Marco economics Chapter 12 Exam
CANOES - R - US makes canoes. It buys the shell of the canoe from another 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. Refer to the scenario above. The value of each canoe in gross domestic product equals
$1,200
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 headlines would be more closely related to what macroeconomics study than what microeconomics study?
Real GDP grows by 2.3% in the second quarter
When consumers are less confident about their jobs or incomes, they are most likely to
Reduce purchases of durable goods than non durable goods.
Which of the following could cause nominal GDP to increase, but real to decrease?
The price level rises and the quantity of final goods and services produced falls.
Total income in an economy is equal to
The sum of waged, interest, rent, and profit.
Which of the following is included in both the U.S. GDP and U.S. GNP?
The value of all the cars produced by General Motors in the U.S.
Suppose, in 2014, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for 2014?
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 calculation 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.
Which of the following transactions represents the purchase of a final good?
Your father buys a new John Deere riding lawn mower.
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
Gross national product, GNP, of the United States is the market value of all goods and services
produced by residents of the United States anywhere in the world
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
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
To examine how the total production of an economy has changed over time, it would be better to examine
Real GDP
Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Real GDP for Tyrovia for 2013 using 2005 as the base year equals
$690
Suppose that a simple economy produces only four foods 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 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.
What is the largest component of spending in the U.S.?
Consumption Spending
The purchase of a new automobile is included in
Consumption expenditures on durable goods
To calculate GDP by the expenditure method one must add
Consumption spending, investment spending, government spending 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
Economy activity that is hidden from the government to avoid taxes or because the activity is illegal.
In a circular flow model, the value of total income for an economy _____ the value of total production.
Equals
During a business cycle expansion, total production _____ and total employment _____.
Increase; 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
_____ is/are the payment for the factor of production _____.
Profit; entrepreneurship