Question 1

In 2015, the imports of the United States were $516 billion higher than its exports.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is false?

Accepted Answer

A)  Capital income is made up of profits, rental payments, and interest payments.
B)  Labor income is made up of wages, salaries, and fringe benefits.
C)  For purposes of measuring GDP, only net investment is counted.
D)  Labor income is greater than half of GDP.
E)  Net investment is the difference between gross investment and depreciation.F) B) and D)
G) D) and E)

Question 3

The spending approach to calculating GDP is the only approach in which double counting needs to be avoided.

Accepted Answer

A) True 
 B)False

Question 4

Answer the questions below:

Accepted Answer

The answer of Answer the questions below:
 
...

Question 5

In which spending category would you enter the following transaction if you were trying to calculate U.S. GDP? "People in France flock to see the latest Brad Pitt movie that was produced in Hollywood."

Accepted Answer

A)  Net exports
B)  Consumption
C)  Investment
D)  purchasesE) C) and D)
F) B) and D)

Question 6

If net exports are negative, spending by households, firms, and government must be greater than the income people earn in producing GDP.

Accepted Answer

A) True 
 B)False

Question 7

One trillion is equal to 1 million millions, or 1,000,000,000,000.

Accepted Answer

A) True 
 B)False

Question 8

Transfer payments

Accepted Answer

A)  are excluded from GDP but included in government purchases.
B)  are excluded from government purchases and GDP.
C)  are included in government purchases and in GDP.
D)  are excluded from government purchases but included in GDP.
E)  are included in government purchases but excluded from GDP.F) A) and B)
G) A) and C)

Question 9

If we calculate GDP by adding the dollars of all goods that buyers pay, we make an error as a result of

Accepted Answer

A)  omitting opportunity costs.
B)  double counting some goods.
C)  missing the negative values that some buyers perceive for some goods.
D)  omitting some measures of well-being.
E)  ignoring inflation.F) A) and E)
G) A) and D)

Question 10

Exhibit 18-5
 
-According to the data in Exhibit 18-5, nominal GDP in 2016 equaled

Accepted Answer

A)  $500.
B)  $625.
C)  $640.
D)  $800.
E)  $900.F) A) and B)
G) A) and C)

Question 11

Which of the following statements about dissaving is the most accurate?

Accepted Answer

A)  Dissaving occurs when people stop saving.
B)  Dissaving is more likely to occur among middle-aged people than among people in other age groups.
C)  Individuals are dissaving when the amount they consume plus their taxes exceeds their income.
D)  Dissaving only happens with the government.
E)  Dissaving only occurs with the young.F) A) and B)
G) A) and C)

Question 12

If inventories increase in a given year, they should be added in when calculating GDP.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the correct ordering if we want to rank the four spending components, as a share of U.S. GDP in 2015, in descending (from highest to lowest)  order?

Accepted Answer

A)  Consumption, government purchases, investment, net exports
B)  Consumption, investment, government purchases, net exports
C)  Government purchases, consumption, investment, net exports
D)  Consumption, government purchases, net exports, investment
E)  Consumption, investment, net exports, government purchasesF) B) and E)
G) A) and E)

Question 14

Assume a simple economy with no government and no foreign trade. The firm produces 100 units of output, sells 80 to consumers for a price of $1, and adds the remaining 20 to its inventory at a price of $0.75. Each unit costs $0.75 to produce, which is equal to the labor cost. There are no other costs associated with production.

Accepted Answer

The answer of Assume a simple economy with no government...

Question 15

Net exports are

Accepted Answer

A)  the sum of exports and imports.
B)  the difference between exports and imports.
C)  exports net of services.
D)  imports less exports.
E)  exports earmarked for nongovernmental use.F) B) and D)
G) C) and E)

Question 16

Which of the following best describes what is meant by the term underground economy?

Accepted Answer

A)  Economic activity that is not reported to the government
B)  Economic activity conducted by the homeless
C)  Illegal drug activity
D)  Economic activity associated with the shadier side of the economy
E)  Economic activity that is hard to classifyF) None of the above
G) C) and D)

Question 17

Exhibit 18-6
  Multiple Choice
-According to the data in Exhibit 18-6, using 2016 as the base year, prices rose

Accepted Answer

A)  25 percent.
B)  28 percent.
C)  40 percent.
D)  3 percent.
E)  30 percent.F) C) and D)
G) None of the above

Question 18

In which spending category would you enter the following transaction? Company A successfully launches a hostile takeover of Company B, in which it purchases all the assets of Company B.

