Question 1

The two largest economies in the world in 2012 were:

Accepted Answer

A)   China and the U.S.
B)   Japan and the U.S.
C)   England and the U.S.
D)   China and Germany.E) A) and C)
F) B) and D)

Question 2

Intermediate goods are not included in GDP because:

Accepted Answer

A)   certain goods that are used in the production of a final good would be counted twice.
B)   the value of goods bought by producers to make something else would be counted twice.
C)   the value of goods used by firms to make the goods they sell is included in the firm's product; accounting for the value twice would overestimate GDP.
D)   All of these statements are trueE) B) and D)
F) A) and B)

Question 3

Gross domestic product is the sum of:

Accepted Answer

A)   the market values of all final goods and services produced within a country in a given period of time.
B)   the market values of all intermediate goods and services produced within a country in a given period of time.
C)   all final goods and services produced by a country's citizens in a given period of time.
D)   the market values of all final goods and services produced by a country's citizens in a given period of time.E) A) and B)
F) A) and C)

Question 4

Inventory is the stock of goods that a company:

Accepted Answer

A)   produces this year, but keeps to sell them next year.
B)   produced last year, but had to sell for below cost.
C)   produces now but has contractually already sold it.
D)   produces and sells in a given time period.E) None of the above
F) B) and C)

Question 5

Consumption, as a component of GDP:

Accepted Answer

A)   measures spending on goods and services by individuals and households.
B)   includes nondurable goods only.
C)   includes durable goods only.
D)   measures spending only on goods, not services, by private individuals and households.E) None of the above
F) A) and B)

Question 6

One of the most crucial ideas in macroeconomics is understanding that:

Accepted Answer

A)   zero unemployment is the best way to achieve economic growth.
B)   measuring total expenditures or total income both equal total production of an economy.
C)   prolonging economic downturns can be prolonged by fiscal policy.
D)   GNP is the most commonly used measurement of total production.E) C) and D)
F) B) and C)

Question 7

A depression is a:

Accepted Answer

A)   severe and extended period of recession.
B)   recession that lasts more than four quarters.
C)   recession that lasts more than three quarters.
D)   recession that lasts more than eight quarters.E) None of the above
F) C) and D)

Question 8

Using the expenditure method to estimate GDP, we would include:

Accepted Answer

A)   consumption, investment, government purchases, and net exports.
B)   consumption, government revenues, durable goods, and net exports.
C)   consumption, investment, government purchases, and exports.
D)   consumption, investment, government purchases, and imports.E) A) and C)
F) A) and B)

Question 9

Intermediate goods and services are:

Accepted Answer

A)   used only as inputs to produce something else and are not counted as separate items in GDP.
B)   goods that consumers buy in parts-like a new tire for their car-and are included as separate items in GDP.
C)   used only as inputs to produce something else and are counted as separate itemsin GDP.
D)   goods that consumers buy in parts-like a new tire for their car-and are not included as separate items in GDP.E) B) and C)
F) A) and D)

Question 10

In a simple closed economy, the income approach to calculating GDP is:

Accepted Answer

A)   wages + interest + rental income + profits.
B)   wages + interest + government income + profits
C)   wages + government earned interest + rental income + profits
D)   wages + interest + rental income profits.E) B) and C)
F) B) and D)

Question 11

The most commonly used metric for measuring the value of a national economy is:

Accepted Answer

A)   gross domestic product, or GDP.
B)   gross national product, or GNP.
C)   gross national income, or GNI.
D)   gross domestic income, or GDI.E) A) and C)
F) None of the above

Question 12

John is a U.S. citizen who works for Walmart located in France. John's work contributes to:

Accepted Answer

A)   U.S. GDP, but not U.S. GNP.
B)   U.S. GNP, but not U.S. GDP.
C)   both U.S. GDP and U.S. GNP.
D)   neither U.S. GDP nor U.S. GNP.E) C) and D)
F) All of the above

Question 13

One of the most common uses of GDP is to:

Accepted Answer

A)   track changes in an economy over time.
B)   see which country has the fairest distribution of wealth.
C)   evaluate different standards of living across countries.
D)   measure the amount of money has been made in the economy.E) All of the above
F) None of the above

Question 14

An example of a transfer payment is:

Accepted Answer

A)   a federal income tax refund.
B)   a Social Security payment.
C)   the $3 donation to the Wildlife Fund you make on your tax return.
D)   the taxes corporations pay on profit.E) None of the above
F) A) and B)

Question 15

When maximizing economic growth is a country's goal it:

Accepted Answer

A)   may work in opposition to the country's happiness in terms of satisfaction gained from leisure.
B)   increases the correlation to the country's happiness, because more money makes people happier.
C)   creates a perfect correlation to happiness, if the money is allocated fairly.
D)   everyone in the economy will be better off if it obtains its goal.E) A) and B)
F) A) and C)

Question 16

Upon getting a big promotion, Sally decides to buy a house in the neighborhood she grew up in as a child. In fact, the house she buys used to belong to a neighbor of hers, and so she's certain it's in good shape and well worth the $200,000 she pays for it. The only thing Sally needs to do is replace all the gutters for $1,000, which she happily does. How will GDP be affected by Sally's recent purchases?

