ECON-2 Ch 8 Homework Quiz

Consider the following data for Tyrovia, a country that produces only two products: guns and butter.Refer to Table 8-8. Real GDP for Tyrovia for 2019 using 2012 as the base year equals $880. $690. $560. $1,140.

690

Which of the following statements is true? GDP growth distributes income equally to people in the economy. Household production is counted in GDP as it amounts to real production. GDP accounting rules do not adjust for production that pollutes the economy. A decrease in the crime rate increases GDP as people will spend more on security.

GDP accounting rules do not adjust for production that pollutes the economy.

Legalizing all forms of illegal activities increases GDP and reduces the size of the underground economy. reduces GDP and the size of the underground economy. reduces GDP and increases the size of the underground economy. increases GDP and increases the size of the underground economy.

INCORRECT: reduces GDP and the size of the underground economy. TRY: increases gdp and reduces size of underground economy

Which of the following goods is directly counted in GDP? the bread that Subway purchases for its sandwiches the plastic bags that Subway purchases to wrap its sandwiches a 12-inch Subway sandwich purchased by a student the lettuce that Subway purchases for its sandwiches

a 12-inch Subway sandwich purchased by a student

The nominal GDP of the U.S. in 2018 was approximately $20.9 trillion. This means that the value of output in 2018 was around $20.9 trillion. total spending in 2018 was around $20.9 trillion. total income in 2018 was around $20.9 trillion. all of the above are true..

all of the above are true..

Increases in real GDP would understate the well-being of a country over time if, over that time period, the crime rate increased. percentage of people addicted to illegal drugs increased. amount of pollution decreased. average hours worked per week decreased.

amount of pollution decreased.

Gross domestic product understates the total production of final goods and services because of the omission of inflation. exports. household production. intermediate goods.

household production.

The size of the underground economy would tend to increase if the government of a country legalized prostitution. increased income tax rates. legalized marijuana. decreased government regulations on businesses.

increased income tax rates.

During a business cycle expansion, total production ________ and total employment ________. increases; increases decreases; increases increases; decreases decreases; decreases

increases; increases

If the quantity of goods and services produced in the economy decreases, nominal GDP would certainly increase. real GDP would certainly increase. it may be possible for real GDP to increase. it may be possible for nominal GDP to increase.

it may be possible for nominal GDP to increase.

Which of the following would be directly counted in GDP in 2019? kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home none of the above kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950 kitchen cabinets purchased from Home Depot in 2019 to be installed in a house built in 1997

kitchen cabinets purchased from Home Depot in 2019 to be installed in a house built in 1997

The purchase by a household in China of a car produced in the United States is included in U.S. net exports. government purchases. investment expenditures. consumption expenditures.

net exports.

Presently, GDP is ________ to compensate for the costs of environmental damage. not adjusted partially adjusted adjusted on a chain-weight basis fully adjusted

not adjusted

Real GDP will increase only if the price level rises. if either the price level rises or the quantity of final goods and services produced rises. only if the price level falls. only if the quantity of final goods and services produced rises.

only if the quantity of final goods and services produced rises.

Suppose that nominal GDP in 2019 was less than real GDP in 2019. Given this information, we know for certain that the price level in 2019 was greater than the price level in the base year. real GDP in 2019 was less than real GDP in the base year. real GDP in 2019 was greater than real GDP in the base year. the price level in 2019 was less than the price level in the base year.

the price level in 2019 was less than the price level in the base year.

Suppose, in 2019, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for 2019? the value of the house in 2003 the value of the house in 2019 minus depreciation the value of the house in 2019 the value of the services of the real estate agent

the value of the services of the real estate agent

Nominal GDP is GDP in a given year valued in the prices of that year. adjusted for inflation. valued in the prices of the base year. adjusted for anticipated inflation.

valued in the prices of that year.

Real GDP is GDP in a given year adjusted only for unanticipated inflation. valued in the prices of that year. adjusted only for anticipated inflation. valued in the prices of the base year.

valued in the prices of the base year.

Refer to Table 8-4. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals $1,400. $2,200. $1,600. $2,100.

$1,600.

Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts.Refer to Table 8-10. Nominal GDP for Vicuna for 2017 equals $5,100. $5,300. $5,850. $4,920.

$4,920.

Consider the data shown above for Vicuna, a country that produces only two products: oranges and shirts.Refer to Table 8-10. Real GDP for Vicuna for 2017 using 2019 as the base year equals $4,620. $5,650. $5,100. $5,850.

$5,650.

Refer to Table 8-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals $9,750. $7,250. 3,090 units. $8,750.

$8,750.

Consider the following data for Tyrovia, a country that produces only two products: guns and butter.Refer to Table 8-8. Nominal GDP for Tyrovia in 2019 equals $1,140. $880. $690. $560.

1140