Economics - M11

In 2008, U.S. Nominal GDP totaled approximately:

$14.3 trillion

The expenditure method of measuring GDP is calculated by adding up:

- The final goods and services produced domestically during a given period. - Consumption + Investment + Government Spending + (Exports-Imports). - Domestic production of final goods and services for consumers, firms, government, and the international sector (through net exports).

Which of the following is NOT part of U.S. GDP? - The value of a Toyota manufactured in Japan and sold in the United States - The value of a Ford Mustang produced in the United States and sold in Canada - The salary of the governor of Minnesota - The value of a Rhode Island attorney's services - The value of a Chevrolet produced in the United States last year but not sold until this year

- The value of a Toyota manufactured in Japan and sold in the United States

A country will roughly double its GDP in twenty years if its annual growth rate is:

3.5 percent.

Estimates of the size of the underground economy range from:

4 to 20 percent

Consumption is the largest single component of GDP. In recent years it represents approximately ____ percent of GDP.

70

Which of the following products are not included in current U.S. GDP?

A Ford Mustang produced last year and sold this year

Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita?

A rate of population growth that is greater than the rate of growth of real GDP

Which of the following would not be counted as a final good for inclusion in GDP?

A sheet of glass purchased by General Motors for the side window of a new car

In a fully employed economy, invention and discovery:

Are achieved through sacrifices in current consumption.

The investment component of GDP includes:

Construction of a new steel mill.

The largest single expenditure component of GDP is:

Consumption.

Which of the following is a problem with using real GDP as a measure of economic well-being?

Does not account for production within the household

What is the measure of the income received by owners of resources used in making final goods and services?

Factor payments

As more capital per worker is added, a per worker production function generally becomes:

Flatter because capital is subject to diminishing marginal returns.

The total dollar value of purchases in the economy is far larger than GDP primarily because:

GDP excludes the value of intermediate goods exchanged.

If a nation's imports exceed its exports:

GDP will be less than the sum of consumption, investment, and government purchases.

Final goods or services used to compute GDP refer to:

Goods and services purchased by the ultimate users.

Which of the following best describes the relationship between economic growth and literacy? - As the economy grows, literacy declines because it becomes less and less useful in a developed economy. - Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. - Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. - There is no correlation between economic growth and literacy.

Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

The goods and services that are used in the production of other goods and services are called:

Intermediate goods.

The most volatile GDP category under the expenditure approach is:

Investment.

The prosperity of a nation today is typically measured by its:

Output per capita

Intermediate products:

Produced domestically are not directly reflected in a nation's GDP.

GDP is:

The value of all final goods and services produced domestically within a given period of time.

GDP is:

The value of all final goods and services produced domestically within a given period.

Transfer payments are included in which category under the expenditure approach to GDP accounting?

Transfer payments are not directly included in GDP calculations.

Sergei has developed a new fat substitute that has no calories and produces no side effects. In order for him to be encouraged to bring this innovation to the marketplace he is likely to want which of the following the most?

a patent

Measures of well-being include: - life expectancy. - infant mortality rates. - literacy rates. - pollution levels.

all of the above

Which of the following factors that affect our well-being does GDP fail to adequately account for? - changes in the quality of goods - externalities - leisure - nonmarket transactions

all of the above

Net exports are defined as:

exports minus imports

The services rendered by a special agent with the Federal Bureau of Investigation is included in which expenditure category of GDP?

government purchase

Consumption is the purchase of goods and services by:

households

If the price index is now 120, it means:

prices are 20 percent higher than in the base year.

The faster the rate of technological progress:

the greater the rate of economic growth.

GDP does not directly include:

the value of intermediate goods sold during a period.