Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

Table 10-5
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 10-5 What was this country's nominal GDP in 2009?

Accepted Answer

A)   $7,600
B)   $9,100
C)   $9,500
D)   $10,500E) B) and D)
F) None of the above

Question 4

Social Security payments are

Accepted Answer

A)   included in GDP because they represent current income.
B)   included in GDP because they represent potential consumption.
C)   excluded from GDP because they are not private pensions.
D)   excluded from GDP because they do not reflect the economy's production.E) None of the above
F) B) and C)

Question 5

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   spending on new business equipment such as power tools and spending on stocks and bonds
B)   spending on new business equipment such as power tools but not spending on stocks and bonds
C)   spending on stocks and bonds but not spending on new business equipment such as power tools
D)   neither spending on new business equipment such as power tools nor spending on stocks and bondsE) A) and C)
F) A) and B)

Question 6

Table 10-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 10-1.What were country A's imports in 2010?

Accepted Answer

A)   -$32
B)   $32
C)   $88
D)   $120E) B) and C)
F) All of the above

Question 7

If exports are $500,GDP is $8000,government purchases are $1200,imports are $700,and investment is $800,then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 8

Table 10-1
The table below contains data for country A for the year 2010.
 
-Refer to Table 10-1.What was country A's GDP in 2010?

Accepted Answer

A)   $6359
B)   $7136
C)   $7253
D)   $8147E) A) and B)
F) A) and C)

Question 9

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

If an economy's GDP falls,then it must be the case that the economy's

Accepted Answer

A)   income falls and saving rises.
B)   income and saving both fall.
C)   income falls and expenditure rises.
D)   income and expenditure both fall.E) B) and D)
F) A) and D)

Question 12

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   spending to build new houses
B)   spending to build new factories
C)   spending on business equipment such as welding equipment
D)   All of the above are included in the investment component of GDP.E) A) and B)
F) A) and C)

Question 13

In the economy of Ukzten in 2010,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Ukzten's GDP in 2010?

Accepted Answer

A)   $6700
B)   $6800
C)   $7000
D)   $7200E) A) and B)
F) A) and C)

Question 14

Table 10-5
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 10-5 What was this country's GDP deflator in 2010?

Accepted Answer

A)   86.9
B)   115.1
C)   120.5
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 15

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009.It also reported a GDP deflator of 85 in 2010 and 100 in 2009.Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.E) A) and B)
F) All of the above

Question 16

The information below for 2008 in millions was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest? Country
GDP (Constant US$) 
GDP(Current US$) 
Population
Ghana
7,690
16,653
23) 35
Kenya
17,569
30,354
38) 76
Tanzania
15,394
20,490
41) 276

Accepted Answer

A)   Ghana,Kenya,Tanzania
B)   Ghana,Tanzania,Kenya
C)   Kenya,Tanzania,Ghana
D)   Kenya,Ghana,TanzaniaE) A) and B)
F) A) and C)

Question 17

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 machinesE) A) and B)
F) B) and C)

Question 18

Which of the following statements about nominal GDP and real GDP is correct?

Accepted Answer

A)   Nominal GDP is a better gauge of economic well-being than real GDP.
B)   Real GDP is a better gauge of economic well-being than nominal GDP.
C)   Real GDP and nominal GDP are equally good measures of economic well-being.
D)   Neither nominal nor real GDP provide a measure of economic well-being.E) A) and B)
F) B) and D)

Question 19

In 2009,U.S.net exports were

Accepted Answer

A)   positive and about 3 percent the size of GDP.
B)   positive and about 6 percent the size of GDP.
C)   negative and about 3 percent the size of GDP.
D)   negative and about 6 percent the size of GDP.E) A) and B)
F) A) and C)

Question 20

Table 10-4
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 10-4.This country's output grew

Accepted Answer

A)   29.9% from 2008 to 2009.
B)   33.3% from 2009 to 2010.
C)   24.3% from 2009 to 2010.
D)   15.4% from 2010 to 2011.E) None of the above
F) All of the above

Exam 23: Measuring a Nations Income

Which of the following is included in the investment component of GDP?

Correct Answer
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Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What were country A's imports in 2010?

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

Correct Answer
verified

Social Security payments are

Correct Answer
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In 2009,U.S.net exports were

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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A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009.It also reported a GDP deflator of 85 in 2010 and 100 in 2009.Between 2009 and 2010,

Correct Answer
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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?

Correct Answer
verified

Table 10-4 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 10-4.This country's output grew

Correct Answer
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Correct Answer
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If an economy's GDP falls,then it must be the case that the economy's

Correct Answer
verified

Table 10-5 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 10-5 What was this country's nominal GDP in 2009?

Correct Answer
verified

Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What was country A's GDP in 2010?

Correct Answer
verified

If exports are $500,GDP is $8000,government purchases are $1200,imports are $700,and investment is $800,then consumption is $6200.

Correct Answer
verified

In the economy of Ukzten in 2010,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Ukzten's GDP in 2010?

Correct Answer
verified

Table 10-5 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 10-5 What was this country's GDP deflator in 2010?

Correct Answer
verified

Which of the following statements about nominal GDP and real GDP is correct?

Correct Answer
verified

Which of the following is included in the investment component of GDP?

Correct Answer
verified

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

Correct Answer
verified

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Correct Answer
verified

Exam 23: Measuring a Nations Income

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What were country A's imports in 2010?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Social Security payments are

Correct AnswerverifiedShow Answer

In 2009,U.S.net exports were

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

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009.It also reported a GDP deflator of 85 in 2010 and 100 in 2009.Between 2009 and 2010,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 10-4 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 10-4.This country's output grew

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an economy's GDP falls,then it must be the case that the economy's

Correct AnswerverifiedShow Answer

Table 10-5 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 10-5 What was this country's nominal GDP in 2009?

Correct AnswerverifiedShow Answer

Table 10-1 The table below contains data for country A for the year 2010. -Refer to Table 10-1.What was country A's GDP in 2010?

Correct AnswerverifiedShow Answer

If exports are $500,GDP is $8000,government purchases are $1200,imports are $700,and investment is $800,then consumption is $6200.

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010,consumption was $5000,exports were $100,government purchases were $900,imports were $200,and investment was $1000.What was Ukzten's GDP in 2010?

Correct AnswerverifiedShow Answer

Table 10-5 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 10-5 What was this country's GDP deflator in 2010?

Correct AnswerverifiedShow Answer

Which of the following statements about nominal GDP and real GDP is correct?

Correct AnswerverifiedShow Answer

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Correct AnswerverifiedShow Answer

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