Macroecon-Ch.27-30

A nation's gross domestic product (GDP) a) is the dollar value of all final output produced within the borders of the nation during a specific period of time. b) is the dollar value of all final output produced by its citizens, regardless of where they are living. c) can be found by summing C + In + S + Xn. d) is always some amount less than C + Ig + G + Xn.

A

A price index is a) the price of a market basket in a given year divided by the price of an identical market basket in a reference year. b) a comparison of real GDP in one period relative to another. c) the cost of a market basket of goods and services in a base period divided by the cost of the same market basket in another period. d) a ratio of real GDP to nominal GDP.

A

To manage the problem of adding dissimilar items when calculating GDP, the BEA a) adds the monetary values of each final good or service produced. b) uses the measurement of weight, adding the pounds of each final good or service produced. c) uses the measurement of height, adding the inches of each final good or service produced. d) goes ahead and adds apples and oranges, adding the numbers of each final good and service produced.

A

Which of the following is an intermediate good? a) new cars purchased by an auto dealership b) a ticket to a baseball game c) gasoline for the family car d) the new car your friend just purchased

A

A business buys $1,250 worth of inputs from other firms in order to produce a product. The business makes 550 units of the product and each of them sells for $8. The value added by the business to these products is a) $1,250. b) $3,150. c) $15,000. d) $15.

B

GDP can be calculated by summing a) personal consumption, investment, government purchases, exports, and imports. b) personal consumption, investment, government purchases, and net exports. c) personal consumption, investment, wages, and rents. d) personal consumption, investment, government purchases, and imports.

B

National income accountants can avoid multiple counting by a) including transfer payments in their calculations. b) only counting final goods. c) counting both intermediate and final goods. d) only counting intermediate goods.

B

National income accountants define consumer durable goods as products that have an expected life of a) less than 3 years. b) 3 years or more. c) more than 1 year. d) unlimited years.

B

Nominal GDP is a) the sum of all monetary transactions that occur in the economy in a year. b) the sum of all monetary transactions involving final goods and services that occur in the economy in a year. c) the amount of production that occurs when the economy is operating at full employment. d) money GDP adjusted for inflation.

B

The Bureau of Economic Analysis compiles the NIPA accounts. The letters NIPA represent a) National Inflation and Production Assessment. b) National Income and Product Accounts. c) Net Income of Production Analysis. d) National Incorporation for Professional America.

B

The agency responsible for compiling the National Income and Product Accounts for the U.S. economy is the a) Council of Economic Advisers. b) Bureau of Economic Analysis. c) National Bureau of Economic Research. d) Bureau of Labor Statistics.

B

Final goods and services refers to a) goods and services that are unsold and therefore added to inventories. b) goods and services whose value has been adjusted for changes in the price level. c) goods and services purchased by ultimate users, rather than for resale or further processing. d) the excess of U.S. exports over U.S. imports.

C

If real GDP in a particular year is $80 billion and nominal GDP is $480 billion, the GDP price index for that year is a) 200. b) 480. c) 600. d) 100.

C

Net exports are a) that portion of consumption and investment goods sent to other countries. b) exports plus imports. c) exports less imports. d) imports less exports.

C

The largest component of total expenditures in the United States is a) net exports. b) government purchases. c) personal consumption expenditures. d) gross investment.

C

To equalize the GDP totals produced by the expenditures method and the income method, NIPA accountants a) add taxes on production and imports to the total produced by the expenditures method. b) add net foreign factor income to national income. c) add a statistical discrepancy to national income. d) ask the IRS to audit every tax return to find any misreported income.

C

Veterans' payments are excluded from GDP calculations because they are a) a private transfer payment. b) an interstate transfer payment. c) a public transfer payment. d) None of the answers are correct.

C

Which of the following best defines disposable income? a) income over and above the amount households need b) before-tax income received by households c) income received by households that is used for consumption and saving d) income received by households that is used for paying taxes

C

A benefit of using monetary values in calculating GDP is a) it is the only way we can know whether GDP (aggregate output) has increased or decreased. b) because people put higher dollar values on things they like, we can infer that higher levels of GDP imply higher levels of satisfaction. c) it helps when comparing changes in GDP to changes in inflation. d) it is the only way we can know whether GDP (aggregate output) has increased or decreased and because people put higher dollar values on things they like, we can infer that higher levels of GDP imply higher levels of satisfaction.

D

Real GDP refers to: a) the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income. b) GDP data that embody changes in the price level but not changes in physical output. c) GDP data that do not reflect changes in both physical output and the price level. d) GDP data that have been adjusted for changes in the price level.

D