Question 1

When there are sustained increases in real GDP over time, we say that the economy is undergoing

Accepted Answer

A)   economic stagnation.
B)   a recession.
C)   economic growth.
D)   massive changes in productive capacity.E) A) and B)
F) None of the above

Question 2

What is the fastest growing component of consumption in the United States?

Accepted Answer

A)   new home construction
B)   nondurable goods
C)   durable goods
D)   servicesE) B) and C)
F) A) and B) D

Question 3

When gross domestic product (GDP) is adjusted by adding any income earned abroad by U.S. firms or residents which is sent back to the United States and by subtracting any income earned in the United States by non-U.S. corporations or foreign nationals which is sent back to their home countries, it is called

Accepted Answer

A)   depreciation.
B)   subsidized income.
C)   international GDP.
D)   gross national product (GNP) .E) B) and C)
F) All of the above

Question 4

Which of the following would be a macroeconomic question?

Accepted Answer

A)   How have the retirement benefits in the auto industry changed over time?
B)   How has inflation increased over time?
C)   How has the price of gold increased over time?
D)   How has the number of commercial airline flights decreased over time?E) B) and C)
F) None of the above

Question 5

Depreciation is the term used when plants, equipment and housing deteriorate and wear out, thus losing their original values.

Accepted Answer

A) True 
 B)False

Question 6

As depicted in the circular flow diagram, firms

Accepted Answer

A)   demand the goods and services that households supply in product markets.
B)   supply the goods and services that households demand in product markets.
C)   demand the resources that households supply in product markets.
D)   supply the resources that households demand in factor markets.E) B) and D)
F) A) and B) B

Question 7

Macroeconomics differs from microeconomics in that

Accepted Answer

A)   macroeconomics is the study of individual markets, while microeconomics deals with the nation's economy as a whole.
B)   microeconomics is the study of individual markets, while macroeconomics deals with the nation's economy as a whole.
C)   macroeconomics focuses principally on social and political issues, while microeconomics involves the study of a nation's monetary system.
D)   microeconomics focuses principally on social and political issues, while macroeconomics involves the study of a nation's monetary system.E) B) and D)
F) None of the above B

Question 8

Which of the following should be included in U.S. GDP?

Accepted Answer

A)   a 3D television manufactured in Thailand and sold in the United States
B)   a 3D television manufactured in Thailand by a U.S. firm and sold in the United States
C)   a 3D television manufactured in the United States and sold in Thailand
D)   a used 3D television manufactured in the United States and sold in ThailandE) All of the above
F) C) and D)

Question 9

Blu-ray disc players, iPhones, and hybrid cars are generally considered to be ________ goods.

Accepted Answer

A)   durable
B)   nondurable
C)   intermediate
D)   serviceE) A) and D)
F) A) and C)

Question 10

Prior to 1996 the government measured real GDP using 1987 prices. What would the rapid growth in computers and the fall in computer prices tend to do to the difference between true GDP growth and measured real GDP growth, relative to using a later year?

Accepted Answer

Using 1987 prices would tend to overstat...

Question 11

National income is the income that individuals and firms earn from their production.

Accepted Answer

A) True 
 B)False

Question 12

In a business cycle, the period following a trough is called an expansion.

Accepted Answer

A) True 
 B)False

Question 13

GDP measures underestimate the value of output produced by an economy because they include services not transferred through markets.

Accepted Answer

A) True 
 B)False

Question 14

A firm's value added can be measured as the value of its

Accepted Answer

A)   profits.
B)   purchases of inputs from other firms.
C)   total sales.
D)   total sales, less purchases from other firms.E) A) and D)
F) All of the above

Question 15

A trade surplus occurs when

Accepted Answer

A)   a country purchases more from abroad than other countries purchase from it.
B)   a country sells more abroad than it purchases from abroad.
C)   a country's firms open more stores abroad than foreign firms open in the country.
D)   foreign firms open more stores in a country than the country opens in foreign countries.E) B) and D)
F) B) and C)

Question 16

How does real gross domestic product (GDP) differ from nominal GDP?

Accepted Answer

A)   Nominal GDP controls for price changes, while real GDP does not.
B)   Real GDP controls for price changes, while nominal GDP does not.
C)   Nominal GDP can be used to directly compare the amount of output produced from year to year, while real GDP cannot be used for such comparison.
D)   There is no difference between nominal GDP and real GDP.E) B) and C)
F) A) and B)

Question 17

Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?

Accepted Answer

We do we have any price index ...

