Question 1

The value-added approach of calculating GDP:

Accepted Answer

A)   is an alternative, and equally valid, way of avoiding the problem of double-counting.
B)   lets us break down the total value paid and see how much of it was created at each step of the production process.
C)   is especially useful when thinking about services involved in the resale of existing goods.
D)   All of these are correct.E) A) and B)
F) A) and C)

Question 2

Which of the following does not appear in GDP as a part of government spending?

Accepted Answer

A)   Clipboards at the Department of Motor Vehicles.
B)   Maintenance of government buildings.
C)   Social Security payments.
D)   City fireworks displays on the Fourth of July.E) A) and B)
F) All of the above

Question 3

U.S. imports are:

Accepted Answer

A)   U.S. goods sold to foreigners.
B)   Foreign goods bought by Americans.
C)   U.S. goods sold to Americans.
D)   Foreign and U.S. goods sold to foreigners, but consumed in the U.S.E) All of the above
F) None of the above

Question 4

The field of macroeconomics studies ______ and microeconomics studies ______.

Accepted Answer

A)   economic aggregates; individual markets
B)   individual markets; economic aggregates
C)   international variables; variables within a single economy
D)   variables within a single economy; international variablesE) A) and D)
F) None of the above

Question 5

GDP per capita:

Accepted Answer

A)   is an average income per person in an economy.
B)   tells us about how the output is allocated in an economy.
C)   tells us about what you can buy with a given amount of money in that country.
D)   All of these statements are true.E) B) and C)
F) B) and D)

Question 6

Jake, Sr. sells the family business, a factory that produces snake oil, to Jake, Jr., for $100, even though the factory has been assessed at $400,000. How will this transaction affect GDP?

Accepted Answer

A)   Investment will increase by $100.
B)   Investment will increase by $400,000.
C)   Consumption will increase by $400,000.
D)   GDP will not be affected by the transaction.E) A) and B)
F) None of the above

Question 7

An example of a good or service that would count in the U.S. GNP would be a bag of coffee made in:

Accepted Answer

A)   Vermont by Green Mountain Coffee Roasters.
B)   Colombia by Dunkin' Donuts.
C)   Canada by Starbucks.
D)   All of these would count in U.S. GNP.E) All of the above
F) B) and D)

Question 8

Macroeconomics works to explain things like:

Accepted Answer

A)   economic growth of Germany.
B)   Microsoft's profit in 2015.
C)   rates of return on an investment.
D)   number of employees in Ford company.E) B) and D)
F) B) and C)

Question 9

The value of net exports is:

Accepted Answer

A)   exports imports.
B)   imports exports.
C)   exports+ imports.
D)   (exports +imports)  tariffs.E) A) and C)
F) B) and D)

Question 10

If total consumption is $5 billion, investments $2 billion, government purchases $1 billion, exports $1 billion, and imports $3 billion, the GDP must equal:

Accepted Answer

A)   $6 billion.
B)   $12 billion.
C)   $9 billion.
D)   $3 billion.E) A) and D)
F) C) and D)

Question 11

Sally is a U.S. citizen who works for an Italian company at the branch office located in Tulsa, Oklahoma. Sally's work will contribute toward:

Accepted Answer

A)   U.S. GDP since Sally's a citizen.
B)   U.S. GDP since the location of her office is in the U.S.
C)   Italian GDP since she's working for an Italian firm.
D)   both the U.S. and Italy's GDP.E) A) and C)
F) A) and B)

Question 12

The Green GDP:

Accepted Answer

A)   tries to capture the environmental effects regular GDP doesn't.
B)   subtracts the environmental costs of production from the positive outputs normally counted in GDP.
C)   values negative externalities.
D)   All of these statements are true.E) A) and B)
F) C) and D)

Question 13

Assume the table has recorded the total output and prices of the only two goods produced. Looking at the changes in real GDP and nominal GDP from 2000 to 2001, we can conclude that because:

