Question 1

The sum of all the money people spend buying final goods and services-omitting spending on intermediate goods, so as not to double-count-equals:

Accepted Answer

A)   the market value of all output sold in the economy.
B)   the gross domestic product of the economy.
C)   total expenditure in the economy.
D)   All of these are true.E) B) and D)
F) None of the above

Question 2

If a country's real GDP increases from one year to the next, we can conclude the country experienced:

Accepted Answer

A)   inflation and no change in output.
B)   an increase in output and no change in prices.
C)   a definite increase in output, and may have experienced an increase in prices.
D)   definite inflation, and may have experienced an increase in output.E) A) and B)
F) B) and C)

Question 3

One way to estimate GDP is to:

Accepted Answer

A)   measure the total expenditure of an economy.
B)   add up the value of final and intermediate goods and services sold in a given year.
C)   add together the market value of final services sold in the economy.
D)   add together the market value of final goods sold in the economy, but not services.E) All of the above
F) C) and D)

Question 4

According to annual price deflator information (https://fred.stlouisfed.org)  from the table shown, what was the rate of inflation (rounded to the nearest percent)  from 2012 to 2013?

Accepted Answer

A)   3 percent
B)   4 percent
C)   2 percent
D)   1 percentE) All of the above
F) B) and C)

Question 5

Which of the following might be sold in the underground economy?

Accepted Answer

A)   Lawn-mowing services
B)   Endangered animals
C)   Babysitting services
D)   All of these could be sold in the underground economy.E) B) and D)
F) None of the above

Question 6

If U.S. real GDP grew from $12 trillion one year to $12.7 trillion the next year, the annual growth rate would be:

Accepted Answer

A)   5.8 percent.
B)   0.7 percent.
C)   7 percent.
D)   5.5 percent.E) B) and D)
F) A) and C)

Question 7

If imports are $4 trillion and net exports are $4 trillion, what must be the value of exports?

Accepted Answer

A)   $0 trillion
B)   $8 trillion
C)   $4 trillion
D)   $2 trillionE) B) and C)
F) A) and D)

Question 8

The goods and services that count toward GDP are defined in terms of:

Accepted Answer

A)   the location of production, not the citizenship of the producer.
B)   the citizenship of the producer, not the location of production.
C)   citizens producing within a country's borders.
D)   the total production of companies owned by citizens, regardless of the actual location of production.E) A) and D)
F) All of the above

Question 9

Amin wins a $1,500 scholarship from the company he interns at during the summer months. Amin decides to spend the scholarship money on an Apple MacBook for his schoolwork. How will GDP be affected by this scenario?

Accepted Answer

A)   Consumption will increase by $1,500.
B)   Investment will increase by $1,500.
C)   GDP will not be affected because Amin acquired the computer with scholarship money.
D)   GDP will decrease by $1,500 because an Apple MacBook is an import to the United States.E) B) and C)
F) A) and C)

Question 10

At the end of the year, 2,500 Ford Explorers are waiting to be delivered to dealerships. How is this overproduction accounted for in this year's GDP?

Accepted Answer

A)   The cars are inventory, and their value will increase investment.
B)   The cars are durable goods, and their value will increase consumption.
C)   The cars are not counted toward this year's GDP; they will count toward next year's GDP when they are sold.
D)   The cars are unsold inventory and they reduce the value of investment.E) B) and C)
F) A) and D)

Question 11

The size of the underground economy is likely large when:

Accepted Answer

A)   the cost of doing business legally is low.
B)   bureaucratic red tape makes it difficult to legally start a new business.
C)   taxes are low.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 12

What are U.S. exports?

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 foreignersE) None of the above
F) B) and C)

Question 13

GDP counts:

Accepted Answer

A)   only final goods and services.
B)   only intermediate goods and services.
C)   both intermediate and final goods and services.
D)   the value of goods produced abroad.E) None of the above
F) A) and B)

Question 14

In a country open to trade, imports count as _______ while exports are _______.

Accepted Answer

A)   income; expenditure
B)   expenditure; rental income
C)   rental income; expenditure
D)   expenditure; incomeE) A) and B)
F) None of the above

Question 15

Which of the following is an example of a good that would not count toward U.S. GDP?

