Question 1

Exhibit 7-3
 
-Refer to Exhibit 7-3.Investment is equal to

Accepted Answer

A)   $850.
B)   $1,250.
C)   $200.
D)   $2,200.
E)   $1,050.F) A) and E)
G) None of the above

Question 2

Compensation of employees is the largest spending component of GDP.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A)   a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car
B)   a headlight bulb purchased by Ford Motor Co.from a supplier
C)   a headlight bulb produced but not sold this year and thus ending up as inventory
D)   none of the above,i.e. ,all would be includedE) B) and C)
F) A) and D)

Question 4

The expenditure approach to measuring GDP sums

Accepted Answer

A)   consumption,investment,government purchases,and net exports.
B)   sales,revenues,income,and wages.
C)   profits,compensation of employees,consumption,and investment.
D)   net exports,consumption,wages,and salaries.
E)   consumption,interest,net exports,and federal government purchasesF) A) and B)
G) C) and D)

Question 5

Suppose that nondurable goods spending is $200 billion,durable goods spending is $400 billion,new residential housing spending is $500 billion,and spending on services is $700 billion.What does consumption equal?

Accepted Answer

A)   $600 billion
B)   $1,100 billion
C)   $1,800 billion
D)   $1,300 billion
E)   There is not enough information to answer this question.F) B) and E)
G) A) and D)

Question 6

Which of the following statements is true?

Accepted Answer

A)   Government purchases is the largest component of GDP.
B)   Net exports are equal to exports plus imports.
C)   U.S.imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States.
D)   Government purchases includes the spending on goods and services by all levels of government (federal,state,and local) .
E)   c and dF) A) and C)
G) B) and D)

Question 7

The best reason economists take only final goods and services into account when calculating GDP is that

Accepted Answer

A)   this is the way things have always been done.
B)   they want to avoid the problem of final counting.
C)   they want to avoid the problem of double counting.
D)   this is the only way things can be done.E) A) and C)
F) All of the above

Question 8

Exhibit 7-1
 
-Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

Accepted Answer

A)   $4,150 + $751 + $850 + $300
B)   $4,150 + $751 + $850 - $331 + $300
C)   $4,150 + $751 + $850 + $331 + $300
D)   $4,150 + $751 + $850 + $331 + $300 - $320
E)   $4,150 + $751 + $850 + $331 + $300 - $320 + $111F) A) and E)
G) A) and B)

Question 9

If a person receives a (stock) dividend check,in the calculation of national income this is part of

Accepted Answer

A)   compensation of employees.
B)   proprietors' income.
C)   rental income.
D)   net interest.
E)   corporate profits.F) All of the above
G) C) and E)

Question 10

Real GDP is always measured in

Accepted Answer

A)   cheaper dollars.
B)   quality of goods produced.
C)   base-year dollars.
D)   nominal dollars.
E)   current dollars.F) A) and E)
G) None of the above

Question 11

Government purchases consist of the total dollar amount(s) spent on goods and services by the

Accepted Answer

A)   federal government only.
B)   state governments only.
C)   local governments only.
D)   state and local governments.
E)   federal,state,and local governments.F) B) and C)
G) C) and E)

Question 12

Exhibit 7-1
 
-Refer to Exhibit 7-1.What is the value of national income?

Accepted Answer

A)   $4,351
B)   $4,252
C)   $4,403
D)   $2,996
E)   $4,542F) None of the above
G) A) and D)

Question 13

Which of the following is a nonmarket good?

Accepted Answer

A)   the corn you grow in your home garden and consume
B)   the clothes you sew and sell to a neighbor who pays you by writing you a check
C)   the self-portrait hanging in your den
D)   a and c
E)   a,b,and cF) A) and D)
G) B) and D)

Question 14

Exhibit 7-1
 
-Refer to Exhibit 7-1.What is the value of disposable income?

Accepted Answer

A)   $3,618
B)   $4,795
C)   $3,727
D)   $4,207
E)   $4,017F) A) and B)
G) D) and E)

Question 15

Suppose that net exports are -$300 billion and exports are $500 billion.Imports equals

Accepted Answer

A)   $800 billion.
B)   $400 billion.
C)   $200 billion.
D)   -$200 billion.
E)   There is not enough information to answer this question.F) D) and E)
G) A) and B)

Question 16

Countries with a large GDP must also have a large per-capita GDP.

Accepted Answer

A) True 
 B)False

Question 17

Gross Domestic Product (GDP) is the total market value of all

Accepted Answer

A)   final goods and services produced annually within a country's borders.
B)   final and intermediate goods and services produced annually within a country's borders.
C)   intermediate goods and services produced annually within a country's borders.
D)   final goods and services produced every month within a country's borders.E) None of the above
F) B) and D)

Question 18

The standard definition of "recession" is

Accepted Answer

A)   a period of a positive frictional unemployment rate.
B)   two consecutive quarters of falling Real GDP.
C)   the lowest point in a business cycle.
D)   a period of negative inflation.E) A) and B)
F) A) and C)

Question 19

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

Accepted Answer

A)   Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher.
B)   Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher.
C)   Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures.
D)   Because Real GDP is easier to compute than GDP.
E)   Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher.F) C) and D)
G) B) and D)

Question 20

Exhibit 7-3
 
-Refer to Exhibit 7-3.Consumption is equal to

Accepted Answer

A)   $3,700.
B)   $9,000.
C)   $10,150.
D)   $8,200.
E)   $9,700.F) B) and D)
G) C) and D)

Exam 7: Macroeconomic Measurements, Gdp and Real Gdp

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of national income?

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Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of disposable income?

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Compensation of employees is the largest spending component of GDP.

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Suppose that net exports are -$300 billion and exports are $500 billion.Imports equals

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Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

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Exhibit 7-3 -Refer to Exhibit 7-3.Investment is equal to

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Which of the following statements is true?

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The standard definition of "recession" is

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The best reason economists take only final goods and services into account when calculating GDP is that

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Gross Domestic Product (GDP) is the total market value of all

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Which of the following is a nonmarket good?

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The expenditure approach to measuring GDP sums

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Real GDP is always measured in

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Exhibit 7-3 -Refer to Exhibit 7-3.Consumption is equal to

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Suppose that nondurable goods spending is $200 billion,durable goods spending is $400 billion,new residential housing spending is $500 billion,and spending on services is $700 billion.What does consumption equal?

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Exhibit 7-1 -Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

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Which of the following would not be included in the calculation of this year's GDP?

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Countries with a large GDP must also have a large per-capita GDP.

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If a person receives a (stock) dividend check,in the calculation of national income this is part of

Correct AnswerverifiedShow Answer

Government purchases consist of the total dollar amount(s) spent on goods and services by the

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