FINAL MACRO EXAM TEST 19

CANOES−R−US makes canoes. It buys the shell of the canoe from another local firm for​ $300 and uses its labor and intermediate goods to make the canoe. It sells the finished canoe to a retail canoe store for​ $800. The retail canoe store then sells the canoe to a consumer for​ $1,200. The value of each canoe in gross domestic product equals

$1,200

Consumption expenditures ​$800 Investment expenditures 200 Government purchases 300 Exports 100 Imports 200 Wages 800 Refer to the table above. Consider the data above​ (in billions of​ dollars) for an​ economy: Gross domestic product​ (in billions of​ dollars) for this economy equals

$1,200

Which of the following could cause nominal GDP to increase next​ year, but real GDP to​ decrease?

The price level rises and the quantity of final goods and services produced falls.

Consider the following data for​ Tyrovia, a country that produces only two​ products: guns and butter Real GDP for Tyrovia for 2018 using 2009 as the base year equals

$690

Product Quantity Price Sweatshirts 50 $35 Dental examinations 40 75 Coffee drinks ​ 1,000 4 Coffee beans 2,000 0.50 Suppose that a simple economy produces only four goods and​ services: sweatshirts, dental​ examinations, coffee​ drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above​ table, nominal GDP for this simple economy equals

$8,750

Which of the following equations correctly measures GDP in an​ economy?

GDP​ = C​ + I​ + G​ + NX

The value of what a U.S. owned​ McDonald's produces in South Korea is included in the U.S.​ ________ and the South Korean​ _________.

GNP; GDP

​________ is/are the payment for the factor of production​ ________

Profit; entrepreneurship

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists​ study?

Real GDP grows by​ 2.3% in the second quarter.

Which of the following transactions represents the purchase of a final​ good?

Your father buys a new John Deere riding lawn mower

Which of the following goods is directly counted in​ GDP?

a 12 inch Subway sandwich purchased by a student

An example of a transfer payment is

a welfare payment

​Investment, as defined by​ economists, would not include which of the​ following? Ford

buys U.S. government bonds.

​Investment, as defined by​ economists, would include the purchase of a

computer by an accounting firm.

The purchase of a new automobile is included in

consumption expenditures on durable goods.

What is the largest component of spending in the​ U.S.?

consumption spending

To calculate GDP by the expenditure method one must add

consumption​ spending, investment​ spending, government​ purchases, and net exports.

The best measure of the income households actually have available to spend is

disposable personal income

The underground economy can be described as

economic activity that is hidden from the government to avoid taxes or because the activity is illegal.

In the circular flow​ model, the value of total income for an economy​ ________ the value of total production

equals

The output of U.S. citizens who work in Canada would be included in the

gross domestic product of Canada

Gross domestic product understates the total production of final goods and services because of the omission of

household production

The size of the underground economy would tend to increase if the government of a country

increased income tax rates

If the quantity of goods and services produced in the economy decreases

it may be possible for nominal GDP to increase

If GDP calculations included measurements of pollution and environmental​ damage, GDP values would most likely be

less than their values without these measurements.

Disposable personal income equals personal income

minus personal tax payments.

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

net exports.

Gross national product​ (GNP) of the United States is the market value of all final goods and services

produced by residents of the United States anywhere in the world.

To examine how the total production of an economy has changed over​ time, it would be better to examine

real GDP

When consumers are less confident about their jobs or​ incomes, they are more likely to

reduce purchases of durable goods than nondurable goods.

Total income in an economy is equal to

the sum of​ wages, interest,​ rent, and profit.

Which of the following is included in both the U.S. GDP and U.S.​ GNP?

the value of all cars produced by General Motors in the U.S.

​Suppose, in​ 2018, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for​ 2018?

the value of the services of the real estate agent

Real GDP is GDP in a given year

valued in the prices of the base year.

In calculating gross domestic​ product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA

values goods and services at their market​ prices, multiplies them by the quantity​ produced, and then adds them up.

During a business cycle​ expansion, total production​ ________ and total employment​ ___________.

​increases; increases