Question 1

Suppose that net investment in 2016 was $90 billion and depreciation was $27 billion. Gross investment in 2016 was

Accepted Answer

A)   -$27 billion.
B)   $63 billion.
C)   $90 billion.
D)   $117 billion.E) A) and B)
F) A) and D)

Question 2

If national income is $400 billion, personal income is $350 billion, personal taxes are $100 billion, then disposable income equals

Accepted Answer

A)   $450 billion.
B)   $300 billion.
C)   $250 billion.
D)   -$50 billion.E) C) and D)
F) None of the above

Question 3

Refer to the information provided in Table 6.9 below to answer the questions that follow.
Table 6.9 
-Refer to Table 6.9. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 3 is

Accepted Answer

A)   $204.
B)   $222.
C)   $250.
D)   $270.E) C) and D)
F) All of the above

Question 4

In 2016 final sales equal $500 billion and the change in business inventories is -$40 billion. GDP in 2016 is

Accepted Answer

A)   -$40 billion.
B)   $460 billion.
C)   $500 billion.
D)   $540 billion.E) None of the above
F) All of the above

Question 5

GDP generally reflects the production of social ills such as pollution.

Accepted Answer

A) True 
 B)False

Question 6

Gross national income (GNI) is GDP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation.

Accepted Answer

A) True 
 B)False

Question 7

If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals

Accepted Answer

A)   $480 billion.
B)   $320 billion.
C)   $280 billion.
D)   $80 billion.E) A) and B)
F) A) and C)

Question 8

If the GDP deflator is less than 100, then

Accepted Answer

A)   nominal GDP is greater than real GDP.
B)   nominal GDP is lower than real GDP.
C)   nominal GDP equals real GDP.
D)   prices decreased by more than half between the current and the base years.E) A) and B)
F) All of the above

Question 9

When GDP is measured in "current prices" it is known as the

Accepted Answer

A)   real GDP.
B)   nominal GDP.
C)   real GNP.
D)   nominal GNP.E) None of the above
F) B) and D)

Question 10

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1 
-Refer to Table 6.1. The value of gross domestic product in billions of dollars is

Accepted Answer

A)   3,000.
B)   3,075.
C)   3,125.
D)   3,750.E) A) and B)
F) A) and C)

Question 11

Gross investment minus depreciation equals

Accepted Answer

A)   GNP.
B)   net investment.
C)   change in business inventories.
D)   GDP.E) B) and C)
F) A) and C)

Question 12

If net investment is positive, then

Accepted Answer

A)   gross investment is greater than depreciation.
B)   gross investment is less than depreciation.
C)   gross investment equals depreciation.
D)   depreciation is negative.E) C) and D)
F) None of the above

Question 13

Refer to the information provided in Table 6.4 below to answer the questions that follow.
Table 6.4 
-Refer to Table 6.4. The value for GNP in billions of dollars is

Accepted Answer

A)   900.
B)   930.
C)   980.
D)   1,010.E) None of the above
F) A) and B)

Question 14

Which of the following would not be counted in 2016's GDP?

Accepted Answer

A)   the value of a 2008 boat you purchase from a boat dealer in 2016
B)   the 2016 salary of a used motorcycle salesperson
C)   the commissions earned by a real estate agent in selling condominiums built prior to 2016
D)   the value of a refrigerator manufactured in 2016 but not sold in 2016E) All of the above
F) B) and C)

Question 15

Production in the illegal or underground economy is not reflected in GDP.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the information provided in Table 6.6 below to answer the questions that follow.
Table 6.6 
-Refer to Table 6.6. The value for gross domestic product in billions of dollars is

Accepted Answer

A)   3,800.
B)   4,000.
C)   4,500.
D)   4,600.E) A) and B)
F) A) and C)

Question 17

Total income in the economy can sometimes be greater than total spending.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1 
-Refer to Table 6.1. The value of government spending in billions of dollars is

Accepted Answer

A)   100.
B)   200.
C)   300.
D)   500.E) B) and C)
F) A) and C)

Question 19

Disposable personal income is personal income minus personal taxes.

Accepted Answer

A) True 
 B)False

Question 20

By not counting the value of intermediate goods when calculating GDP, you avoid

Accepted Answer

A)   deficit spending.
B)   double counting.
C)   black-market accounting.
D)   year-to-date calculations.E) B) and C)
F) C) and D)

Exam 6: Measuring National Output and National Income

Gross national income (GNI) is GDP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation.

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Refer to the information provided in Table 6.6 below to answer the questions that follow. Table 6.6 -Refer to Table 6.6. The value for gross domestic product in billions of dollars is

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Production in the illegal or underground economy is not reflected in GDP.

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Disposable personal income is personal income minus personal taxes.

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Refer to the information provided in Table 6.4 below to answer the questions that follow. Table 6.4 -Refer to Table 6.4. The value for GNP in billions of dollars is

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By not counting the value of intermediate goods when calculating GDP, you avoid

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Refer to the information provided in Table 6.1 below to answer the questions that follow. Table 6.1 -Refer to Table 6.1. The value of gross domestic product in billions of dollars is

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Suppose that net investment in 2016 was $90 billion and depreciation was $27 billion. Gross investment in 2016 was

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If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals

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Gross investment minus depreciation equals

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If national income is $400 billion, personal income is $350 billion, personal taxes are $100 billion, then disposable income equals

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Which of the following would not be counted in 2016's GDP?

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Refer to the information provided in Table 6.1 below to answer the questions that follow. Table 6.1 -Refer to Table 6.1. The value of government spending in billions of dollars is

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If the GDP deflator is less than 100, then

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When GDP is measured in "current prices" it is known as the

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In 2016 final sales equal $500 billion and the change in business inventories is -$40 billion. GDP in 2016 is

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GDP generally reflects the production of social ills such as pollution.

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Total income in the economy can sometimes be greater than total spending.

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If net investment is positive, then

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Refer to the information provided in Table 6.9 below to answer the questions that follow. Table 6.9 -Refer to Table 6.9. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 3 is

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