Question 1

Purchasing power parity exists when domestic currency

Accepted Answer

A)  maintains a fixed exchange rate with a foreign currency.
B)  is not convertible to a foreign currency.
C)  buys more goods at home than abroad.
D)  buys as many goods abroad as at home.E) A) and D)
F) C) and D)

Question 2

A consumer good that has a life span of more than three years is a(n)

Accepted Answer

A)  durable consumer good.
B)  nondurable consumer good.
C)  service.
D)  investment.E) None of the above
F) A) and B)

Question 3

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

Accepted Answer

A)  a family sells its home because of a transfer.
B)  a farmer buys a used tractor.
C)  inventories of new cars accumulate on the lots of car dealers.
D)  government increases spending on infrastructure.E) All of the above
F) C) and D)

Question 4

Why aren't financial transactions,sales of secondhand goods,and household production included in measuring GDP?

Accepted Answer

Financial transactions do not involve th...

Question 5

A consumer good that is used up within three years is a(n)

Accepted Answer

A)  durable consumer good.
B)  nondurable consumer good.
C)  service.
D)  investment.E) C) and D)
F) A) and B)

Question 6

-Refer to the above figure.Which arrows represent items that are measured in dollar terms?

Accepted Answer

A)  Arrows A and B
B)  Arrows C and D
C)  Arrows A and D
D)  Arrows B and CE) A) and B)
F) A) and C)

Question 7

If you take national income and add transfer payments,then subtract income earned but not received,the result will be

Accepted Answer

A)  net national product.
B)  disposable personal income.
C)  personal income.
D)  wages.E) A) and B)
F) B) and D)

Question 8

Mental or physical labor or help purchased by consumers is a(n)

Accepted Answer

A)  durable consumer good.
B)  nondurable consumer good.
C)  service.
D)  investment.E) B) and C)
F) C) and D)

Question 9

Which of the following represents how real GDP is calculated?

Accepted Answer

A)  nominal GDP multiplied by the GDP deflator
B)  nominal GDP divided by the population
C)  nominal GDP divided by the PPI,the producer price index
D)  nominal GDP divided by the GDP deflatorE) B) and C)
F) A) and D)

Question 10

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then Gross Domestic Product (GDP) is

Accepted Answer

A)  $25 greater than NDP.
B)  $20 greater than NDP.
C)  $50 greater than NDP.
D)  the same as NDP.E) All of the above
F) A) and D)

Question 11

The two sectors of the economy in the simple circular flow model are

Accepted Answer

A)  the employed and the unemployed.
B)  foreign markets and domestic markets.
C)  households and businesses.
D)  the private sector and the public sector.E) B) and D)
F) B) and C)

Question 12

Income earned by the factors of production is called

Accepted Answer

A)  gross domestic income.
B)  disposable personal income.
C)  personal income.
D)  national income.E) A) and D)
F) A) and C)

Question 13

Which of the following is a significant weakness of GDP as a measure of the nation's economic performance?

Accepted Answer

A)  GDP excludes the secondhand good market because it is impossible to obtain an estimate of the amount sold.
B)  GDP excludes the value of the buying and selling of securities.
C)  GDP considers product and factor markets but not services.
D)  GDP excludes nonmarket production,such as black market activities.E) None of the above
F) All of the above

Question 14

Total income is defined as

Accepted Answer

A)  the total receipts of firms before taxes.
B)  the total amount earned by all resource owners.
C)  the sum of the total receipts of firms and the amount earned by households.
D)  the sum of the total receipts of firms less the amount of tax that must be paid.E) All of the above
F) A) and D)

Question 15

Excluding indirect business taxes and depreciation,Gross Domestic Income (GDI)

Accepted Answer

A)  is the sum of all income paid to the factors of production.
B)  never equals GDP.
C)  would equal GDP if there was no depreciation.
D)  cannot be computed.E) None of the above
F) B) and C)

Question 16

Which of the following is NOT a final good or service?

Accepted Answer

A)  an automobile
B)  bread
C)  flour
D)  a cookieE) A) and B)
F) B) and C)

Exam 8: Measuring the Economys Performance

Income earned by the factors of production is called

Correct Answer
verified

-Refer to the above figure.Which arrows represent items that are measured in dollar terms?

Correct Answer
verified

Total income is defined as

Correct Answer
verified

If you take national income and add transfer payments,then subtract income earned but not received,the result will be

Correct Answer
verified

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then Gross Domestic Product (GDP) is

Correct Answer
verified

Which of the following is NOT a final good or service?

Correct Answer
verified

A consumer good that is used up within three years is a(n)

Correct Answer
verified

A consumer good that has a life span of more than three years is a(n)

Correct Answer
verified

Why aren't financial transactions,sales of secondhand goods,and household production included in measuring GDP?

Correct Answer
verified
Financial transactions do not involve th...
View Answer

Purchasing power parity exists when domestic currency

Correct Answer
verified

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

Correct Answer
verified

Which of the following is a significant weakness of GDP as a measure of the nation's economic performance?

Correct Answer
verified

The two sectors of the economy in the simple circular flow model are

Correct Answer
verified

Excluding indirect business taxes and depreciation,Gross Domestic Income (GDI)

Correct Answer
verified

Mental or physical labor or help purchased by consumers is a(n)

Correct Answer
verified

Which of the following represents how real GDP is calculated?

Correct Answer
verified

Exam 8: Measuring the Economys Performance

Income earned by the factors of production is called

Correct AnswerverifiedShow Answer

-Refer to the above figure.Which arrows represent items that are measured in dollar terms?

Correct AnswerverifiedShow Answer

Total income is defined as

Correct AnswerverifiedShow Answer

If you take national income and add transfer payments,then subtract income earned but not received,the result will be

Correct AnswerverifiedShow Answer

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then Gross Domestic Product (GDP) is

Correct AnswerverifiedShow Answer

Which of the following is NOT a final good or service?

Correct AnswerverifiedShow Answer

A consumer good that is used up within three years is a(n)

Correct AnswerverifiedShow Answer

A consumer good that has a life span of more than three years is a(n)

Correct AnswerverifiedShow Answer

Why aren't financial transactions,sales of secondhand goods,and household production included in measuring GDP?

Correct AnswerverifiedFinancial transactions do not involve th...View AnswerShow Answer

Purchasing power parity exists when domestic currency

Correct AnswerverifiedShow Answer

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

Correct AnswerverifiedShow Answer

Which of the following is a significant weakness of GDP as a measure of the nation's economic performance?

Correct AnswerverifiedShow Answer

The two sectors of the economy in the simple circular flow model are

Correct AnswerverifiedShow Answer

Excluding indirect business taxes and depreciation,Gross Domestic Income (GDI)

Correct AnswerverifiedShow Answer

Mental or physical labor or help purchased by consumers is a(n)

Correct AnswerverifiedShow Answer

Which of the following represents how real GDP is calculated?

Correct AnswerverifiedShow Answer

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Financial transactions do not involve th...
View Answer

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