Micro 7 GDP Exam

In the economy of Ukzten in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP?

$1750

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.

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

87.5

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

96.1 so prices are lower than in the base year.

Let C represent consumption expenditure, S saving, I gross private domestic investment, G government expenditure on goods and services, and X - M net exports of goods and services. Then GDP equals

C + I + G + X - M

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Ellen's but not Sam's.

Nominal GDP is

GDP valued at prices of that year.

Which of the following represents a transfer payment?

The government sends your grandfather his Social Security check.

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany

U.S. GDP decreases because net exports are negative.

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

a new set of tools by an auto mechanic, for use in repairing cars.

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

a refrigerator

Most goods and services produced at home A. and most goods and services produced illegally are included in GDP. B. are included in GDP while most goods and services produced illegally are excluded from GDP. C. are excluded from GDP while most goods and services produced illegally are included in GDP D. and most goods and services produced illegally are excluded from GDP.

and most goods and services produced illegally are excluded from GDP.

Reported GDP increases when, in fact, total production is unchanged when I. there is a shift from household production to market production. II. a previously illegal activity is legalized.

both I and II

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.

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

gross domestic product

Grapes are considered intermediate goods

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

Gross domestic product measures

income and expenditures.

Gross domestic product is the total ________ produced within a country in a given time period

market value of all final goods and services

Two methods of measuring GDP are

the income approach and the expenditure approach.