Question 1

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Accepted Answer

A)  exactly one-third as much to GDP as does a dress.
B)  more than one-third as much to GDP as does a dress.
C)  less than one-third as much to GDP as does a dress.
D)  exactly one-fourth as much to GDP as does a dress.

Question 2

The income that households and noncorporate businesses receive is called

Accepted Answer

A)  personal income.
B)  net national product.
C)  disposable personal income.
D)  national income.

Question 3

Table 23-7
The table below contains data for the country of Togogo. The base year is 1974. 
-Refer to Table 23-7. From 1976 to 1977,

Accepted Answer

A)  inflation was 33.3% and output grew at a rate of 20%.
B)  inflation was 33.3% and output grew at a rate of 60%.
C)  inflation was 50% and output grew at a rate of 20%.
D)  inflation was 50% and output grew at a rate of 60%.

Question 4

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

A)  consumption of durable goods
B)  consumption of nondurable goods
C)  consumption of services
D)  investment

Question 5

Unemployment compensation is

Accepted Answer

A)  part of GDP because it represents income.
B)  part of GDP because the recipients must have worked in the past to qualify.
C)  not part of GDP because it is a transfer payment.
D)  not part of GDP because the payments reduce business profits.

Question 6

GDP is defined as the

Accepted Answer

A)  value of all goods and services produced within a country in a given period of time.
B)  value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
C)  value of all final goods and services produced within a country in a given period of time.
D)  value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

Question 7

​Leo works in a Mercedes Benz factory in Alabama. He is then transferred to Mercedes's plant in South Africa. When does the value of Leo's work for Mercedes contribute to U.S. GDP?

Accepted Answer

A)  The value of his work does not contribute to U.S. GDP, since Mercedes Benz is a German company.
B)  ​The value of his work always contributes to U.S. GDP because Leo is a U.S. citizen.
C)  ​The value of his work contributes to U.S. GDP when he works in the Alabama plant.
D)  ​The value of his work contributes to U.S. GDP only for Mercedes Benz vehicles sold in the U.S. market.

Question 8

Which of the following is always measured in prices from a base-year?

Accepted Answer

A)  both nominal and real GDP.
B)  nominal but not real GDP.
C)  real but not nominal GDP.
D)  neither nominal nor real GDP.

Question 9

In the actual economy, goods and services are purchased by

Accepted Answer

A)  households, but not firms or the government.
B)  households and firms, but not the government.
C)  households and the government, but not firms.
D)  households, firms, and the government.

Question 10

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Accepted Answer

A) True 
 B)False

Question 11

If total spending rises from one year to the next, then which of the following could not be true?

Accepted Answer

A)  the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices.
B)  the economy is producing a larger output of goods and services, and goods and services are selling at lower prices.
C)  the economy is producing a larger output of goods and services, and goods and services are selling at higher prices.
D)  the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.

Question 12

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

Accepted Answer

A)  U.S. investment and GDP increase, but German GDP is unaffected.
B)  U.S. investment and German GDP increase, but U.S. GDP is unaffected.
C)  U.S. investment, U.S. GDP, and German GDP are unaffected because tractors are intermediate goods.
D)  U.S. investment, U.S. GDP, and German GDP all increase.

Question 13

A form of government spending that is not made in exchange for a currently produced good or service is called

Accepted Answer

A)  a transfer payment.
B)  consumption.
C)  investment.
D)  None of the above is correct.

Question 14

List the four components of GDP.

Accepted Answer

consumption, investm...

Question 15

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Accepted Answer

A)  the amount she paid to buy the new parts
B)  the amount she paid to buy new parts and gasoline
C)  the amount she paid to buy new parts, gasoline, and oil.
D)  the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.

Question 16

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Accepted Answer

A) True 
 B)False

Question 17

In 2015, the level of U.S. real GDP was more than four times its 1965 level.

Accepted Answer

A) True 
 B)False

Question 18

Gasoline is considered a final good if it is sold by a

Accepted Answer

A)  gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles.
B)  pipeline operator to a gasoline station in San Francisco.
C)  gasoline station to a motorist in Los Angeles.
D)  All of the above are correct.

Question 19

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

Accepted Answer

A)  The federal government pays the salary of a Navy officer.
B)  The state of Nevada pays a private firm to repair a Nevada state highway.
C)  The city of Las Vegas, Nevada pays a private firm to collect garbage in that city.
D)  All of the above are correct.

Question 20

​When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nation S Income

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

Correct AnswerverifiedShow Answer

U.S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing services.

Correct AnswerverifiedShow Answer

Household spending on education is counted in which component or subcomponent of GDP?

Correct AnswerverifiedShow Answer

Gasoline is considered a final good if it is sold by a

Correct AnswerverifiedShow Answer

​Leo works in a Mercedes Benz factory in Alabama. He is then transferred to Mercedes's plant in South Africa. When does the value of Leo's work for Mercedes contribute to U.S. GDP?

Correct AnswerverifiedShow Answer

GDP is defined as the

Correct AnswerverifiedShow Answer

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

Correct AnswerverifiedShow Answer

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

Correct AnswerverifiedShow Answer

The term real GDP refers to a country's actual GDP as opposed to its estimated GDP.

Correct AnswerverifiedShow Answer

Which of the following is always measured in prices from a base-year?

Correct AnswerverifiedShow Answer

If the price of a dress is three times the price of a pair of shoes, then a pair of shoes contributes

Correct AnswerverifiedShow Answer

The income that households and noncorporate businesses receive is called

Correct AnswerverifiedShow Answer

Unemployment compensation is

Correct AnswerverifiedShow Answer

A form of government spending that is not made in exchange for a currently produced good or service is called

Correct AnswerverifiedShow Answer

If total spending rises from one year to the next, then which of the following could not be true?

Correct AnswerverifiedShow Answer

In 2015, the level of U.S. real GDP was more than four times its 1965 level.

Correct AnswerverifiedShow Answer

​When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

Correct AnswerverifiedShow Answer

List the four components of GDP.

Correct Answerverifiedconsumption, investm...View AnswerShow Answer

Table 23-7 The table below contains data for the country of Togogo. The base year is 1974. -Refer to Table 23-7. From 1976 to 1977,

Correct AnswerverifiedShow Answer

In the actual economy, goods and services are purchased by

Correct AnswerverifiedShow Answer

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Leo works in a Mercedes Benz factory in Alabama. He is then transferred to Mercedes's plant in South Africa. When does the value of Leo's work for Mercedes contribute to U.S. GDP?

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When the U.S. government purchases capital equipment, such as a computer, these expenditures are part of investment in GDP.

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consumption, investm...
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