Question 1

If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

Accepted Answer

A) True 
 B)False

Question 2

Table 19-18
  A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
-Refer to Table 19-18. What is nominal GDP in 2018 when 2013 is the base year?

Accepted Answer

A)   $28,885
B)   $11,790
C)   $11,200
D)   $10,275E) B) and C)
F) A) and C)

Question 3

An example of an intermediate good would be

Accepted Answer

A)   a new car.
B)   a used car.
C)   the rims on a new car.
D)   new rims to replace old rims on a used car.E) A) and B)
F) None of the above

Question 4

The largest component of spending in GDP is

Accepted Answer

A)   consumption spending.
B)   investment spending.
C)   government spending.
D)   net export spending.E) C) and D)
F) A) and B)

Question 5

To make the calculation of real GDP more accurate, in 1996 the BEA switched to using

Accepted Answer

A)   base-year prices.
B)   current prices.
C)   chain-weighted prices.
D)   market prices.E) B) and D)
F) B) and C)

Question 6

Which of the following would not be included in the expenditure category called investment expenditures?

Accepted Answer

A)   spending on new houses
B)   a purchase of shares of preferred stock
C)   a purchase of a copy machine by FedEx Office
D)   the cars held in inventory on a local Ford dealer's lotE) All of the above
F) B) and D)

Question 7

Table 19-6
 
-Refer to Table 19-6. Consider the table of production and price statistics for a small economy in 2018. If the economy only produces the four goods listed below, what is GDP for 2018?

Accepted Answer

A)   $428,000
B)   $267,000
C)   $24,000
D)   $1,424E) All of the above
F) None of the above

Question 8

Table 19-20
 
-Refer to Table 19-20. Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018, using 2016 as the base year. Show your work.

Accepted Answer

Nominal GDP for 2018 equals (2...

Question 9

Caroline is an artist. She purchases canvases, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, which, in turn, sells it to an art lover for $4,500. How much market value does the gallery add?

Accepted Answer

A)   $1,425
B)   $1,500
C)   $3,000
D)   $4,500E) A) and D)
F) None of the above

Question 10

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) None of the above
F) A) and B)

Question 11

In 2016, 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) All of the above
F) B) and C)

Question 12

Total income in an economy is equal to

Accepted Answer

A)   GDP minus net exports.
B)   income minus taxes.
C)   the sum of wages, interest, rent, and profit.
D)   firm revenues.E) A) and B)
F) B) and C)

Question 13

Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to homeowners. Which of the following would be counted in GDP?

Accepted Answer

A)   the sale of a used door to a homeowner
B)   the sale of a new door to homeowner
C)   the sale of a used door to TapKon construction for installation into a new home
D)   the sale of a new door to TapKon construction for installation into a new homeE) A) and B)
F) None of the above

Question 14

The factors of production include

Accepted Answer

A)   wages.
B)   capital.
C)   investment.
D)   transfers.E) B) and D)
F) A) and C)

Question 15

GDP is not a complete measure of well-being.

Accepted Answer

A) True 
 B)False

Question 16

Table 19-9
 
-Refer to Table 19-9. Suppose that the above table represents the goods and services produced in a very simple economy in 2018. Assume that steel is used as an input in the production of autos. Using that information, calculate GDP for the year 2018.

Accepted Answer

First, we must decide which goods to inc...

Question 17

Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP. Do you agree or disagree? Why?

Accepted Answer

Disagree. It depends on whether the year...

Question 18

To calculate GDP using the value-added method, one would add up

Accepted Answer

A)   the market value of final goods and services produced during a particular period.
B)   only the value added by the underground economy.
C)   the value added by each firm involved in the production of final goods and services.
D)   the market value of intermediate goods and services produced during a particular period.E) None of the above
F) All of the above

Question 19

Table 19-4
 
-Which of the following is not true about the composition of GDP in 2016?

Accepted Answer

A)   The majority of consumer spending is on durable goods.
B)   Purchases made by state and local governments are greater than purchases made by the federal government.
C)   Imports are greater than exports.
D)   Business fixed investment is the largest component of investment.E) B) and D)
F) B) and C)

Question 20

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) None of the above
F) All of the above

Exam 19: Gdp: Measuring Total Production and Income

Total income in an economy is equal to

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An example of an intermediate good would be

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In 2016, Ford Motor Company's sales were rising. These events were caused by

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Table 19-6 -Refer to Table 19-6. Consider the table of production and price statistics for a small economy in 2018. If the economy only produces the four goods listed below, what is GDP for 2018?

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If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

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Which of the following would not be included in the expenditure category called investment expenditures?

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To make the calculation of real GDP more accurate, in 1996 the BEA switched to using

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Table 19-9 -Refer to Table 19-9. Suppose that the above table represents the goods and services produced in a very simple economy in 2018. Assume that steel is used as an input in the production of autos. Using that information, calculate GDP for the year 2018.

Correct AnswerverifiedFirst, we must decide which goods to inc...View AnswerShow Answer

Table 19-18 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 19-18. What is nominal GDP in 2018 when 2013 is the base year?

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

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Table 19-20 -Refer to Table 19-20. Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018, using 2016 as the base year. Show your work.

Correct AnswerverifiedNominal GDP for 2018 equals (2...View AnswerShow Answer

Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP. Do you agree or disagree? Why?

Correct AnswerverifiedDisagree. It depends on whether the year...View AnswerShow Answer

The factors of production include

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

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Table 19-4 -Which of the following is not true about the composition of GDP in 2016?

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Caroline is an artist. She purchases canvases, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, which, in turn, sells it to an art lover for $4,500. How much market value does the gallery add?

Correct AnswerverifiedShow Answer

Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to homeowners. Which of the following would be counted in GDP?

Correct AnswerverifiedShow Answer

GDP is not a complete measure of well-being.

Correct AnswerverifiedShow Answer

The largest component of spending in GDP is

Correct AnswerverifiedShow Answer

To calculate GDP using the value-added method, one would add up

Correct AnswerverifiedShow Answer

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First, we must decide which goods to inc...
View Answer

Correct Answer
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Nominal GDP for 2018 equals (2...
View Answer

Correct Answer
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Disagree. It depends on whether the year...
View 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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