Question 1

Marijuana is an illegal good and broccoli is a legal good.Which of the following statements is true?

Accepted Answer

A)   Darin grows and sells marijuana to Lisa.When Darin and Lisa get married,GDP falls.
B)   Darin grows and sells marijuana to Lisa.When Darin and Lisa get married,GDP rises.
C)   Darin grows and sells broccoli to Lisa.When Darin and Lisa get married,GDP falls.
D)   Darin grows and sells broccoli to Lisa.When Darin and Lisa get married,GDP rises.E) A) and D)
F) A) and C)

Question 2

Expenditures by households on education are included in the consumption component of GDP.

Accepted Answer

A) True 
 B)False

Question 3

The term economists use to describe a situation in which the economy's overall price level is rising is

Accepted Answer

A)   growth.
B)   inflation.
C)   recession.
D)   expansion.E) All of the above
F) None of the above

Question 4

International data on GDP and socioeconomic variables

Accepted Answer

A)   are inconclusive about the relationship between GDP and the economic well-being of citizens.
B)   suggest that poor nations actually might enjoy a higher standard of living than do rich nations.
C)   leave no doubt that a nation's GDP is closely associated with its citizens' standard of living.
D)   indicate that there are few real differences in living standards around the world,in spite of the large differences in GDP between nations.E) A) and B)
F) B) and D)

Question 5

Table 23-3
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-3.What was Wrexington's consumption in 2008?

Accepted Answer

A)   $1810
B)   $2013
C)   $2315
D)   $3131E) A) and B)
F) A) and C)

Question 6

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

Accepted Answer

A) True 
 B)False

Question 7

A German citizen buys an automobile produced in the United States by a Japanese company.As a result,

Accepted Answer

A)   U.S.net exports increase,U.S.GDP is unaffected,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected.
B)   U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,and German GNP is unaffected,and German GDP decreases.
C)   U.S.net exports and GDP increase,Japanese GNP increases,German net exports decrease,and German GNP and GDP are unaffected.
D)   U.S.net exports and GDP are unaffected,Japanese GNP increases,and German net exports,GNP,and GDP decrease.E) A) and D)
F) A) and C)

Question 8

Other things equal,in countries with higher levels of real GDP per person,life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 9

Table 23-4
The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005.
 
-Refer to Table 23-4.Dachsland's output grew

Accepted Answer

A)   29.9% from 2005 to 2006.
B)   33.3% from 2006 to 2007.
C)   24.3% from 2006 to 2007.
D)   15.4% from 2007 to 2008.E) B) and D)
F) B) and C)

Question 10

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Accepted Answer

A) True 
 B)False

Question 11

Table 23-2
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-2.What was Wrexington's GDP in 2008?

Accepted Answer

A)   $6359
B)   $7136
C)   $7253
D)   $8147E) A) and B)
F) All of the above

Question 12

Table 23-4
The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005.
 
-Refer to Table 23-4.In 2007,Dachsland's

Accepted Answer

A)   nominal GDP was $585,real GDP was $780,and the GDP deflator was 75.
B)   nominal GDP was $585,real GDP was $825,and the GDP deflator was 70.9.
C)   nominal GDP was $1100,real GDP was $780,and the GDP deflator was 141.0.
D)   nominal GDP was $1100,real GDP was $825,and the GDP deflator was 133.3.E) B) and C)
F) None of the above

Question 13

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
 
-Refer to Table 23-5.In 2005,Batterland's nominal GDP was

Accepted Answer

A)   $300.
B)   $390.
C)   $400.
D)   $540.E) A) and C)
F) None of the above

Question 14

Transfer payments are

Accepted Answer

A)   included in GDP because they represent income to individuals.
B)   included in GDP because they eventually will be spent on consumption.
C)   not included in GDP because they are not payments for currently produced goods or services.
D)   not included in GDP because taxes will have to be raised to pay for them.E) A) and D)
F) B) and C)

Question 15

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
 
-Refer to Table 23-5.In 2005,Batterland's real GDP was

Accepted Answer

A)   $300.
B)   $390.
C)   $400.
D)   $540.E) B) and D)
F) A) and D)

Question 16

Gross domestic product measures two things at once:

Accepted Answer

A)   the total spending of everyone in the economy and the total saving of everyone in the economy.
B)   the total income of everyone in the economy and the total expenditure on the economy's output of goods and services.
C)   the value of the economy's output of goods and services for domestic citizens and the value of the economy's output of goods and services for the rest of the world.
D)   the total income of households in the economy and the total profit of firms in the economy.E) A) and B)
F) A) and C)

Question 17

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Accepted Answer

A)   the effect of taxes on the prices of airline tickets,the profitability of automobile-manufacturing firms,and employment trends in the food-service industry
B)   the price of beef,wage differences between genders,and antitrust laws
C)   how consumers maximize utility,and how prices are established in markets for agricultural products
D)   the percentage of the labor force that is out of work,and differences in average income from country to countryE) None of the above
F) A) and C)

Question 18

Table 23-3
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-3.What were Wrexington's net exports in 2008?

Accepted Answer

A)   -$217
B)   -$88
C)   $88
D)   $217E) B) and D)
F) None of the above

Question 19

Estimates of the values of which of the following non-market goods or services are included in GDP?

Accepted Answer

A)   the value of unpaid housework
B)   the value of vegetables and other foods that people grow in their gardens
C)   the estimated rental value of owner-occupied homes
D)   All of the above are included in GDP.E) A) and B)
F) All of the above

Question 20

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nations Income

Estimates of the values of which of the following non-market goods or services are included in GDP?

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Marijuana is an illegal good and broccoli is a legal good.Which of the following statements is true?

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Table 23-2 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-2.What was Wrexington's GDP in 2008?

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Gross domestic product measures two things at once:

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Other things equal,in countries with higher levels of real GDP per person,life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person.

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Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

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A German citizen buys an automobile produced in the United States by a Japanese company.As a result,

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Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2005,Batterland's nominal GDP was

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Table 23-4 The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005. -Refer to Table 23-4.Dachsland's output grew

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International data on GDP and socioeconomic variables

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What was Wrexington's consumption in 2008?

Correct AnswerverifiedShow Answer

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

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Table 23-4 The table below contains data for the country of Dachsland,which produces only pretzels and books.The base year is 2005. -Refer to Table 23-4.In 2007,Dachsland's

Correct AnswerverifiedShow Answer

If nominal GDP is $12,000 and the GDP deflator is 80,then real GDP is $15,000.

Correct AnswerverifiedShow Answer

The term economists use to describe a situation in which the economy's overall price level is rising is

Correct AnswerverifiedShow Answer

Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy's overall production of goods and services changes over time.

Correct AnswerverifiedShow Answer

Expenditures by households on education are included in the consumption component of GDP.

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Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What were Wrexington's net exports in 2008?

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Transfer payments are

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Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2005,Batterland's real GDP was

Correct AnswerverifiedShow Answer

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