Question 1

According to the expenditure approach, the largest component of GDP is:

Accepted Answer

A)   government spending.
B)   proprietor's income.
C)   net interest.
D)   personal consumption expenditures.
E)   compensation of employees.F) A) and B)
G) A) and C)

Question 2

National income (NI)  is calculated by adjusting GDP for: ​

Accepted Answer

A)   ​ depreciation.
B)   ​investment and net exports.
C)   ​Social Security insurance contributions and transfer payments.
D)   ​corporate and personal income taxes.E) A) and B)
F) A) and C)

Question 3

Gross domestic product (GDP)  does not include:

Accepted Answer

A)   used goods sold in the current time period.
B)   foreign produced goods.
C)   intermediate as well as final goods.
D)   None of the above would be included.E) All of the above
F) A) and D)

Question 4

The most broadly based price index is the:

Accepted Answer

A)   real GDP price index.
B)   consumer price index.
C)   producer price index.
D)   GDP chain price index.E) None of the above
F) A) and B)

Question 5

Exhibit 11-8  GDP data (billions of dollars)   In Exhibit 11-8, compute national income (NI) . Which of the following is correct?

Accepted Answer

A)   $7,400 billion.
B)   $7,250 billion.
C)   $8,150 billion.
D)   $8,200 billion.
E)   $8,350 billion.F) B) and D)
G) All of the above

Question 6

National income is calculated as GDP:

Accepted Answer

A)   plus depreciation.
B)   plus exports.
C)   minus imports.
D)   minus depreciation.E) A) and B)
F) B) and C)

Question 7

Exhibit 11-8  GDP data (billions of dollars)   In Exhibit 11-8, and using the expenditures approach, compute gross domestic product (GDP) . Which of the following is correct?

Accepted Answer

A)   $8,500 billion.
B)   $8,400 billion.
C)   $7,400 billion.
D)   $8,650 billion.
E)   $8,350 billion.F) B) and E)
G) B) and C)

Question 8

Exhibit 11-8  GDP data (billions of dollars)   In Exhibit 11-8, and using the expenditures approach, compute personal consumption expenditures. Which of the following is correct?

Accepted Answer

A)   $6,750 billion.
B)   $6,600 billion.
C)   $6,550 billion.
D)   $6,100 billion.
E)   $5,000 billion.F) A) and B)
G) A) and C)

Question 9

The expenditure approach to GDP accounting includes:

Accepted Answer

A)   wages and salaries.
B)   net exports.
C)   net interest.
D)   corporate profit.
E)   proprietors' income.F) D) and E)
G) A) and B)

Question 10

Personal consumption expenditures include:

Accepted Answer

A)   all commodities that business firms buy.
B)   the purchase prices paid for stocks and bonds by individual households.
C)   the construction of residential housing.
D)   all goods and services bought by households.
E)   the corrected value of housewives' services.F) B) and E)
G) C) and D)

Question 11

The circular flow model illustrates that aggregate spending in the product markets equals 70 percent of aggregate income earned in the factor markets.

Accepted Answer

A) True 
 B)False

Question 12

The largest component of household consumption spending is expenditures on:

Accepted Answer

A)   services.
B)   durable goods.
C)   nondurable goods.
D)   food.
E)   transportation.F) A) and C)
G) A) and D)

Question 13

Gross private domestic investment includes business:

Accepted Answer

A)   purchases of capital goods, all new construction, and purchases of consumer durable goods.
B)   purchases of capital goods, all new construction, and inventory investment.
C)   purchases of capital goods, all new commercial construction, and inventory investment.
D)   purchases of capital goods, all new residential construction, and inventory investment.
E)   purchases of all types of durable goods, all new construction, and inventory investment.F) C) and D)
G) B) and D)

Question 14

Nominal gross domestic product is based on the existing prices at which final goods are actually sold.

Accepted Answer

A) True 
 B)False

Question 15

The circular flow model represents the establishment of market value for:

Accepted Answer

A)   goods and services.
B)   wages and salaries.
C)   profits and rents.
D)   all of the above.E) A) and D)
F) B) and C)

Question 16

Which of the following is included in personal income but not in national income?

Accepted Answer

A)   Compensation for workers.
B)   Proprietors' income.
C)   Corporate profits.
D)   Social Security payments.
E)   Rent.F) All of the above
G) A) and B)

Question 17

Exhibit 11-2  Gross domestic product data  As shown in Exhibit 11-2, net exports are:

Accepted Answer

A)   $50 billion.
B)   $15 billion.
C)   $35 billion.
D)   $65 billion.E) All of the above
F) A) and C)

Question 18

GDP measures the economy's production of:

Accepted Answer

A)   final goods and services.
B)   intermediate goods.
C)   consumer goods and services.
D)   capital goods.E) None of the above
F) A) and C)

Question 19

Exhibit 11-2  Gross domestic product data  As shown in Exhibit 11-2, total spending by government is:

Accepted Answer

A)   $600 billion.
B)   $100 billion.
C)   $200 billion.
D)   $300 billion.
E)   $800 billion.F) A) and B)
G) A) and E)

Question 20

If you buy a commemorative Princess Diana stamp issued by the British government, the purchase is considered part of:

Accepted Answer

A)   C.
B)   I.
C)   G.
D)   X.
E)   M.F) A) and E)
G) A) and D)

Exam 11: Gross Domestic Product

Gross domestic product (GDP) does not include:

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The most broadly based price index is the:

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Exhibit 11-2 Gross domestic product data As shown in Exhibit 11-2, total spending by government is:

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Exhibit 11-2 Gross domestic product data As shown in Exhibit 11-2, net exports are:

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National income (NI) is calculated by adjusting GDP for: ​

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Exhibit 11-8 GDP data (billions of dollars) In Exhibit 11-8, and using the expenditures approach, compute gross domestic product (GDP) . Which of the following is correct?

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Nominal gross domestic product is based on the existing prices at which final goods are actually sold.

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According to the expenditure approach, the largest component of GDP is:

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Gross private domestic investment includes business:

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GDP measures the economy's production of:

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National income is calculated as GDP:

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The circular flow model represents the establishment of market value for:

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Personal consumption expenditures include:

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If you buy a commemorative Princess Diana stamp issued by the British government, the purchase is considered part of:

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Exhibit 11-8 GDP data (billions of dollars) In Exhibit 11-8, compute national income (NI) . Which of the following is correct?

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Exhibit 11-8 GDP data (billions of dollars) In Exhibit 11-8, and using the expenditures approach, compute personal consumption expenditures. Which of the following is correct?

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The expenditure approach to GDP accounting includes:

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The circular flow model illustrates that aggregate spending in the product markets equals 70 percent of aggregate income earned in the factor markets.

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Which of the following is included in personal income but not in national income?

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The largest component of household consumption spending is expenditures on:

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National income (NI) is calculated by adjusting GDP for:

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