EC-001

Honda is a Japanese firm that produces some of its cars in Ohio. In calculating GDP, the Ohio-produced cars would be part of a. double counting b. GDP for Japan c. the underground economy d. GDP for the U.S.

GDP for the U.S.

The final total value of all goods and services produced within a countries geographic foundries during a years time is called a. private domestic investment b. net national product c. personal consumption expenditures d. gross domestic product

Gross domestic product

Susan's father receives veteran's benefits, and her grandmother gets Social Security. Are these payments counted in GDP? a. Yes, these are government purchases b. No, these are transfer payments c. No, the recipients produce goods and services d. Yes, these funds are for personal consumption

No, these are transfer payments

George agreed to paint Joe's car for him and asked to be paid in cash so that there would be no record of the transaction. The money George earned is part of a. non-residential investment b. uncounted production c. transfer payments d. the underground economy

The underground economy

which of the following transactions would be counted in the GDP: a. A florist purchases plants from a nursery b. A bakery purchases 50 pounds of sugar c. A restaurant purchases meat from a wholesaler d. A customer purchases a sweater

a customer purchases a sweater

How can economists account for differences in prices and currency between countries? a. use the price deflator b. adjust for purchasing power c. only compare GDP data within a country rather than between countries d. avoid counting intermediate products

adjust for purchasing power

GDP figures for the U.S. include the value of a. transfer payments b. all production for which money is exchanged and receipts are kept c. goods that are not sold in the marketplace d. transactions for which on receipts are kept

all production for which money is exchanged and receipts are kept

Governments try to improve the economy during an economic slump by increasing the a. amount of money in circulation b. taxes consumers pay c. prime interest rate d. prices producers charge customers

amount of money is circulation

One of the benefits of economic growth is that government a. will have fewer problems to solve b. can ensure workers of finding jobs c. will not need to find trading partners d. can carry out its activities more easily

can carry out its activities more easily

One of the reasons that countries measure GDP is to a. calculate the distribution of wealth within their nations b. investigate the types of goods and services they produce c. determine the quality of the goods and services they produce d. compare their findings to other countries around the world

compare their findings to other countries around the world

A country's gross domestic product is expressed in a. dollars b. percentages c. the number of items produced d. the number of transfer payments

dollars

the goods and services sold during a year to foreign buyers are a country's a. gross private investments b. exports c. imports d. personal consumption expenditures

exports

Which of the following would provide you with information about the health of the U.S. economy? a. population data b. medium of exchange c. economic order quantity d. gross domestic product

gross domestic product

Mr. Barnes has bought several rental properties. The money Mr. Barnes spent to buy these buildings would be included in which category of GDP? a. net exports of goods and services b. gross private domestic investment c. personal consumption expenditures d. government purchases of goods and services

gross private domestic investment

What category of goods and services that make up GDP includes the money businesses invest in buildings, equipment, vehicles, and furniture? a. gross private domestic investment b. net exports of goods and services c. government purchases of goods and services d. personal consumption expenditures

gross private domestic investment

In the calculation of GDP, which of the following g components is subtracted: a. gross private investments b. exports c. government purchases d. imports

imports

A country's net exports are a negative figure in GDP calculations whenever a. business inventories decrease b. imports are greater than exports c. uncounted production declines d. there is a trade surplus

imports are greater than exports

Which of the following is likely to increase GDP: a. improved technology b. improved working conditions c. reduced productivity d. lower prices

improved technology

If each citizen in the US increased the amount s/he spent on US consumer goods, the GDP would probably a. decrease b. stay the same c. increase d. not be affected

increase

One of the factors used in calculation of the GDP is personal consumption expenditures, which are purchases made by a. individuals b. businesses c. government agencies d. foreign nations

individuals

In calculating GDP, economists try to avoid double countering because it would a. cause legal problems b. inflate the value of GDP c. lower the standard of living d. increase the price of products

inflate the value of GDP

This year's nominal GDP is higher than last year's even though production did not increase. The higher GDP figure is the result of a. a trade deficit b. inflation c. increased imports d. unemployment

inflation

Jerry bought a new bicycle with special tires. In economic terms, the tires on this bike are considered a. intermediate products b. capital goods c. uncounted production d. accessory items

intermediate products

Which of the following is a shortcoming of GDP as an economic indicator: a. it does not provide meaningful information about a country's contributions to society b. it does not include purchases of durable goods by individuals c. it is not a comprehensive measure of a country's economic output d. it does not measure the final market value of all goods and services

it does not provide meaningful information about a country's contributions to society

How does double counting affect the GDP? a. it causes trade surpluses, which help the GDP b. it causes economic declines, which hurt the GDP c. decreases the GDP d. inflates the GDP

it inflates the GDP

What category of GDP would include the money Kathy's family pays to the state university for her college tuition? a. personal consumption expenditures b. government purchases of goods and services c. net exports of goods and services d. gross private domestic investment

personal consumption expenditures

When the economy is in a recession, most businesses respond by a. reducing production b. increasing wages c. hurting more workers d. planning to expand

reducing production

Inflation can occur when the economy is growing too fast. One of the ways the government might respond is by a. spending less on goods and services b. making tax cuts c. lowering the prime interest rate d. decreasing the discount rate for banks

spending less on goods and services

when our nation enjoys economic growth, what usually happens to domestic economic problems? a. they are made worse b. they are solved completely c. they are not affected d. they are more easily resolved

they are more easily resolved

As a favor, Felicia agreed to clean the house for her mother each week. In terms of GDP, the work Felicia does would be part of a. residential investment b. the underground economy c. total output d. uncounted production

uncounted production