a good measure of economic well-being for all purposes.

Correct Answer
verified

Which of the following correctly orders U.S. income measures from largest to smallest?

Correct Answer
verified

According to the circular-flow diagram, GDP can be computed as

Correct Answer
verified

Exam 23: Measuring a Nations Income

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

The term economists use to describe a situation in which the economy's overall price level is rising is

Correct AnswerverifiedShow Answer

Changes in real GDP reflect

Correct AnswerverifiedShow Answer

An increase in nominal U.S. GDP necessarily implies that the United States is producing a larger output of goods and services.

Correct AnswerverifiedShow Answer

Katherine, a French citizen, works only in the United States. The value of the output she produces is

Correct AnswerverifiedShow Answer

At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP.

Correct AnswerverifiedShow Answer

Write the formula for calculating a GDP deflator using only nominal and real GDP.

Correct AnswerverifiedGDP deflat...View AnswerShow Answer

You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully.

Correct AnswerverifiedReal income is nominal income adjusted f...View AnswerShow Answer

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct AnswerverifiedShow Answer

Table 23-6 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 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Correct AnswerverifiedNominal GDP was $5x100 + $60x1...View AnswerShow Answer

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

Correct AnswerverifiedShow Answer

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct AnswerverifiedShow Answer

To encourage formation of small businesses, the government could provide subsidies; these subsidies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAll of the output is included ...View AnswerShow Answer

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Correct AnswerverifiedShow Answer

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Correct AnswerverifiedShow Answer

GDP is a good measure of economic well-being for all purposes.

Correct AnswerverifiedShow Answer

Which of the following correctly orders U.S. income measures from largest to smallest?

Correct AnswerverifiedShow Answer

According to the circular-flow diagram, GDP can be computed as

Correct AnswerverifiedShow Answer

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GDP deflat...
View Answer

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Real income is nominal income adjusted f...
View Answer

Correct Answer
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Correct Answer
verified
Nominal GDP was $5x100 + $60x1...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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All of the output is included ...
View Answer

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