Question 1

Government spending ________ is included in gross domestic product.

Accepted Answer

A)   at federal, state, and local levels of government
B)   at the federal level of government only
C)   at state and local levels of government only
D)   on defense goods onlyE) B) and D)
F) A) and D)

Question 2

The purchase by a household in China of a CD produced in the United States is included in U.S.

Accepted Answer

A)   consumption expenditures.
B)   investment expenditures.
C)   government purchases.
D)   net exports.E) A) and B)
F) All of the above

Question 3

Table 19-5
  Consider the table above showing three stages of production of an automobile.
-Refer to Table 19-5. The value of each automobile in gross domestic product equals

Accepted Answer

A)   $7,000.
B)   $15,000.
C)   $18,000.
D)   $25,000.E) A) and D)
F) None of the above

Question 4

If a country passes a labor law limiting the number of hours of work per week, GDP would ________ and leisure would ________.

Accepted Answer

A)   decrease; increase
B)   increase; increase
C)   decrease; decrease
D)   increase; decreaseE) None of the above
F) A) and D)

Question 5

Scenario 19-1
CANOES-R-US makes canoes. It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe. It sells the finished canoe to a retail canoe store for $800. The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 19-1. The value of each canoe in gross domestic product equals

Accepted Answer

A)   $1,200.
B)   $800.
C)   $500.
D)   $400.E) A) and D)
F) None of the above

Question 6

Table 19-26
 
-Gross national product, GNP, of the United States is the market value of all final goods and services

Accepted Answer

A)   produced within the United States.
B)   consumed within the United States.
C)   produced by citizens of the United States anywhere in the world.
D)   consumed by citizens of the United States anywhere in the world.E) All of the above
F) A) and B)

Question 7

Which of the following equations correctly measures GDP in an economy?

Accepted Answer

A)   GDP = C + I + G + X
B)   GDP = C + net I + G + NX
C)   GDP = C + I + G + NX
D)   GDP = C + G + I - taxesE) C) and D)
F) A) and B)

Question 8

Disposable personal income is defined as

Accepted Answer

A)   personal income less personal taxes plus indirect sales taxes.
B)   personal income less transfer payments plus personal taxes.
C)   personal income less personal taxes.
D)   personal income less depreciation.E) A) and D)
F) C) and D)

Question 9

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being. Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi...

Question 10

In 2013, Ford Motor Company's sales were rising. These events were caused by

Accepted Answer

A)   an economic recession.
B)   an economic expansion.
C)   an increase in advertising.
D)   improving quality of service.E) A) and B)
F) B) and C)

Question 11

Which of the following could cause nominal GDP to decrease, but real GDP to increase?

Accepted Answer

A)   The price level rises and the quantity of final goods and services produced rises.
B)   The price level falls and the quantity of final goods and services produced rises.
C)   The price level rises and the quantity of final goods and services produced falls.
D)   The price level falls and the quantity of final goods and services produced falls.E) A) and B)
F) A) and C)

Question 12

Which of the following is not an example of a transfer payment?

Accepted Answer

A)   unemployment insurance payments
B)   health insurance payments to an army private
C)   social security payments to retirees
D)   social security payments to disabled personsE) A) and B)
F) All of the above

Question 13

The GDP deflator is the

Accepted Answer

A)   difference between real GDP and nominal GDP multiplied by 100.
B)   difference between nominal GDP and real GDP divided by 100.
C)   ratio of real GDP to nominal GDP multiplied by 100.
D)   ratio of nominal GDP to real GDP multiplied by 100.E) All of the above
F) B) and D)

Question 14

Under what circumstances would the GDP deflator be less than 100 after the base year?

Accepted Answer

A)   The GDP deflator will be less than 100 if there has been inflation relative to the base year.
B)   The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year.
C)   The GDP deflator will be less than 100 if there has been deflation relative to the base year.
D)   There are no circumstances under which the GDP deflator could be less than 100.E) All of the above
F) A) and D)

Question 15

For developed countries like the United States, GDP will always exceed GNP.

Accepted Answer

A) True 
 B)False

Question 16

In 2013, Kendall Ford, an automobile dealership, spent $20,000 on a new car lift for its repair shop, $2,000 on a new copy machine for its sales division, and $600,000 on Ford Motor company stock. Unsold cars and trucks were valued at $400,000 on January 1, 2013 and unsold cars and trucks were valued at $900,000 on December 31, 2013. What is Kendall Ford's total investment spending in 2013?

