Question 1

How is net national product (NNP)  calculated?

Accepted Answer

A)   Saving is subtracted from the total income of a nation's citizens.
B)   Saving is added to the total income of a nation's citizens
C)   Depreciation losses are subtracted from the total income of a nation's citizens.
D)   Depreciation losses are added to the total income of a nation's citizens.E) A) and D)
F) B) and C)

Question 2

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = 1...

Question 3

Consumption is $7 trillion, investment is $1.5 trillion, government expenditures are $2 trillion, government transfer payments are $1 trillion, exports are $1.50 trillion and imports are $1.25 trillion. What is GDP?

Accepted Answer

GDP = C + I + G + NX = $7 tril...

Question 4

Table 23-3
The table below contains data for the country of Crete for the year 2010. 
-Refer to Table 23-3. What were Crete's net exports in 2010?

Accepted Answer

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

Question 5

Explain how real GDP differs from nominal GDP.

Accepted Answer

Real GDP reflects on...

Question 6

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Accepted Answer

A)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83.
B)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16.
C)   nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16.
D)   nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.E) None of the above
F) A) and B)

Question 7

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 C)
F) B) and D)

Question 8

Real GDP is the yearly production of final goods and services valued at

Accepted Answer

A)   current prices.
B)   constant prices.
C)   expected future prices.
D)   the ratio of current prices to constant prices.E) B) and C)
F) A) and C)

Question 9

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp, Inc., which uses the rawhide to produce and sell dog chews. With each $1 worth of rawhide that it buys from Rolling Rawhide, Chewy Chomp, Inc. produces a dog chew and sells it for $2.50. Neither firm had any inventory at the beginning of 2014. During that year, Rolling Rawhide produced enough rawhide for 2000 dog chews. Chewy Chomp, Inc. bought 90% of that rawhide for $1800 and promised to buy the remaining 10% for $200 in 2015. Chewy Chomp, Inc. produced 1800 dog chews during 2014 and sold each one during that year for $2.50. What was the economy's GDP for 2014?

Accepted Answer

A)   $3,800
B)   $4,500
C)   $4,700
D)   $5,000E) A) and C)
F) A) and B)

Question 10

Table 23-3
The table below contains data for the country of Crete for the year 2010. 
-Refer to Table 23-3. What was Crete's consumption in 2010?

Accepted Answer

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

Question 11

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Accepted Answer

A) True 
 B)False

Question 12

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) None of the above
F) B) and C)

Question 13

U.S. GDP

Accepted Answer

A)   includes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.
B)   includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries.
C)   excludes production of foreigners working in the U.S. but includes production by U.S. residents working in foreign countries.
D)   excludes production of foreigners working in the U.S. and production by U.S. residents working in foreign countries.E) B) and C)
F) A) and D)

Question 14

Which of the following subcomponents of GDP can be either positive or negative?

Accepted Answer

A)   inventory investment
B)   exports
C)   government purchases
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 15

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Accepted Answer

A)   The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.
B)   The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
C)   The value of the cars in inventory will be counted as part of 2015 GDP, and the value of the cars sold in 2016 will increase 2016 GDP.
D)   The value of the cars in inventory will not affect 2015 GDP, and the value of the cars sold in 2016 will not increase 2016 GDP.E) C) and D)
F) A) and B)

Question 16

The investment component of GDP refers to financial investment in stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following items is counted as part of government purchases?

Accepted Answer

A)   The federal government pays $2,000 in Social Security benefits to a retired person.
B)   The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
C)   The state of Nebraska pays $1,000 to help a low-income family pay its medical bills.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 18

Which of the following statements about GDP is correct?

Accepted Answer

A)   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy's labor force.
B)   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
C)   GDP is to a nation's economy as household income is to a household.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

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) None of the above
F) B) and C)

Question 20

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. 
-Refer to Table 23-6. In 2010, this country's real GDP was

Accepted Answer

A)   $620.
B)   $260.
C)   $400.
D)   $630.E) B) and D)
F) A) and C)

Exam 23: Measuring a Nations Income

Explain how real GDP differs from nominal GDP.

Correct Answer
verified
Real GDP reflects on...
View Answer

U.S. GDP

Correct Answer
verified

Consumption is $7 trillion, investment is $1.5 trillion, government expenditures are $2 trillion, government transfer payments are $1 trillion, exports are $1.50 trillion and imports are $1.25 trillion. What is GDP?

Correct Answer
verified
GDP = C + I + G + NX = $7 tril...
View Answer

Which of the following statements about GDP is correct?

Correct Answer
verified

International data on GDP and socioeconomic variables

Correct Answer
verified

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Correct Answer
verified

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct Answer
verified

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Correct Answer
verified

The investment component of GDP refers to financial investment in stocks and bonds.

Correct Answer
verified

Which of the following items is counted as part of government purchases?

Correct Answer
verified

Correct Answer
verified

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Correct Answer
verified
The GDP Deflator = 1...
View Answer

Real GDP is the yearly production of final goods and services valued at

Correct Answer
verified

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

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's consumption in 2010?

Correct Answer
verified

The GDP deflator is the ratio of

Correct Answer
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How is net national product (NNP) calculated?

Correct Answer
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Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's net exports in 2010?

Correct Answer
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Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2010, this country's real GDP was

Correct Answer
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Which of the following subcomponents of GDP can be either positive or negative?

Correct Answer
verified

Exam 23: Measuring a Nations Income

Explain how real GDP differs from nominal GDP.

Correct AnswerverifiedReal GDP reflects on...View AnswerShow Answer

U.S. GDP

Correct AnswerverifiedShow Answer

Consumption is $7 trillion, investment is $1.5 trillion, government expenditures are $2 trillion, government transfer payments are $1 trillion, exports are $1.50 trillion and imports are $1.25 trillion. What is GDP?

Correct AnswerverifiedGDP = C + I + G + NX = $7 tril...View AnswerShow Answer

Which of the following statements about GDP is correct?

Correct AnswerverifiedShow Answer

International data on GDP and socioeconomic variables

Correct AnswerverifiedShow Answer

The local car dealership has an increase in inventory of 100 newly produced cars in 2015. In 2016, it sells all 100 cars. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300.

Correct AnswerverifiedShow Answer

Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,

Correct AnswerverifiedShow Answer

The investment component of GDP refers to financial investment in stocks and bonds.

Correct AnswerverifiedShow Answer

Which of the following items is counted as part of government purchases?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Nominal GDP is $12 trillion and real GDP is $15 trillion. What is the GDP deflator? Show your work.

Correct AnswerverifiedThe GDP Deflator = 1...View AnswerShow Answer

Real GDP is the yearly production of final goods and services valued at

Correct AnswerverifiedShow Answer

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

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's consumption in 2010?

Correct AnswerverifiedShow Answer

The GDP deflator is the ratio of

Correct AnswerverifiedShow Answer

How is net national product (NNP) calculated?

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What were Crete's net exports in 2010?

Correct AnswerverifiedShow Answer

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2010, this country's real GDP was

Correct AnswerverifiedShow Answer

Which of the following subcomponents of GDP can be either positive or negative?

Correct AnswerverifiedShow Answer

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Real GDP reflects on...
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GDP = C + I + G + NX = $7 tril...
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The GDP Deflator = 1...
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