Quiz - Ch. 6A: GDP and the Measurement of Progress

An economy has $10 trillion in consumption, $2.5 trillion in investment, $3 trillion in government purchases, $1 trillion in exports, and $1.5 trillion in imports. What is GDP in this economy?

$15 trillion

If a country produced nothing but 20 smartphones and 10 Blu-ray players in 2017, priced at $100 per smartphone and $200 per Blu-ray player, its GDP in 2017 would be:

$4,000

The value of a car produced and sold in 2000 and sold again to a second owner in 2008 would be included in GDP for:

2000 only

If nominal GDP is $6,250 and the GDP Deflator is 125, then real GDP = ?

5,000

Which agency is responsible for computing GDP?

Bureau of Economic Analysis

Which of the following are the components that make up GDP in the National Spending Approach?

Consumption, Investment, Government Spending, Net Exports

"Purchasing Power Parity" is used to adjust for which of the following?

Differences in GDP caused by inflation

Which of the following creates the biggest "problem" when comparing GDP per-capita in the US to GDP per-capita in Europe?

Europeans "consume" much more leisure than Americans

Which transaction is not included in gross domestic product?

Francis receives her social security check.

Which of the following would be included in GDP in the United States?

Toyota, a Japanese car company, producing cars in the United States

According to the national spending approach, which of the following is counted in investment?

a restaurant buys a new wood-fired oven for baking pizzas

The cost of negative externalities that harm the environment, such as pollution costs:

cause GDP to decline, but by only the cost of cleanup

Gross domestic product is the market value of all:

finished goods and services produced within a country in a year.

A good produced in the current time period but put into a firm's inventory instead of being sold

is considered unsold inventory and counted as a part of investment in current GDP

The difference between nominal GDP and real GDP is that nominal GDP:

measures a country's production of finished goods and services at current market prices, whereas real GDP measures a country's production of finished goods and services at the same prices in all years.

The value of volunteer services is:

not included in GDP, but should be because a service is produced.

To compare levels of production from different years, the appropriate measure to use is:

real GDP

What does the investment component of GDP measure?

spending on goods to be used in future production