Question 1

The drawback to calculating real GDP using base-year prices is that

Accepted Answer

A)  real GDP in one year is not comparable to real GDP in another year.
B)  relative prices change over time and these are not reflected in base-year prices, and this distorts GDP.
C)  relative prices change over time and these changes are reflected in base-year prices.
D)  quality changes are reflected in base-year prices.

Question 2

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Accepted Answer

A)  GDP rises by $1,875.
B)  GDP is not affected by Scott's production of the jewelry box.
C)  GDP rises by $125.
D)  GDP falls by $1,875.

Question 3

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Accepted Answer

Consider the value of an iPhone which co...

Question 4

The output of Mexican citizens who work in Texas would be included in the

Accepted Answer

A)  gross domestic product of Mexico.
B)  gross national product of Mexico.
C)  gross national product of the United States.
D)  net national product of the United States.

Question 5

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from ________ in 2013 to ________ in 2014.

Accepted Answer

A)  105; 115
B)  200; 205
C)  400; 420
D)  375; 390

Question 6

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Accepted Answer

China is not better off because of highe...

Question 7

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi...

Question 8

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Accepted Answer

A)  average hours worked per week increased.
B)  amount of pollution decreased.
C)  price level increased.
D)  crime rate decreased.

Question 9

Table 12-16
  20122013 Nominal GDP $10,000$12,000 Real GDP 9,50010,500\begin{array} { | l | r | r | } \hline & \mathbf { 2 0 1 2 } & { \mathbf { 2 0 1 3 } } \\hline 	ext { Nominal GDP } & \$ 10,000 & \$ 12,000 \\hline 	ext { Real GDP } & 9,500 & 10,500 \\hline\end{array} Nominal GDP  Real GDP ​2012$10,0009,500​2013$12,00010,500​​ 
-Refer to Table 12-16.Given the information above,what can we say has happened in the economy from 2012 to 2013?

Accepted Answer

A)  The price level has fallen.
B)  The price level has risen.
C)  The price level has remained constant.
D)  Not enough information is available to determine what has happened to prices.

Question 10

Real GDP is GDP in a given year

Accepted Answer

A)  adjusted only for anticipated inflation.
B)  adjusted only for unanticipated inflation.
C)  valued in the prices of that year.
D)  valued in the prices of the base year.

Question 11

Nominal GDP will increase

Accepted Answer

A)  only if the price level rises.
B)  only if the price level falls.
C)  only if the quantity of final goods and services produced rises.
D)  if either the price level or the quantity of goods and services produced rises.

Question 12

Legalizing all forms of illegal activities

Accepted Answer

A)  reduces GDP and the size of the underground economy.
B)  reduces GDP and increases the size of the underground economy.
C)  increases GDP and reduces the size of the underground economy.
D)  increases GDP and increases the size of the underground economy.

Question 13

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Accepted Answer

A)  2 percent
B)  8 percent
C)  13 percent
D)  over 50 percent

Question 14

Which of the following is included in both the U.S.GDP and U.S.GNP?

Accepted Answer

A)  the value of all cars produced by General Motors in the United States
B)  the value of all cars produced by Ford in Mexico
C)  the value of all cars produced by Toyota in the United States
D)  the value of all cars produced by Nissan in Japan and the United States

Question 15

The factors of production include

Accepted Answer

A)  wages.
B)  capital.
C)  investment.
D)  transfers.

Question 16

Residential investment includes spending by firms on office buildings.

Accepted Answer

A) True 
 B)False

Question 17

Table 12-13
   Year  Oranges  Produced  Price af  Oranges  Shirts  Prodiced  Price af  Shirts 20091,800$0.90110$30.0020112,0001.0011035.00\begin{array} { | c | c | c | c | c | } \hline 	ext { Year } & \begin{array} { c } 	ext { Oranges } \	ext { Produced }\end{array} & \begin{array} { c } 	ext { Price af } \	ext { Oranges }\end{array} & \begin{array} { c } 	ext { Shirts } \	ext { Prodiced }\end{array} & \begin{array} { c } 	ext { Price af } \	ext { Shirts }\end{array} \\hline 2009 & 1,800 & \$ 0.90 & 110 & \$ 30.00 \\hline 2011 & 2,000 & 1.00 & 110 & 35.00 \\hline\end{array} Year 20092011​ Oranges  Produced ​1,8002,000​ Price af  Oranges ​$0.901.00​ Shirts  Prodiced ​110110​ Price af  Shirts ​$30.0035.00​​  
Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts.
-Refer to Table 12-13.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Accepted Answer

A)  $4,620.
B)  $5,100.
C)  $5,650.
D)  $5,850.