Accepted Answer

A)   real and nominal GDP increased at the same rate, there was no change in prices, only output.
B)   nominal GDP rose more than real GDP, both prices and output must have increased.
C)   real GDP rose more than nominal GDP, output must have increased more than prices.
D)   real and nominal GDP increased at the same rate, there was no change in output, only prices.E) B) and C)
F) B) and D)

Question 14

A closed economy refers to an economy in which:

Accepted Answer

A)   all goods are produced and sold domestically.
B)   all goods are consumed domestically.
C)   intermediate goods are sold domestically.
D)   a country exports, but does not allow imports.E) A) and D)
F) B) and C)

Question 15

Clarence is a Japanese citizen working for Toyota at the manufacturing plant located in Tennessee. Clarence's work will contribute toward:

Accepted Answer

A)   U.S. GDP since the location of the plant is in the U.S.
B)   Japan's GDP since he's a Japanese citizen.
C)   Japan's GDP since it's a Japanese firm.
D)   both the U.S. and Japan's GDP.E) All of the above
F) A) and B)

Question 16

Investment, as a part of GDP, includes:

Accepted Answer

A)   stocks.
B)   bonds.
C)   gold.
D)   factories.E) A) and D)
F) A) and C)

Question 17

A consumption good that would NOT be counted in GDP would be:

Accepted Answer

A)   the coffee Cyndi buys on her way to work in the morning.
B)   Cyndi's brand new car.
C)   the sunglasses Cyndi bought on clearance sale yesterday.
D)   Ford company's purchase of steel.E) None of the above
F) C) and D)

Question 18

U.S. GDP increased from $12.5 trillion in 2005 to $14 trillion in 2009. This means that:

Accepted Answer

A)   people in the U.S. produced more goods and services in 2009 than in 2005.
B)   the prices of all goods and services were higher in 2009 than in 2005.
C)   Either of these could be true.
D)   Both of these must be true.E) A) and C)
F) B) and C)

Question 19

If the nominal GDP were to increase, but the real GDP were to increase by less from one year to the next, we could conclude:

Accepted Answer

A)   prices went up, but output stayed the same.
B)   prices stayed the same, but output went up.
C)   both prices and output went up.
D)   both prices and output stayed the same.E) B) and C)
F) A) and D)

Question 20

An example of a final service is:

Accepted Answer

A)   a tire to replace your flat.
B)   a used car.
C)   getting the oil changed in your car.
D)   Tires purchased by Ford to put on their new Explorers.E) A) and B)
F) All of the above

Exam 7: Measuring GDP

If the nominal GDP were to increase, but the real GDP were to increase by less from one year to the next, we could conclude:

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If total consumption is $5 billion, investments $2 billion, government purchases $1 billion, exports $1 billion, and imports $3 billion, the GDP must equal:

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An example of a good or service that would count in the U.S. GNP would be a bag of coffee made in:

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Which of the following does not appear in GDP as a part of government spending?

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The value of net exports is:

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Macroeconomics works to explain things like:

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U.S. imports are:

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U.S. GDP increased from $12.5 trillion in 2005 to $14 trillion in 2009. This means that:

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The Green GDP:

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Assume the table has recorded the total output and prices of the only two goods produced. Looking at the changes in real GDP and nominal GDP from 2000 to 2001, we can conclude that because:

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The value-added approach of calculating GDP:

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Clarence is a Japanese citizen working for Toyota at the manufacturing plant located in Tennessee. Clarence's work will contribute toward:

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A closed economy refers to an economy in which:

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Investment, as a part of GDP, includes:

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GDP per capita:

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Sally is a U.S. citizen who works for an Italian company at the branch office located in Tulsa, Oklahoma. Sally's work will contribute toward:

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A consumption good that would NOT be counted in GDP would be:

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An example of a final service is:

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Jake, Sr. sells the family business, a factory that produces snake oil, to Jake, Jr., for $100, even though the factory has been assessed at $400,000. How will this transaction affect GDP?

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The field of macroeconomics studies ______ and microeconomics studies ______.

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The field of macroeconomics studies and microeconomics studies .

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