Chapter 8 Quiz

A capital good is Part 2 A. one that is purchased in order to make other goods and services. B. not part of Gross Domestic Product​ (GDP) because it is an intermediate product. C. part of investment spending when purchased by either private businesses or by the federal government. D. one produced by the government.

A

Nominal income per person in the United States in 1960 was about​ $2,800 per​ year, while in 1990 nominal income per person was about​ $21,000. This indicates that Part 2 A. nominal income was about 7.5 times greater in​ 1990, but we​ can't tell if this increase is due to​ inflation, economic​ growth, or a combination of the two. B. people enjoyed a standard of living about 7.5 times higher in 1990 than in 1960. C. a dollar in 1960 was worth less than a dollar in 1990. D. the average person would consider​ him/herself about 7.5 times happier in 1990 than in 1960.

A

Suppose Social Security contributions rise by​ $5 billion while Social Security benefits also rise by​ $5 billion.​ Further, personal income taxes fall by​ $700 million. As a result Part 2 A. disposable income should increase while personal income and national income are unchanged. B. personal​ income, disposable personal​ income, and national income remain unchanged. C. national​ income, personal​ income, and disposable income should increase. D. both personal and disposable personal income should increase.

A

our parents surprise you with a​ $500 check. As a​ result, the U.S. GDP Part 2 A. remains unchanged because it was counted when your parents earned it. B. decreases because you have to pay taxes on this income. C. decreases because you will spend it on useless goods. D. increases because this is unexpected income to you.

A

C​ + I​ + G​ + X equals Part 2 A. PI. B. GDP. C. NDP. D. DPI.

B

Gross domestic income can be defined as Part 2 A. the sum of all profits earned by businesses in a year. B. the sum of all incomes earned by all factors of production in a year. C. the sum of all incomes earned by individuals. D. the sum of all profits earned minus depreciation.

B

A farmer buys seed for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30​ cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes​ bread, which is sold to the grocer for 90 cents. The grocer sells the bread for​ $1.40. What is the value added for the​ grocer? Part 2 A. 15 cents B. ​$1.40 C. 50 cents D. 35 cents

C

Suppose a firm purchases new equipment to replace​ worn-out equipment at its factory. This purchase of new equipment is considered Part 2 A. durable consumption goods. B. inventory investment. C. gross private domestic investment. D. none of the above.

C

The purchase of a share of stock is excluded in the calculation of Gross Domestic Product​ (GDP) because it Part 2 A. is a final service and not a good. B. produces value added. C. only represents the transfer of ownership rights. D. is an intermediate good.

C

To find the U.S. dollar equivalent of a given amount of Mexican​ pesos, you would have to know Part 2 A. per capita GDP in both the United States and Mexico. B. per capita GDP in the United States. C. the foreign exchange rate between dollars and pesos. D. per capita GDP in Mexico.

C

Which of the following statements is​ TRUE? Part 2 A. The value of a​ homemaker's services is included in Gross Domestic Product​ (GDP). B. The value of intermediate goods is included in Gross Domestic Product​ (GDP). C. Gross Domestic Product​ (GDP) may be calculated using the income or the expenditure approach. D. The value of illegal activities is included in Gross Domestic Product​ (GDP).

C

If households pay​ $1,000 in interest payments and receive​ $1,200 in​ interest, wages equal​ $8,000, rental receipts on land are​ $200, total business profits before taxes are​ $2,200, depreciation is​ $1,750, and taxes unrelated to incomes net of any​ non-income-related subsidies are​ $1,000, then gross domestic income is Part 2 A. ​$11,400. B. ​$13,150. C. ​$15,350. D. ​$13,350.

D

In an​ economy, households receive a total income of​ $5 million. Of​ this, $3.5 million are wages received for labor​ services, $1 million are rental​ payments, and​ $250,000 are interest payments received. In this​ economy, what are the costs of production and profits equal to​ respectively? Part 2 A. ​$5 million;​ $500,000 B. ​$7.25 million;​ $250,000 C. ​$7.75 million;​ $0 D. ​$5 million;​ $250,000

D

Which of the following would be included in the calculation of Gross Domestic Product​ (GDP)? Part 2 A. the value of the sale of 200 shares of Alphabet stock B. the value of transfer payments C. the value of the sale of a used guitar D. the value of spending on a truck

D

The nominal GDP for 2020 is Part 2 A. ​$5,677.5 billion. B. ​$4,091.3 billion. C. ​$4,819.6 billion. D. Uncertain without more information.

A

Quiz:Chapter 8 Quiz Question 12 of 20 This quiz: 20 point(s) possible This question: 1 point(s) possible Submit quiz Question content area Part 1 Which of the following is a significant weakness of GDP as a measure of the​ nation's economic​ performance? Part 2 A. GDP excludes the secondhand good market because it is impossible to obtain an estimate of the amount sold. B. GDP considers product and factor markets but not services. C. GDP excludes nonmarket​ production, such as black market activities. D. GDP excludes the value of the buying and selling of securities.

C

Which of the following is consistent with the circular flow of​ income? I. Goods and services flow in one direction. II. Payments and incomes flow in one direction. III. Sellers receive less than what buyers spend. Part 2 A. I only B. II only C. III only D. Both I and II

D

In the circular​ flow, ________ provide the factor services. Part 2 A. businesses B. businesses and households C. households D. producers

In the circular​ flow, ________ provide the factor services. Part 2 A. businesses B. businesses and households C. households D. producers