Accepted Answer

A)   Consumption will increase by $1,000, and investment will increase by $200,000.
B)   Consumption will increase by $210,000.
C)   Investment will increase by $201,000.
D)   GDP will increase by $1000.E) All of the above
F) B) and C)

Question 17

The base year refers to the year whose:

Accepted Answer

A)   prices are used to calculate real GDP for all years.
B)   levels of output are used to calculate the real GDP for all years.
C)   prices are used to calculate nominal GDP for all years.
D)   levels of output are used to calculate the nominal GDP for all years.E) None of the above
F) B) and D)

Question 18

Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Accepted Answer

A)   The expenditure approach
B)   The income approach
C)   The value-added approach
D)   Any of these measurements will allow that comparison equally well.E) B) and C)
F) C) and D)

Question 19

In the United States the underground economy has been valued at around:

Accepted Answer

A)   7 percent or 8 percent of GDP.
B)   2 percent or 3 percent of GDP.
C)   5 percent to 6 percent of GDP.
D)   9 percent to 10 percent of GDP.E) All of the above
F) A) and B)

Question 20

In macroeconomics, we talk about:

Accepted Answer

A)   consumption at a regionallevel.
B)   production of mostgoods in the economy.
C)   prices in one specific market.
D)   investment on a national level.E) None of the above
F) B) and D)

Exam 7: Measuring GDP

A depression is a:

Correct Answer
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The most commonly used metric for measuring the value of a national economy is:

Correct Answer
verified

When maximizing economic growth is a country's goal it:

Correct Answer
verified

Consumption, as a component of GDP:

Correct Answer
verified

One of the most crucial ideas in macroeconomics is understanding that:

Correct Answer
verified

The two largest economies in the world in 2012 were:

Correct Answer
verified

John is a U.S. citizen who works for Walmart located in France. John's work contributes to:

Correct Answer
verified

Gross domestic product is the sum of:

Correct Answer
verified

Using the expenditure method to estimate GDP, we would include:

Correct Answer
verified

Inventory is the stock of goods that a company:

Correct Answer
verified

An example of a transfer payment is:

Correct Answer
verified

Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Correct Answer
verified

Intermediate goods are not included in GDP because:

Correct Answer
verified

In macroeconomics, we talk about:

Correct Answer
verified

Correct Answer
verified

The base year refers to the year whose:

Correct Answer
verified

In the United States the underground economy has been valued at around:

Correct Answer
verified

One of the most common uses of GDP is to:

Correct Answer
verified

Intermediate goods and services are:

Correct Answer
verified

In a simple closed economy, the income approach to calculating GDP is:

Correct Answer
verified

Exam 7: Measuring GDP

A depression is a:

Correct AnswerverifiedShow Answer

The most commonly used metric for measuring the value of a national economy is:

Correct AnswerverifiedShow Answer

When maximizing economic growth is a country's goal it:

Correct AnswerverifiedShow Answer

Consumption, as a component of GDP:

Correct AnswerverifiedShow Answer

One of the most crucial ideas in macroeconomics is understanding that:

Correct AnswerverifiedShow Answer

The two largest economies in the world in 2012 were:

Correct AnswerverifiedShow Answer

John is a U.S. citizen who works for Walmart located in France. John's work contributes to:

Correct AnswerverifiedShow Answer

Gross domestic product is the sum of:

Correct AnswerverifiedShow Answer

Using the expenditure method to estimate GDP, we would include:

Correct AnswerverifiedShow Answer

Inventory is the stock of goods that a company:

Correct AnswerverifiedShow Answer

An example of a transfer payment is:

Correct AnswerverifiedShow Answer

Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Correct AnswerverifiedShow Answer

Intermediate goods are not included in GDP because:

Correct AnswerverifiedShow Answer

In macroeconomics, we talk about:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The base year refers to the year whose:

Correct AnswerverifiedShow Answer

In the United States the underground economy has been valued at around:

Correct AnswerverifiedShow Answer

One of the most common uses of GDP is to:

Correct AnswerverifiedShow Answer

Intermediate goods and services are:

Correct AnswerverifiedShow Answer

In a simple closed economy, the income approach to calculating GDP is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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