Macro Economics Chapter 10

Refer to Table 23-10. What was this country's real GDP in 2016?

$10,950

Refer to Table 23-3. What were Crete's government purchases in 2010?

$1130

Refer to Table 23-2. What were country A's imports in 2010?

$120

In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?

$1450

Refer to Table 23-3. What was Crete's investment in 2010?

$1491

In the economy of Talikastan in 2015, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $1000, and investment was $1000. What were Talikastan's exports in 2015?

$1500

In the economy of Talikastan in 2015, consumption was 75% of GDP, government purchases were $200, imports were $50 and 125% of the value of exports, investment was one-sixth of the value of consumption. What was Talikastan's GDP in 2015?

$1520

In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015?

$1900

Refer to Table 23-2. What were country A's government purchases in 2010?

$1975

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

$20 billion at an annual rate.

Refer to Table 23-1. Personal income for Chereaux in 2015 is

$201.

Refer to Table 23-3. What was Crete's consumption in 2010?

$2315

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

$250 to GDP.

In the economy of Talikastan in 2015, exports were $500, GDP was $6400, government purchases were $1700, imports were $400, and investment was $1800. What was Talikastan's consumption in 2015?

$2800

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2010 Quality Motors produced $30 million worth of automobiles, with $17 million in sales to Americans, $9 million in sales to Canadians, and $4 million worth of automobiles added to Quality Motors' inventory. The transactions just described contribute how much to U.S. GDP for 2010?

$30 million

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $8000, government purchases were $1200, and imports were $600. What was Talikastan's investment in 2015?

$3200

Refer to Table 23-6. In 2010, this country's real GDP was

$620

Refer to Table 23-2. What was country A's GDP in 2010?

$7253

Refer to Table 23-2. What were country A's exports in 2010?

$88

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

$9 million

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

$90,000

Refer to Table 23-2. What were country A's net exports in 2010?

-$32

Refer to Table 23-4. What was the growth rate of real GDP for 1930?

-8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.

Refer to Table 23-6. In 2013, this country's GDP deflator was

100.1

Refer to Table 23-10. What was this country's GDP deflator in 2017?

123.4

Refer to Table 23-10. In which year was this country's nominal GDP highest?

2017

Refer to Table 23-6. This country's inflation rate from 2012 to 2013 was

34.8%.

In the United States in 2012, consumption represented approximately

70 percent of GDP.

Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased

8.62%

Refer to Figure 23-1. Which of the following correctly identifies the flow of dollars?

A, L, N and B

GDP is not a perfect measure of well-being; for example,

All of the above are correct.

Which of the following is a way to compute GDP?

All of the above are correct.

Which of the following statements about GDP is correct?

All of the above are correct.

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

Bolivia, Thailand, Sweden, United States.

Which of the following is not included in the investment component of GDP?

None of the above are included in the investment component of GDP.

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

The 2013 payment is included in 2013 GDP as government purchases, but the 2014 payment is not included in 2014 GDP.

Which of the following items is counted as part of government purchases?

The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.

Refer to Table 23-7. Which of the following is not correct?

This economy experienced growth from 1975 to 1976.

Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in

U.S. GNP and Bermudan GDP.

A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included?

U.S. consumption and U.S. imports

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

U.S. imports but not U.S. exports increase.

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?

Why do wages differ across industries?

Which of the following is an example of a durable good?

a hair dryer.

Changes in nominal GDP reflect

both changes in prices and changes in the amounts being produced.

According to the circular-flow diagram, GDP

can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.

For an economy as a whole, income must equal expenditure because

every dollar of spending by some buyer is a dollar of income for some seller.

U.S. GNP

excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries

For the economy as a whole,

expenditure must equal income

Net exports equal

exports minus imports.

Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

firms and households

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

government expenditures and imports.

In the actual economy, goods and services are purchased by

households, firms, and the government.

Grapes are considered intermediate goods

if the purchaser uses them to make wine to sell others but not if the purchaser eats them.

Thomas, a U.S. citizen, works only in Canada. The value of the output he produces is

included in U.S. GNP, but it is not included in U.S. GDP.

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

increases.

The term economists use to describe a situation in which the economy's overall price level is rising is

inflation

Refer to Table 23-7. From 1976 to 1977,

inflation was 33.3% and output grew at a rate of 20%

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

intermediate goods.

Which of the following subcomponents of GDP can be either positive or negative?

inventory investment

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

investment

In the United States in 2012, government purchases of goods and services were

larger than investment, but smaller than consumption

Much of macroeconomics attempts to explain

long-run growth and short-run fluctuations in real GDP.

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

longer life expectancy and a higher percentage of the population that is literate.

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

market prices.

Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

markets for factors of production and markets for goods and services

An identity is an equation that

must be true because of how the variables in the equation are defined.

In 2012, U.S. net exports were

negative and about 3.5 percent the size of GDP

The GDP deflator for years subsequent to the base year measures the change in

nominal GDP from the base year that cannot be attributable to a change in real GDP.

Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.

nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45

The GDP deflator is the ratio of

nominal GDP to real GDP multiplied by 100.

Refer to Table 23-5. In 2015, this country's

nominal GDP was equal to real GDP, and the GDP deflator was equal to 100.

Which of the following is the correct formula for the GDP deflator?

nominal GDP/real GDP x 100

Transfer payments are

not included in GDP because they are not payments for currently produced goods or services.

An American retailer purchased 500 pairs of shoes from a company in Thailand in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. Which of the following components of U.S. GDP is affected by this transaction in the third quarter of 2016?

only consumption and investment

Real GDP will increase

only when output increases

When economists talk about growth in the economy, they measure that growth as the

percentage change in real GDP from one period to another.

Nominal GDP will definitely increase when

prices increase and output increases

A recession has traditionally been defined as a period during which

real GDP declines for two consecutive quarters.

Refer to Table 23-9. In 2009, this country's

real GDP was $250, and the GDP deflator was 120.

If nominal GDP doubles and the GDP deflator doubles, then real GDP

remains constant.

Which of the following is included in the investment component of GDP?

spending on new residential construction but not spending on stocks and bonds

Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?

the amount she paid to buy new parts, gasoline, and oil.

Disposable income is

the income that households and businesses have remaining after satisfying their obligations to the government.

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

the purchase of a new house

Which of the following is included in government purchases?

the services of a U.S. government attorney valued at the cost of her salary

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP.

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

a positive contribution both to investment and to GDP.

A form of government spending that is not made in exchange for a currently produced good or service is called

a transfer payment.

For the purpose of calculating GDP, investment is spending on

capital equipment, inventories, and structures, including household purchases of new housing

Which of the following is not included in GDP?

carrots grown in your garden and eaten by your family

Real GDP is the yearly production of final goods and services valued at

constant prices

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

consumption and imports

Retained earnings is income that

corporations have earned but have not paid out to their owners.

Which of the following domestically produced items is not included in GDP?

All of the above are included in GDP.

Which of the following items is included in U.S. GDP?

All of the above are included in U.S. GDP.

Which of the following transactions adds to U.S. GDP for 2015?

All of the above transactions add to U.S. GDP for 2015.

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Kenya, Tanzania, Ghana