Accepted Answer

A)   $22,000
B)   $322,000
C)   $522,000
D)   $1,022,000E) A) and D)
F) C) and D)

Question 17

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true?

Accepted Answer

A)   A decrease in the crime rate increases GDP as people will spend more on security.
B)   Household production is counted in GDP as it amounts to real production.
C)   GDP accounting rules do not adjust for production that pollutes the economy.
D)   GDP growth distributes income equally to people in the economy.E) A) and C)
F) None of the above

Question 19

Nominal GDP is GDP in a given year

Accepted Answer

A)   adjusted for inflation.
B)   adjusted for anticipated inflation.
C)   valued in the prices of that year.
D)   valued in the prices of the base year.E) All of the above
F) A) and B)

Question 20

Which of the following would be directly counted in GDP in 2014?

Accepted Answer

A)   kitchen cabinets purchased from Home Depot in 2014 to be installed in a house built in 1997
B)   kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home
C)   kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950
D)   none of the aboveE) B) and D)
F) B) and C)

Exam 19: GDP: Measuring Total Production and Income

The purchase by a household in China of a CD produced in the United States is included in U.S.

Correct Answer
verified

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.

Correct Answer
verified

Correct Answer
verified

Nominal GDP is GDP in a given year

Correct Answer
verified

Correct Answer
verified

For developed countries like the United States, GDP will always exceed GNP.

Correct Answer
verified

Which of the following could cause nominal GDP to decrease, but real GDP to increase?

Correct Answer
verified

The GDP deflator is the

Correct Answer
verified

Under what circumstances would the GDP deflator be less than 100 after the base year?

Correct Answer
verified

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being. Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Correct Answer
verified
Factors not included in GDP which you mi...
View Answer

Government spending ________ is included in gross domestic product.

Correct Answer
verified

In 2013, Ford Motor Company's sales were rising. These events were caused by

Correct Answer
verified

Which of the following equations correctly measures GDP in an economy?

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Which of the following is not an example of a transfer payment?

Correct Answer
verified

Table 19-26 -Gross national product, GNP, of the United States is the market value of all final goods and services

Correct Answer
verified

Which of the following would be directly counted in GDP in 2014?

Correct Answer
verified

If a country passes a labor law limiting the number of hours of work per week, GDP would and leisure would .

Correct Answer
verified

Disposable personal income is defined as

Correct Answer
verified

Table 19-5 Consider the table above showing three stages of production of an automobile. -Refer to Table 19-5. The value of each automobile in gross domestic product equals

Correct Answer
verified

Exam 19: GDP: Measuring Total Production and Income

The purchase by a household in China of a CD produced in the United States is included in U.S.

Correct AnswerverifiedShow Answer

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Nominal GDP is GDP in a given year

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For developed countries like the United States, GDP will always exceed GNP.

Correct AnswerverifiedShow Answer

Which of the following could cause nominal GDP to decrease, but real GDP to increase?

Correct AnswerverifiedShow Answer

The GDP deflator is the

Correct AnswerverifiedShow Answer

Under what circumstances would the GDP deflator be less than 100 after the base year?

Correct AnswerverifiedShow Answer

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being. Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Correct AnswerverifiedFactors not included in GDP which you mi...View AnswerShow Answer

Government spending ________ is included in gross domestic product.

Correct AnswerverifiedShow Answer

In 2013, Ford Motor Company's sales were rising. These events were caused by

Correct AnswerverifiedShow Answer

Which of the following equations correctly measures GDP in an economy?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a transfer payment?

Correct AnswerverifiedShow Answer

Table 19-26 -Gross national product, GNP, of the United States is the market value of all final goods and services

Correct AnswerverifiedShow Answer

Which of the following would be directly counted in GDP in 2014?

Correct AnswerverifiedShow Answer

If a country passes a labor law limiting the number of hours of work per week, GDP would ________ and leisure would ________.

Correct AnswerverifiedShow Answer

Disposable personal income is defined as

Correct AnswerverifiedShow Answer

Table 19-5 Consider the table above showing three stages of production of an automobile. -Refer to Table 19-5. The value of each automobile in gross domestic product equals

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Factors not included in GDP which you mi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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If a country passes a labor law limiting the number of hours of work per week, GDP would and leisure would .

Correct Answer
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Correct Answer
verified

Correct Answer
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