Management Test 1
According to the theory of comparative advantage, a country should
specialize in and export goods with the lowest opportunity cost.
If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be
$1,600.
If an economy produced 10 pizzas at $20 each and fifteen gallons of root beer at $5 each, the total value of these goods and services would be
$275.
If national income is $600 billion, personal income is $400 billion, personal taxes are $120 billion, then disposable income equals
$280 billion.
Which of the following is an example of a final good or service?
. a computer purchased by Federal Express to track shipments
When calculating GDP, exports are ________ and imports are _______
. added; subtracted
The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is
7.27%
The theory of ________ is credited to David Ricardo.
comparative advantage
The largest income component of GDP is
compensation of employees
According to the theory of comparative advantage, a country
exports the goods in which its has a comparative advantage.
When calculating GDP, ________ are added and ________ are subtracted.
exports; imports
If the price of a car in the United States is $26,000, and the exchange rate between the dollar and the British pound rises from $1.50 to $2.00 per pound, then the price of the American car in Britain will
fall.
Which of the following would be counted in 2016's GDP?
the bonus check a stockbroker gets from his/her company in 2016
Which of the following is a good or service counted in GDP?
a new tire you buy for your personal car
Which of the following is included in both the U.S. GDP and GNP?
The value of all cars produced by General Motors in the U.S.
Gross national product is the total market value of
all final goods and services produced by resources owned by a country, regardless of where production takes place.
The main advantage of trade between two countries is that
both countries have consumption choices beyond their current resource and production constraints.
The single largest expenditure component in GDP is
consumption
The single largest expenditure component in GDP is
consumption.
The purpose of the Corn Laws was to
discourage imports and encourage exports, and thus keep the price of food high.
If the value of net exports is negative, then
imports exceed exports
In 2016 final sales equal $200 billion, and the change in business inventories is $50 billion. GDP in 2016
is $250 billion.
If personal saving is -$10 billion and disposable personal income is $370 billion, then personal consumption spending
is $380 billion.
A country's trade is balanced when
its net exports equal to zero.
Double counting can be avoided by
not counting the value of intermediate goods in GDP.
A rancher raises alpaca. Once a year, he shears them and sells the raw wool to a processor who spins it into yarn. The yarn is then sold to a mill which produces and sells alpaca sweaters. In calculating GDP we would count
only the sweaters.
If you are traveling in China and you purchase a meal that costs 140 yuan and the current exchange rate is 7 yuan to the dollar, then the price of the meal in U.S. currency is
$20.
Suppose that net investment in 2018 was $20 billion and depreciation was $4 billion. Gross investment in 2018 was
$24 billion.
If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is
133.33.
If disposable personal income is $400 billion and personal saving is $8 billion, the personal saving rate is
2%.
Suppose that net investment in 2016 was $20 billion and depreciation was $4 billion. Gross investment in 2016 was
24 billion
Proprietors' income includes all of the following except
the income of all businesses—incorporated and unincorporated.
Real GDP is gross domestic product measured
using the prices of a specified base year
If a country has a trade surplus of $40 billion, which of the following can be true?
The country's exports are $160 billion, and its imports are $120 billion
Which of the following is included in both the U.S. GDP and GNP?
The value of all cars produced by General Motors in the U.S
China has a comparative advantage in textiles and an absolute advantage in both textiles and radios. Japan has a comparative advantage in radios. According to this scenario
China should export textiles and import radios.
The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.
GNP; GDP
Country A would have an absolute advantage compared to Country B in the production of corn if
Country A uses fewer resources to produce corn than Country B does.
