Economics Ch. 23, 24, 25 Review

A nation's gross domestic product (GDP): A. can be found by summing C+In+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

A

A nation's gross domestic product (GDP): A. is the dollar value of all final output produced within the borders of the nation 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+In+G+Xn

A

Economic growth is best defined as an increase in: A. either real GDP or real GDP per capita B. nominal GDP C. total consumption expenditures D. wealth in the economy

A

If intermediate goods and services were included in GDP: A. the GDP would be overstated B. the GDP would then have to be deflated for changes in the price level C. nominal GDP would exceed real GDP D. the GDP would be understated

A

In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are: A. not counted B. counted as investment spending C. counted as government spending D. counted as consumption spending

A

Real GDP is preferred to nominal GDP as a measure of economic performance because: A. nominal GDP uses current prices and thus may over- or understate true changes in output B. nominal GDP only includes goods and excludes services C. nominal GDP is not adjusted for population changes D. real GDP accounts for changes in the quality of goods and services produced

A

The Industrial Revolution and modern economic growth resulted in: A. the average human life span more that doubling B. a major population shift from urban to rural areas C. increased production by local craftsmen D. all of these

A

The largest component of national income is: A. compensation of employees B. rents C. interest D. corporate profits

A

For a nation's real GDP per capita to rise during a year: A. consumption spending must increase B. real GDP must increase more rapidly than population C. population must increase more rapidly than real GDP D. investment spending must increase

B

Real GDP measures the: A. total dollar value of all goods and services produced within the borders of a country using current prices B. value of final goods and services produced within the borders of a country, corrected for price changes C. total dollar value of all goods and services consumed withing the borders of a country, adjusted for price changes D. value of all goods and services produced in the world, using current prices

B

Under what circumstances do rates of economic growth understate the growth of economic well-being? A. economic growth has occured because of increased length of the workweek B. product quality has increased C. air quality has declined as GDP has increased D. populatin has grown faster than real output

B

When economists refer to "investment," they are describing a situation where: A. people are buying shares of corporate stock B. resources are devoted to increasing future output C. money is saved in a bank account D. financial assets are purchased in the hope of a monetary gain

B

Which of the following statements is most accurate about advanced economics? A. Economies experience a positive growth trend over the short run, but experience significant variability in the long run B. Economies experience a positive growth trend over the long run, but experience significant variability in the short run C. Economies experience positive and stable growth over both the long run and short run D. Economies experience little long-run growth in ouput, but can experience significant growth in the short run

B

Which of the following statements is most accurate about modern economic growth? A. Economic historians mark modern economic growth as beginning around A.D. 1500 B. Modern economic growth is characterized by sustatined ongoing increases in living standards C. Modern economic growth has virtually eliminated business cylce fluctuations D. Modern economic growth has been distributed more or less equally across nations

B

Gross domestic product (GDP) measures and reports output: A. as an index number B. in percentage terms C. in dollar amounts D. in quantities of physical units (for example, pounds, gallons, and bushels)

C

In national income accounting, consumption expenditures include: A. purchases of both new and used consumer goods B. consumer durable goods and consumer nondurable goods, but not services C. consumer durable goods, consumer nondurable goods, and services D. changes in business inventories

C

Macroeconomics is mostly focused on: A. the individual markets within an economy B. Only the largest industries in the economy C. the economy as a whole D. why specific businesses fail

C

The amount of after-tax income received by households is measured by: A. discretionary income B. national income C. disposable income D. personal income

C

The number of years required for real GDP to double can be found by: A. dividing the annual growth rate by 0.7 B. multiplying the annual growth rate by 70 C. dividing 70 by the annual growth rate D. adding 14 to the annual growth rate

C

Tom Atoe grows fruits and vegetables for home consumption. This activity is: A. excluded from GDP in order to avoid double counting B. excluded from GDP because an intermediate good is involved C. productive but is excluded from GDP because no market transaction occurs D. included in GDP because it reflects production

C

Value refers to: A. the increase in GDP that has been adjusted for adverse environmental effects B. the excess of gross investment over net investment C. the difference between the value of a firm's output and the value of the inputs it has purchased from others D. the portion of any increase in GDP that is caused by inflation as opposed to an increase in real output

C

Free trade: A. discourages growth by increasing competitive pressures on domestic firms B. encourages growth by effectively eliminating all patent and copyright barriers to growth C. discourages growth compared to situations where the government strongly controls free trade D. encourages growth by promoting the rapid spread of new inventions and innovations

D

Which of the following is not a supply factor in economic growth? A. the stock of capital B. technological advance C. the size and quality of the labor force D. aggregate expenditures of households, businesses, and government

D