Accepted Answer

A)   A car made by Toyota in Tennessee
B)   A car made by Ford in Michigan
C)   Sneakers made by Nike in Indonesia
D)   Sneakers made by New Balance in OhioE) B) and D)
F) None of the above

Question 16

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

Accepted Answer

A)   U.S. GDP, because Sally's a U.S. citizen.
B)   U.S. GDP, because she's working in the United States.
C)   Italy's GDP, because she's working for an Italian firm.
D)   both U.S. and Italy's GDP.E) A) and D)
F) A) and C)

Question 17

Assume the table shown displays the total output and prices of the only two goods produced in a small economy.  Looking at the changes in real GDP and nominal GDP from 2017 to 2018, because real and nominal GDP increased at the same rate, we can conclude that:

Accepted Answer

A)   there was no change in prices, only output.
B)   prices increased
C)   only the production of footballs increased.
D)   there was no change in output, only prices.E) A) and D)
F) B) and C)

Question 18

U.S. gross domestic product (GDP)  includes goods produced by:

Accepted Answer

A)   foreign firms on U.S. soil.
B)   U.S. firms on foreign soil.
C)   foreign firms on foreign soil.
D)   None of these are included in U.S. GDP.E) All of the above
F) B) and C)

Question 19

Assume the table shown displays the total output and prices of the only two goods produced in a small economy.  What is the value of the GDP deflator in 2020 (rounded to the nearest whole number) ?

Accepted Answer

A)   135
B)   74
C)   109
D)   105E) A) and B)
F) C) and D)

Question 20

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

Accepted Answer

A)   The gallon of milk Jeremy bought to use in his breakfast cereal
B)   The notebook Himeko bought to take notes in for her college courses
C)   The cheese on the pizza that Teka ordered from Domino's
D)   The guacamole Aisha purchased for a Superbowl partyE) A) and B)
F) B) and C)

Exam 7: Measuringgdp

What are U.S. exports?

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GDP counts:

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U.S. gross domestic product (GDP) includes goods produced by:

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If imports are $4 trillion and net exports are $4 trillion, what must be the value of exports?

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Amin wins a $1,500 scholarship from the company he interns at during the summer months. Amin decides to spend the scholarship money on an Apple MacBook for his schoolwork. How will GDP be affected by this scenario?

Correct AnswerverifiedShow Answer

Which of the following might be sold in the underground economy?

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In a country open to trade, imports count as _______ while exports are _______.

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Which of the following is an example of a good that would not count toward U.S. GDP?

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

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At the end of the year, 2,500 Ford Explorers are waiting to be delivered to dealerships. How is this overproduction accounted for in this year's GDP?

Correct AnswerverifiedShow Answer

If a country's real GDP increases from one year to the next, we can conclude the country experienced:

Correct AnswerverifiedShow Answer

The size of the underground economy is likely large when:

Correct AnswerverifiedShow Answer

The sum of all the money people spend buying final goods and services-omitting spending on intermediate goods, so as not to double-count-equals:

Correct AnswerverifiedShow Answer

One way to estimate GDP is to:

Correct AnswerverifiedShow Answer

Assume the table shown displays the total output and prices of the only two goods produced in a small economy. What is the value of the GDP deflator in 2020 (rounded to the nearest whole number) ?

Correct AnswerverifiedShow Answer

If U.S. real GDP grew from $12 trillion one year to $12.7 trillion the next year, the annual growth rate would be:

Correct AnswerverifiedShow Answer

The goods and services that count toward GDP are defined in terms of:

Correct AnswerverifiedShow Answer

According to annual price deflator information (https://fred.stlouisfed.org) from the table shown, what was the rate of inflation (rounded to the nearest percent) from 2012 to 2013?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume the table shown displays the total output and prices of the only two goods produced in a small economy. Looking at the changes in real GDP and nominal GDP from 2017 to 2018, because real and nominal GDP increased at the same rate, we can conclude that:

Correct AnswerverifiedShow Answer

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In a country open to trade, imports count as _ while exports are _.

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