Ch 7 & 8 practice test
National income accountants can avoid multiple counting by: A) including transfers in their calculations. C) only counting final goods. B) counting both intermediate and final goods. D) only counting intermediate goods.
Answer : C
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 reflect changes in both physical output and the price level. D) GDP data that have been adjusted for changes in the price level.
Answer D
A nation's gross domestic product (GDP): A) can be found by summing C + Ig + G + Xn. B) is the dollar value of the total output produced by its citizens, regardless of where they are living. C) can be found by summing C + S + G + Xn. D) is always some amount less than its NDP.
Answer: A
Government purchases include government spending on: A) government consumption goods and public capital goods. B) government consumption goods only. C) public capital goods only. D) government consumption goods, public capital goods, and transfer payments.
Answer: A
If the Consumer Price index rises from 300 to 333 in a particular year, the rate of inflation in that year is: A) 11 percent. B) 33 percent. C) 91 percent. D) 10 percent.
Answer: A
If depreciation (consumption of fixed capital) exceeds domestic investment, we can conclude that: A) nominal GDP is rising but real GDP is declining. B) net investment is negative. C) the economy is importing more than it exports. D) the economy's production capacity is expanding.
Answer: B
Which of the following is not economic investment? A) the purchase of a drill press by the Ajax Manufacturing Company B) the purchase of 100 gold coins by a retired professor C) construction of a suburban housing project D) the piling up of inventories on a shoe store shelf
Answer: B
Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is: A) cyclically unemployed. C) frictionally unemployed. B) structurally unemployed. D) not a member of the labor force.
Answer: C
Which of the following best measures improvements in the standard of living of a nation? A) growth of nominal GDP C) growth of real GDP per capita B) growth of real GDP D) growth of national income
Answer: C
Which of the following is an intermediate good? A) the purchase of gasoline for a ski trip to Colorado B) the purchase of a pizza by a college student. C) the purchase of hockey sticks by a professional hockey team. D) the purchase of jogging shoes by a professor
Answer: C