Question 18

If an American firm opens a production facility in India,the total value of the production will be included in the

Accepted Answer

A)  gross domestic product of the United States.
B)  national income of the United States.
C)  gross domestic product of India.
D)  national income of India.

Question 19

Macroeconomics seeks to understand

Accepted Answer

A)  economic growth, business cycles, and inflation.
B)  industry sales, marketing strategies and corporate growth.
C)  product demand, product cost, and profit maximization.
D)  public choices, private choices, and consumer maximization.

Question 20

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

Accepted Answer

A)  the value of the house in 2014
B)  the value of the house in 2003
C)  the value of the house in 2014 minus depreciation
D)  the value of the services of the real estate agent

Exam 12: Gdp: Measuring Total Production and Income

Nominal GDP will increase

Correct Answer
verified

Correct Answer
verified

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Correct Answer
verified
Factors not included in GDP which you mi...
View Answer

Legalizing all forms of illegal activities

Correct Answer
verified

Residential investment includes spending by firms on office buildings.

Correct Answer
verified

The factors of production include

Correct Answer
verified

If an American firm opens a production facility in India,the total value of the production will be included in the

Correct Answer
verified

Which of the following is included in both the U.S.GDP and U.S.GNP?

Correct Answer
verified

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

Correct Answer
verified

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products.For his wife's birthday,he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete.By how much and in what direction does GDP change as a result of his efforts?

Correct Answer
verified

Correct Answer
verified

The output of Mexican citizens who work in Texas would be included in the

Correct Answer
verified

Real GDP is GDP in a given year

Correct Answer
verified

Macroeconomics seeks to understand

Correct Answer
verified

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Correct Answer
verified

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Correct Answer
verified
China is not better off because of highe...
View Answer

The drawback to calculating real GDP using base-year prices is that

Correct Answer
verified

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from in 2013 to in 2014.

Correct Answer
verified

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Correct Answer
verified

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Correct Answer
verified
Consider the value of an iPhone which co...
View Answer

Exam 12: Gdp: Measuring Total Production and Income

Nominal GDP will increase

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

Correct AnswerverifiedFactors not included in GDP which you mi...View AnswerShow Answer

Legalizing all forms of illegal activities

Correct AnswerverifiedShow Answer

Residential investment includes spending by firms on office buildings.

Correct AnswerverifiedShow Answer

The factors of production include

Correct AnswerverifiedShow Answer

If an American firm opens a production facility in India,the total value of the production will be included in the

Correct AnswerverifiedShow Answer

Which of the following is included in both the U.S.GDP and U.S.GNP?

Correct AnswerverifiedShow Answer

Suppose in 2014,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2014?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The output of Mexican citizens who work in Texas would be included in the

Correct AnswerverifiedShow Answer

Real GDP is GDP in a given year

Correct AnswerverifiedShow Answer

Macroeconomics seeks to understand

Correct AnswerverifiedShow Answer

Increases in real GDP would overstate the increase in the well-being of a country over time if,over that time period,the

Correct AnswerverifiedShow Answer

China's current rate of GDP growth is quite rapid.Its current growth rate is probably three times that of the United States.However,the levels of pollution are much higher in China.Would you consider China to be better off than the United States given this information? Why or why not?

Correct AnswerverifiedChina is not better off because of highe...View AnswerShow Answer

The drawback to calculating real GDP using base-year prices is that

Correct AnswerverifiedShow Answer

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from ________ in 2013 to ________ in 2014.

Correct AnswerverifiedShow Answer

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

Correct AnswerverifiedShow Answer

Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone.

Correct AnswerverifiedConsider the value of an iPhone which co...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Factors not included in GDP which you mi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
China is not better off because of highe...
View Answer

Correct Answer
verified

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from in 2013 to in 2014.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Consider the value of an iPhone which co...
View Answer