Question 1

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Accepted Answer

A) True 
 B)False

Question 2

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 3

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Accepted Answer

A)   U.S. exports and U.S imports increase.
B)   U.S. exports but not U.S. imports increase.
C)   U.S. imports but not U.S. exports increase.
D)   neither U.S. exports nor U.S. imports increase.E) A) and B)
F) B) and D)

Question 4

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Accepted Answer

A) True 
 B)False

Question 5

GDP

Accepted Answer

A)   is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being.
B)   is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
C)   is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being.
D)   is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well-being.E) B) and C)
F) A) and D)

Question 6

For monitoring fluctuations in the national economy, which measure of income is best?

Accepted Answer

A)   GDP
B)   GNP
C)   NNP
D)   It does not matter very much which measure we use.E) B) and D)
F) A) and B)

Question 7

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about nominal GDP and real GDP is correct?

Accepted Answer

A)   Nominal GDP is a better gauge of economic well-being than real GDP.
B)   Real GDP is a better gauge of economic well-being than nominal GDP.
C)   Real GDP and nominal GDP are equally good measures of economic well-being.
D)   Neither nominal nor real GDP provide a measure of economic well-being.E) A) and B)
F) None of the above

Question 9

The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest? Country
GDP (Constant US$) 
GDP(Current US$) 
Population
Germany
2,091,573
3,649,493
82) 11
Japan
5,166,281
4,910,839
127) 70
u.S.
11,513,872
14,093,309
304) 06

Accepted Answer

A)   Japan, Germany, United States
B)   Japan, United States, Germany
C)   Germany, United States, Japan
D)   United States, Japan, GermanyE) A) and B)
F) All of the above

Question 10

Table 5-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.
Prices and Quantities
 
-Refer to Table 5-6. From 2010 to 2011, this country's output grew

Accepted Answer

A)   12.5%.
B)   14.3%.
C)   48.1%.
D)   155.6%.E) B) and C)
F) C) and D)

Question 11

Changes in real GDP reflect only changes in the amounts being produced.

Accepted Answer

A) True 
 B)False

Question 12

The GDP deflator is the ratio of

Accepted Answer

A)   real GDP to nominal GDP multiplied by 100.
B)   real GDP to the inflation rate multiplied by 100.
C)   nominal GDP to real GDP multiplied by 100.
D)   nominal GDP to the inflation rate multiplied by 100.E) B) and C)
F) None of the above

Question 13

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Accepted Answer

A)   GDP is not a useful measure of society's welfare.
B)   GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government.
C)   GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.
D)   GDP is still the best measure of society's welfare because these other values cannot actually be measured.E) A) and C)
F) B) and D)

Question 14

Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct?

Accepted Answer

A)   Only Ralph's payments are included in GDP.
B)   Ralph's payments as well as the estimated value of Mike's mowing services are included in GDP.
C)   Neither Ralph's payments nor the estimated value of Mike's mowing services is included in GDP.
D)   Ralph's payments are included in GDP, while the estimated value of Mike's mowing services is included in GDP only if Mike voluntarily provides his estimate of that value to the government.E) B) and D)
F) B) and C)

Question 15

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Accepted Answer

A)   real output and the price level both rose.
B)   real output rose and the price level fell.
C)   real output fell and the price level rose.
D)   real output and the price level both fell.E) A) and B)
F) A) and C)

Question 16

National income is defined as

Accepted Answer

A)   the total income of a nation's permanent residents minus losses from depreciation.
B)   the income that households and noncorporate businesses receive.
C)   the total income earned by a nation's permanent residents in the production of goods and services.
D)   the income that households and noncorporate businesses have left after satisfying all their obligations to the government.E) B) and D)
F) B) and C)

Question 17

In the economy of Ukzten in 2010, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $2000, and imports were $600. What was Ukzten's investment in 2010?

Accepted Answer

A)   $1400
B)   $1600
C)   $2400
D)   $3600E) None of the above
F) A) and D)

Question 18

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 19

In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?

Accepted Answer

A)   $970
B)   $1230
C)   $1370
D)   $1630E) A) and B)
F) A) and C)

Question 20

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s)  is (are)  GDP higher?

Accepted Answer

A)   the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) A) and B)
F) All of the above

Exam 5: Measuring a Nations Income

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct Answer
verified

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Correct Answer
verified

Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct?

Correct Answer
verified

National income is defined as

Correct Answer
verified

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Correct Answer
verified

Which of the following statements about nominal GDP and real GDP is correct?

Correct Answer
verified

Changes in real GDP reflect only changes in the amounts being produced.

Correct Answer
verified

In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?

Correct Answer
verified

GDP

Correct Answer
verified

In the economy of Ukzten in 2010, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $2000, and imports were $600. What was Ukzten's investment in 2010?

Correct Answer
verified

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Correct Answer
verified

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Correct Answer
verified

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) is (are) GDP higher?

Correct Answer
verified

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

Correct Answer
verified

The GDP deflator is the ratio of

Correct Answer
verified

Correct Answer
verified

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. From 2010 to 2011, this country's output grew

Correct Answer
verified

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct Answer
verified

For monitoring fluctuations in the national economy, which measure of income is best?

Correct Answer
verified

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct Answer
verified

Exam 5: Measuring a Nations Income

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Correct AnswerverifiedShow Answer

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Correct AnswerverifiedShow Answer

Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct?

Correct AnswerverifiedShow Answer

National income is defined as

Correct AnswerverifiedShow Answer

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Correct AnswerverifiedShow Answer

Which of the following statements about nominal GDP and real GDP is correct?

Correct AnswerverifiedShow Answer

Changes in real GDP reflect only changes in the amounts being produced.

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?

Correct AnswerverifiedShow Answer

GDP

Correct AnswerverifiedShow Answer

In the economy of Ukzten in 2010, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $2000, and imports were $600. What was Ukzten's investment in 2010?

Correct AnswerverifiedShow Answer

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Correct AnswerverifiedShow Answer

GDP can measure either the total income of everyone in the economy or the total expenditure on the economy's output of goods and services, but GDP cannot measure both at the same time.

Correct AnswerverifiedShow Answer

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) is (are) GDP higher?

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 GDP deflator is the ratio of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 5-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Prices and Quantities -Refer to Table 5-6. From 2010 to 2011, this country's output grew

Correct AnswerverifiedShow Answer

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

Correct AnswerverifiedShow Answer

For monitoring fluctuations in the national economy, which measure of income is best?

Correct AnswerverifiedShow Answer

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

Correct AnswerverifiedShow Answer

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