Econ 102 Quiz 3

Depreciation of capital includes (choose one or both) A. the extent to which plant, equipment, and residential structures wear out during the year B. the fall in the market value of the housing stock when house prices crash

A

The GDP deflator is defined as A. Nominal GDP/Real GDP B. Real GDP/Nominal GDP

A

Which statement below is true? A. Capital is a stock and income is a flow B. Income is a stock and capital is a flow

A

Which statement below is true? A. GDP fell when Prohibition became law and rose when it repealed B. GDP rose when Prohibition became law and fell when it was repealed

A

World GDP is A. equal to world GNP B. smaller than world GNP C. greater than world GNP

A

Which statement below is true? (Choose one or both) A. GNP=GDP+Factor Payments from Abroad -- Factor Payments to Abroad. B. In the case of the United States, GDP, and GNP are quite close.

A & B

Which statement below is true? (Choose one or both) A. Net National product (NNP)= Gross National Product (GNP)-Depreciation B. National Income= NNP - Statistical Discrepancy

A & B

Gross domestic product (GDP) may be viewed as (choose one or more) A. the total income of everyone in the economy B. the total expenditure on the economy's output of goods and services C. the total value added at each stage of production

A, B, & C

Consumption (C) is an estimate of A. spending by households on goods and services, and includes purchases of new housing B. spending by households on goods and services, and excludes purchases of new housing C. spending by households on goods and services, and excludes purchases of new housing and consumer durables

B

Government purchases do not include A. spending on goods and services by local and state governments B. unemployment benefits to those actively seeking work C. expenditure on diplomatic representation abroad because embassies are located outside of the United States

B

How does the Bureau of Economic Analysis now accommodate changes in the relative prices of constituent elements in the GDP? A. Choosing a new base year every five years B. Using a chain-weighted measure of real GDP

B

Macroeconomics assume that A. in the short run wages and prices are more flexible than in the long run. B. in the long run wages and prices are more flexible than in the short run.

B

When we calculate U.S. net exports (NX), we would not include A. U.S. residents buying a French cheese B. Warren Buffett, a U.S. citizen and resident, buying Buckingham Palace in London (assuming it was for sale!) C. British residents visiting Disneyland

B

Which is the most volatile component of GDP? A. consumption B. investment C. government purchases

B

Which statement below is true? A. We use endogenous variables as given to explain exogenous variables. B. We use exogenous variables as given to explain endogenous variables

B

Consider the equation GDP=C+I+G+NX. Which statement below is false? A. C is consumption B. I is investment C. G is total spending by federal, state, and local governments D. NX is net exports

C

Gross domestic product (GDP) does not include (choose one) A. construction of new housing B. current repairs to existing houses C. sales of existing houses D. services rendered by estate agents E. paid advertising by private vendors

C

Which statement below is false? A. If real GDP grew slower than population, real GDP per person would fall. B. If population grew slower than real GDP, real GDP per person would increase. C. If real GDP grew slower than nominal GDP, the GDP deflator would fall.

C

Investment (I) is an estimate of A. spending on capital equipment by firms B. spending on capital equipment and inventories by firms C. spending on capital equipment, inventories, and structures by firms D. spending on capital equipment, inventories, and structures, and includes purchases of new housing by firms and households.

D