Question 18

Transfer payments are excluded from government purchases in GDP accounting because

Accepted Answer

A)   they are difficult to measure.
B)   they are a reward to individuals who have been productive their entire lives.
C)   they are already included as part of investment.
D)   nothing is being produced in return for the payment.E) All of the above
F) A) and D)

Question 19

Recall the Application about the link between happiness and GDP to answer the following question(s) . Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender.
-This Application addresses the economic concept of

Accepted Answer

A)   real versus nominal GDP.
B)   fluctuations in GDP.
C)   GDP as a measure of welfare.
D)   measuring a nation's national income.E) B) and C)
F) C) and D)

Question 20

Personal disposable income is pre-tax income that flows directly to households.

Accepted Answer

A) True 
 B)False

Exam 5: Measuring a Nation's Production and Income

When there are sustained increases in real GDP over time, we say that the economy is undergoing

Correct Answer
verified

What is the fastest growing component of consumption in the United States?

Correct Answer
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D

Correct Answer
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Which of the following would be a macroeconomic question?

Correct Answer
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Depreciation is the term used when plants, equipment and housing deteriorate and wear out, thus losing their original values.

Correct Answer
verified

As depicted in the circular flow diagram, firms

Correct Answer
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B

Macroeconomics differs from microeconomics in that

Correct Answer
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B

Which of the following should be included in U.S. GDP?

Correct Answer
verified

Blu-ray disc players, iPhones, and hybrid cars are generally considered to be ________ goods.

Correct Answer
verified

Prior to 1996 the government measured real GDP using 1987 prices. What would the rapid growth in computers and the fall in computer prices tend to do to the difference between true GDP growth and measured real GDP growth, relative to using a later year?

Correct Answer
verified
Using 1987 prices would tend to overstat...
View Answer

National income is the income that individuals and firms earn from their production.

Correct Answer
verified

In a business cycle, the period following a trough is called an expansion.

Correct Answer
verified

GDP measures underestimate the value of output produced by an economy because they include services not transferred through markets.

Correct Answer
verified

A firm's value added can be measured as the value of its

Correct Answer
verified

A trade surplus occurs when

Correct Answer
verified

How does real gross domestic product (GDP) differ from nominal GDP?

Correct Answer
verified

Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?

Correct Answer
verified
We do we have any price index ...
View Answer

Transfer payments are excluded from government purchases in GDP accounting because

Correct Answer
verified

Correct Answer
verified

Personal disposable income is pre-tax income that flows directly to households.

Correct Answer
verified

Exam 5: Measuring a Nation's Production and Income

When there are sustained increases in real GDP over time, we say that the economy is undergoing

Correct AnswerverifiedShow Answer

What is the fastest growing component of consumption in the United States?

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

Which of the following would be a macroeconomic question?

Correct AnswerverifiedShow Answer

Depreciation is the term used when plants, equipment and housing deteriorate and wear out, thus losing their original values.

Correct AnswerverifiedShow Answer

As depicted in the circular flow diagram, firms

Correct AnswerverifiedB

Macroeconomics differs from microeconomics in that

Correct AnswerverifiedB

Which of the following should be included in U.S. GDP?

Correct AnswerverifiedShow Answer

Blu-ray disc players, iPhones, and hybrid cars are generally considered to be ________ goods.

Correct AnswerverifiedShow Answer

Prior to 1996 the government measured real GDP using 1987 prices. What would the rapid growth in computers and the fall in computer prices tend to do to the difference between true GDP growth and measured real GDP growth, relative to using a later year?

Correct AnswerverifiedUsing 1987 prices would tend to overstat...View AnswerShow Answer

National income is the income that individuals and firms earn from their production.

Correct AnswerverifiedShow Answer

In a business cycle, the period following a trough is called an expansion.

Correct AnswerverifiedShow Answer

GDP measures underestimate the value of output produced by an economy because they include services not transferred through markets.

Correct AnswerverifiedShow Answer

A firm's value added can be measured as the value of its

Correct AnswerverifiedShow Answer

A trade surplus occurs when

Correct AnswerverifiedShow Answer

How does real gross domestic product (GDP) differ from nominal GDP?

Correct AnswerverifiedShow Answer

Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?

Correct AnswerverifiedWe do we have any price index ...View AnswerShow Answer

Transfer payments are excluded from government purchases in GDP accounting because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Personal disposable income is pre-tax income that flows directly to households.

Correct AnswerverifiedShow Answer

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D

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B

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B

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Using 1987 prices would tend to overstat...
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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We do we have any price index ...
View Answer

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