Question 1

An economy produces 5X, 10Y, and 20Z in a year. Base-year prices for these goods are $1, $3, and $5, respectively. Current-year prices for these goods are $2, $3, and $4, respectively. What is Real GDP?

Accepted Answer

A)  $135
B)  $165
C)  $120
D)  $170
E)  none of the aboveF) A) and D)
G) B) and C)

Question 2

In 1950, the country with the highest per-capita GDP was

Accepted Answer

A)  Switzerland.
B)  New Zealand.
C)  the United States.
D)  Venezuela.
E)  the Netherlands.F) A) and C)
G) C) and E)

Question 3

Exhibit 7-2
 
-Refer to Exhibit 7-2. Assuming that 1990 is the base year, Real GDP in 2019 is

Accepted Answer

A)  $49.
B)  $51.
C)  $86.
D)  $92.
E)  not possible to calculate without the CPI.F) B) and D)
G) A) and B)

Question 4

To macroeconomists, investment is mainly the purchases of goods and services

Accepted Answer

A)  by businesses.
B)  to hold as wealth, such as gold coins or art.
C)  to hold as wealth, such as stocks and bonds.
D)  by the government.
E)  ​b and cF) All of the above
G) B) and C)

Question 5

If a business firm in Country A produces a good but does not sell it in that same year, that good will not be counted in Country A's GDP.

Accepted Answer

A) True 
 B)False

Question 6

The largest component of national income in the United States is

Accepted Answer

A)  rental income.
B)  proprietors' income.
C)  compensation of employees.
D)  corporate profits.
E)  net interest.F) A) and E)
G) None of the above

Question 7

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car
B)  a headlight bulb purchased by Ford Motor Co.from a supplier
C)  a headlight bulb produced but not sold this year and thus ending up as inventory
D)  none of the above, i.e., all would be includedE) A) and C)
F) C) and D)

Question 8

Which of the following is the correct equation for computing personal income?

Accepted Answer

A)  Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments.
B)  Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments
C)  Personal income = National income - taxes
D)  Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments
E)  none of the aboveF) A) and D)
G) B) and D)

Question 9

Which of the following items is a final good?

Accepted Answer

A)  mustard in a deli
B)  tin purchased by a tin can company
C)  a sweater purchased by someone in a department store
D)  a and b
E)  a, b, and cF) A) and B)
G) C) and D)

Question 10

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations. Explain why these transactions are not included in GDP and give an example of each to help support your answer.

Accepted Answer

Certain nonmarket goods and services are...

Question 11

If Real GDP was $9,542 billion in year 2 and it had been $9,300 billion in year 1, what was the approximate economic growth rate during this time period?

Accepted Answer

A)  9.7 percent
B)  2.4 percent
C)  3.5 percent
D)  2.6 percentE) None of the above
F) A) and B)

Question 12

Real GDP is always measured in

Accepted Answer

A)  cheaper dollars.
B)  quality of goods produced.
C)  base-year dollars.
D)  nominal dollars.
E)  current dollars.F) B) and C)
G) B) and E)

Question 13

Exhibit 7-3
 
-Refer to Exhibit 7-3. Consumption is equal to

Accepted Answer

A)  $3,700.
B)  $9,000.
C)  $10,150.
D)  $8,200.
E)  $9,700.F) A) and E)
G) All of the above

Question 14

The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

Accepted Answer

A) True 
 B)False

Question 15

An example of income earned but not received is

Accepted Answer

A)  welfare payments.
B)  Social Security payments.
C)  undistributed profits.
D)  a and b
E)  a, b, and cF) A) and B)
G) A) and E)

Question 16

With respect to the business cycle, describe the difference between the expansion phase and the recovery phase.

Accepted Answer

The recovery phase is the period when Re...

Question 17

Depreciation refers to a decrease in the value of a good caused by

Accepted Answer

A)  an increase in the price level.
B)  a decrease in the price level.
C)  "wear and tear" of capital goods over time.
D)  the depreciation allowance.
E)  a decrease in purchasing power.F) B) and C)
G) B) and D)

Question 18

Look at the following data: consumption = $715 billion; exports = $50 billion; imports = $83 billion; inventory investment = $125 billion; fixed investment = $400 billion; government purchases = $300 billion. GDP is equal to

Accepted Answer

A)  $1,673 billion.
B)  $1,466 billion.
C)  $1,911 billion.
D)  $1,507 billion.
E)  none of the aboveF) C) and D)
G) All of the above

Question 19

Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesirable in terms of promoting the economic health and strength of the economy.

Accepted Answer

Investment can rise as a result of: (1) ...

Question 20

Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion. In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion. Which of the following statements is true?

Accepted Answer

A)  Per-capita GDP is necessarily higher in year 2 than year 1.
B)  People are "better off" in year 2 than in year 1 because there are more goods and services in year 2 than year 1.
C)  Government transfer payments were higher in year 2 than in year 1.
D)  a and b
E)  none of the aboveF) All of the above
G) B) and C)

Exam 7: Macroeconomic Measurements Part II Gdp and Real Gdp

If Real GDP was $9,542 billion in year 2 and it had been $9,300 billion in year 1, what was the approximate economic growth rate during this time period?

Correct AnswerverifiedShow Answer

In 1950, the country with the highest per-capita GDP was

Correct AnswerverifiedShow Answer

To macroeconomists, investment is mainly the purchases of goods and services

Correct AnswerverifiedShow Answer

Which of the following is the correct equation for computing personal income?

Correct AnswerverifiedShow Answer

The largest component of national income in the United States is

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Look at the following data: consumption = $715 billion; exports = $50 billion; imports = $83 billion; inventory investment = $125 billion; fixed investment = $400 billion; government purchases = $300 billion. GDP is equal to

Correct AnswerverifiedShow Answer

If a business firm in Country A produces a good but does not sell it in that same year, that good will not be counted in Country A's GDP.

Correct AnswerverifiedShow Answer

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations. Explain why these transactions are not included in GDP and give an example of each to help support your answer.

Correct AnswerverifiedCertain nonmarket goods and services are...View AnswerShow Answer

Which of the following would not be included in the calculation of this year's GDP?

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Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion. In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion. Which of the following statements is true?

Correct AnswerverifiedShow Answer

An example of income earned but not received is

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The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

Correct AnswerverifiedShow Answer

Real GDP is always measured in

Correct AnswerverifiedShow Answer

Exhibit 7-2 -Refer to Exhibit 7-2. Assuming that 1990 is the base year, Real GDP in 2019 is

Correct AnswerverifiedShow Answer

With respect to the business cycle, describe the difference between the expansion phase and the recovery phase.

Correct AnswerverifiedThe recovery phase is the period when Re...View AnswerShow Answer

An economy produces 5X, 10Y, and 20Z in a year. Base-year prices for these goods are $1, $3, and $5, respectively. Current-year prices for these goods are $2, $3, and $4, respectively. What is Real GDP?

Correct AnswerverifiedShow Answer

Exhibit 7-3 -Refer to Exhibit 7-3. Consumption is equal to

Correct AnswerverifiedShow Answer

Which of the following items is a final good?

Correct AnswerverifiedShow Answer

Depreciation refers to a decrease in the value of a good caused by

Correct AnswerverifiedShow Answer

Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesirable in terms of promoting the economic health and strength of the economy.

Correct AnswerverifiedInvestment can rise as a result of: (1) ...View AnswerShow Answer

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Certain nonmarket goods and services are...
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The recovery phase is the period when Re...
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Investment can rise as a result of: (1) ...
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