Question 1

Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Accepted Answer

A)   Ireland's net factor payments from abroad are positive, and its GDP is larger than its GNP.
B)   Ireland's net factor payments from abroad are positive, and its GNP is larger than its GDP.
C)   Ireland's net factor payments from abroad are negative, and its GDP is larger than its GNP.
D)   Ireland's net factor payments from abroad are negative, and its GNP is larger than its GDP.

Question 2

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

Accepted Answer

A)   $0
B)   $10,000
C)   $12,000
D)   $22,000

Question 3

Which of the following always uses prices and quantities from the same period?

Accepted Answer

A)   both nominal and real GDP
B)   nominal GDP but not real GDP
C)   real GDP but not nominal GDP
D)   neither nominal or real GDP

Question 4

Table 5-5
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009.
Prices and Quantities
 
-Refer to Table 5-5 In which year was this country's real GDP highest?

Accepted Answer

A)   2008
B)   2009
C)   2010
D)   2011

Question 5

Household spending on education is included in

Accepted Answer

A)   consumption, although it might be argued that it would fit better in investment.
B)   investment, although it might be argued that it would fit better in consumption.
C)   government spending, based on the fact that most higher-education students attend publicly-supported colleges and universities.
D)   None of the above is correct; in general, household spending on services is not included in any component of GDP.

Question 6

Gross domestic product measures

Accepted Answer

A)   income and expenditures.
B)   income but not expenditures.
C)   expenditures but not income.
D)   neither income nor expenditures.

Question 7

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 8

Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Accepted Answer

A)   Country A because it had the higher nominal GDP per person.
B)   Country B because it had the higher nominal GDP per person.
C)   Country A because it had the higher real GDP per person.
D)   Country B because it had the higher real GDP per person.

Question 9

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Accepted Answer

A)   spending on education
B)   the purchase of stocks and bonds
C)   the purchase of a new house
D)   the purchase of durable goods such as stoves and washing machines

Question 10

JR sells RV's. In 2010 she added $400,000 to her inventory. $100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's. How much of JR's inventory is included in 2010 GDP?

Accepted Answer

A)   $0
B)   $100,000
C)   $300,000
D)   $400,000

Question 11

Which of the following items is included in U.S. GDP?

Accepted Answer

A)   goods produced by foreign citizens working in the United States
B)   the difference in the price of the sale of an existing home and its original purchase price
C)   known illegal activities
D)   None of the above is included in U.S. GDP.

Question 12

Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?

Accepted Answer

A)   Unemployment rate rises from 5 percent to 5.5 percent.
B)   Real GDP grows by 3.1 percent in the third quarter.
C)   Retail sales at stores show large gains.
D)   The price of oranges rises after an early frost.

Question 13

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

Accepted Answer

A)   not included in GDP since they do not represent production.
B)   not included in GDP since the government collects taxes to pay for them.
C)   included in GDP since government expenditures on goods and services are included in GDP.
D)   included in GDP only to the extent that the federal government, rather than state or local governments, paid for them.

Question 14

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2010 Quality Motors produced $30 million worth of automobiles, with $17 million in sales to Americans, $9 million in sales to Canadians, and $4 million worth of automobiles added to Quality Motors' inventory. The transactions just described contribute how much to U.S. GDP for 2010?

Accepted Answer

A)   $17 million
B)   $21 million
C)   $26 million
D)   $30 million

Question 15

Table 5-4
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 5-4. In 2009, this country's

Accepted Answer

A)   real GDP was $660, and the GDP deflator was 113.4
B)   real GDP was $670, and the GDP deflator was 115.2
C)   real GDP was $660, and the GDP deflator was 115.2.
D)   real GDP was $670, and the GDP deflator was 113.4.

Question 16

Table 5-4
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 5-4. In 2011, this country's

Accepted Answer

A)   real GDP was $900, and the GDP deflator was 150.2.
B)   real GDP was $900, and the GDP deflator was 177.8.
C)   real GDP was $1065, and the GDP deflator was 177.8.
D)   real GDP was $1065, and the GDP deflator was 150.2.

Question 17

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Accepted Answer

A) True 
 B)False

Question 18

Net exports equal

Accepted Answer

A)   exports plus imports.
B)   exports minus imports.
C)   imports minus exports.
D)   GDP minus imports.

Question 19

Table 5-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.
Prices and Quantities
 
-Refer to Table 5-6. In 2009, this country's nominal GDP was

Accepted Answer

A)   $300.
B)   $390.
C)   $400.
D)   $540.

Question 20

Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

Accepted Answer

A)   $1
B)   $19
C)   $20
D)   $21

Exam 5: Measuring a Nations Income

Table 5-4 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 5-4. In 2009, this country's

Correct Answer
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Which of the following items is included in U.S. GDP?

Correct Answer
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Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Correct Answer
verified

Table 5-4 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 5-4. In 2011, this country's

Correct Answer
verified

Household spending on education is included in

Correct Answer
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Net exports equal

Correct Answer
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Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

Correct Answer
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Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Correct Answer
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Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Correct Answer
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Which of the following always uses prices and quantities from the same period?

Correct Answer
verified

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

Correct Answer
verified

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. In 2009, this country's nominal GDP was

Correct Answer
verified

Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?

Correct Answer
verified

Table 5-5 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009. Prices and Quantities -Refer to Table 5-5 In which year was this country's real GDP highest?

Correct Answer
verified

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

Correct Answer
verified

JR sells RV's. In 2010 she added $400,000 to her inventory. $100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's. How much of JR's inventory is included in 2010 GDP?

Correct Answer
verified

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Correct Answer
verified

Gross domestic product measures

Correct Answer
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Correct Answer
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James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

Correct Answer
verified

Exam 5: Measuring a Nations Income

Table 5-4 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 5-4. In 2009, this country's

Correct AnswerverifiedShow Answer

Which of the following items is included in U.S. GDP?

Correct AnswerverifiedShow Answer

Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?

Correct AnswerverifiedShow Answer

Table 5-4 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 5-4. In 2011, this country's

Correct AnswerverifiedShow Answer

Household spending on education is included in

Correct AnswerverifiedShow Answer

Net exports equal

Correct AnswerverifiedShow Answer

Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

Correct AnswerverifiedShow Answer

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Correct AnswerverifiedShow Answer

Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Correct AnswerverifiedShow Answer

Which of the following always uses prices and quantities from the same period?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. In 2009, this country's nominal GDP was

Correct AnswerverifiedShow Answer

Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?

Correct AnswerverifiedShow Answer

Table 5-5 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009. Prices and Quantities -Refer to Table 5-5 In which year was this country's real GDP highest?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

JR sells RV's. In 2010 she added $400,000 to her inventory. $100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's. How much of JR's inventory is included in 2010 GDP?

Correct AnswerverifiedShow Answer

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.

Correct AnswerverifiedShow Answer

Gross domestic product measures

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

Correct AnswerverifiedShow Answer

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