Accepted Answer

A)  Government purchases
B)  Net exports
C)  Investment
D)  Consumption
E)  None of theseF) B) and E)
G) A) and D)

Question 19

All of the following are approaches for calculating GDP EXCEPT

Accepted Answer

A)  spending.
B)  income.
C)  production.
D)  cost.
E)  None of these: All can be used to calculate GDP.F) B) and D)
G) All of the above

Question 20

National saving is defined as

Accepted Answer

A)  the amount of saving by businesses and households.
B)  the amount of saving by businesses.
C)  the amount of saving by households.
D)  the amount of saving by households and the government.
E)  the amount of saving by businesses and the government.F) B) and D)
G) A) and B)

Exam 18: Measuring the Production, Income, and Spending of Nations

Which of the following statements is false?

Correct Answer
verified

Answer the questions below:

Correct Answer
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One trillion is equal to 1 million millions, or 1,000,000,000,000.

Correct Answer
verified

Net exports are

Correct Answer
verified

Transfer payments

Correct Answer
verified

If inventories increase in a given year, they should be added in when calculating GDP.

Correct Answer
verified

Which of the following best describes what is meant by the term underground economy?

Correct Answer
verified

All of the following are approaches for calculating GDP EXCEPT

Correct Answer
verified

In which spending category would you enter the following transaction? Company A successfully launches a hostile takeover of Company B, in which it purchases all the assets of Company B.

Correct Answer
verified

Exhibit 18-5 -According to the data in Exhibit 18-5, nominal GDP in 2016 equaled

Correct Answer
verified

The spending approach to calculating GDP is the only approach in which double counting needs to be avoided.

Correct Answer
verified

If we calculate GDP by adding the dollars of all goods that buyers pay, we make an error as a result of

Correct Answer
verified

In 2015, the imports of the United States were $516 billion higher than its exports.

Correct Answer
verified

Which of the following statements about dissaving is the most accurate?

Correct Answer
verified

If net exports are negative, spending by households, firms, and government must be greater than the income people earn in producing GDP.

Correct Answer
verified

In which spending category would you enter the following transaction if you were trying to calculate U.S. GDP? "People in France flock to see the latest Brad Pitt movie that was produced in Hollywood."

Correct Answer
verified

Exhibit 18-6 Multiple Choice -According to the data in Exhibit 18-6, using 2016 as the base year, prices rose

Correct Answer
verified

National saving is defined as

Correct Answer
verified

Correct Answer
verified

Which of the following is the correct ordering if we want to rank the four spending components, as a share of U.S. GDP in 2015, in descending (from highest to lowest) order?

Correct Answer
verified

Exam 18: Measuring the Production, Income, and Spending of Nations

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Answer the questions below:

Correct AnswerverifiedShow Answer

One trillion is equal to 1 million millions, or 1,000,000,000,000.

Correct AnswerverifiedShow Answer

Net exports are

Correct AnswerverifiedShow Answer

Transfer payments

Correct AnswerverifiedShow Answer

If inventories increase in a given year, they should be added in when calculating GDP.

Correct AnswerverifiedShow Answer

Which of the following best describes what is meant by the term underground economy?

Correct AnswerverifiedShow Answer

All of the following are approaches for calculating GDP EXCEPT

Correct AnswerverifiedShow Answer

In which spending category would you enter the following transaction? Company A successfully launches a hostile takeover of Company B, in which it purchases all the assets of Company B.

Correct AnswerverifiedShow Answer

Exhibit 18-5 -According to the data in Exhibit 18-5, nominal GDP in 2016 equaled

Correct AnswerverifiedShow Answer

The spending approach to calculating GDP is the only approach in which double counting needs to be avoided.

Correct AnswerverifiedShow Answer

If we calculate GDP by adding the dollars of all goods that buyers pay, we make an error as a result of

Correct AnswerverifiedShow Answer

In 2015, the imports of the United States were $516 billion higher than its exports.

Correct AnswerverifiedShow Answer

Which of the following statements about dissaving is the most accurate?

Correct AnswerverifiedShow Answer

If net exports are negative, spending by households, firms, and government must be greater than the income people earn in producing GDP.

Correct AnswerverifiedShow Answer

In which spending category would you enter the following transaction if you were trying to calculate U.S. GDP? "People in France flock to see the latest Brad Pitt movie that was produced in Hollywood."

Correct AnswerverifiedShow Answer

Exhibit 18-6 Multiple Choice -According to the data in Exhibit 18-6, using 2016 as the base year, prices rose

Correct AnswerverifiedShow Answer

National saving is defined as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is the correct ordering if we want to rank the four spending components, as a share of U.S. GDP in 2015, in descending (from highest to lowest) order?

Correct AnswerverifiedShow Answer

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