ECON

In the economy of Qonos in 2082 exports were $886, GDP was $7,489, imports were $969, government spending was $1,856 and consumption was $2,053. What was Qonos's investment in 2082?

3,663

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

$65,000

At the end of 2012 the prestigious Rolex watch manufacturer had in inventory of watches worth $753 dollars. In 2013, Rolex produced $456 worth of watches and sold $488. What was the change in inventories in 2013? (hint: careful with the signs, remember that this number can be positive or negative).

-32

A U.S.-owned car factory in Mexico produces $5 million of cars. $2.5 million of these cars are sold in Mexico and the other $2.5 million are sold in the U.S. In both cases $1 million of the value of the cars was due to U.S-owned equipment located in Mexico and U.S. managers working in Mexico. How much did this production contribute to U.S. GDP?

0

Assume that you live in The Woodlands, Texas and you buy a BMW produced in Germany for $79,509. What is the change in U.S. GDP because of your purchase of this car? (assume there was no taxes, dealership fees or transportation costs, just the cost of the car).

0

Volkswagen company is Germany own company with a massive factory in Mexico. In 2013, the Volkswagen Mexican factory produced $321 worth of cars and sold $88 to the U.S., $91 to Mexico, and $46 to Germany. How much was added to Gemany's GDP?

0

Dr. Gonzalez has retired and it is living at farm where he grows grapes. In 2030, he produced $171 worth of grapes. He sold $46 worth of grapes to a winery nearby and they will be used to produce wine. The remaining grapes were sold to John, Dana and Camila, who will eat them at dinner. These two sales of grapes contributed how much to GDP?

125

In the economy of Talikastan in 2015, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $1000, and investment was $1000. What were Talikastan's exports in 2015?

1500

If the GDP per capita of Switzerplace is $521 and the population is 37,752 people. What is the GDP of Switzerplace?

19,668,792.00

In the economy of Qonos in 2102 investment was $1,368, GDP was $7,768, government spending was $1,855 and consumption was $1,979. What was Qonos's net exports in 2102?

2,566

In the economy of Vulcan in 2065 exports were $317, GDP was $5,998, Government Spending was $2,585, Investment was $627 and Imports were $319. What was Vulcan's consumption in 2065?

2,788

Tim mows the yard for his neighbors (this is a formal business Tim runs). He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

20

An American soldier stationed in North Carolina receives a paycheck from the federal government for $300, which she uses to purchase a $100 MP3 player made in China by a Chinese firm and $200 for fruit and vegetables from a local farmers market. As a result, U.S. GDP increases by

200

At the end of 2012 the prestigious Rolex watch manufacturer had in inventory of watches worth $552 dollars. In 2013, Rolex produced $495 worth of watches and sold $279. What was the change in inventories in 2013? (hint: careful with the signs, remember that this number can be positive or negative).

216

Dr. Gonzalez has retired and it is living at farm where he grows grapes. In 2030, he produced $268 worth of grapes. He sold $47 worth of grapes to a winery nearby and they will be used to produce wine. The remaining grapes were sold to John, Dana and Camila, who will eat them at dinner. These two sales of grapes contributed how much to GDP?

221

Dr. Gonzalez has retired and it is living at farm where he grows grapes. In 2030, he produced $101 worth of grapes. He sold $76 worth of grapes to a winery nearby and they will be used to produce wine. The remaining grapes were sold to John, Dana and Camila, who will eat them at dinner. These two sales of grapes contributed how much to GDP?

25

In 2013, the furniture store PB produced 12 mahogany desks. One of them is sold to Jeanine for $2,862, later that same year Jeanine sold the desk to Pamela for $1,618. The remaining desks were not sold to anyone that year and stay in PB's inventory at a value of $2,117 for each desk. How much was added to GDP from the previouslt mentioned transactions?

26,149

The GDP of Brazilia is $9,145,216 and the GDP of Geo is $515,853. Moreover, the population of Brazilia is 16,637 and the population of Geo is 3,003 more people than Brazilia. What is the GDP per capita of Geo?

26.27

A farmer sells 67 pounds of pecans to a Smith's Fresh Pecans for $5.5. Smith's Fresh Pecans resells 26 pounds for $42 per pound. The remaining pecans are shelled and canned and sold for a total of $50.9 per pound. Taking these transactions into account, how much is added to GDP?

3,178.90

If the GDP per capita of Switzerplace is $583 and the population is 690 people. The GDP per capita of Madagas is $844 but it has 81 more people than Switzerplace. What is the GDP of Madagas?

650,724.00

When an American household purchases a bottle of Italian wine for $100,

U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.

When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,

U.S. consumption increases by $500, U.S. net exports decline by $500, and U.S. GDP remains the same.

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then

U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected.

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

U.S. consumption purchases increase by $200 and U.S. GDP increases by $200.

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result

U.S. investment and GDP increase, but German GDP is unaffected.

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

U.S. investment and GDP increase, but German GDP is unaffected.

If a U.S. citizen buys a television made in Korea by a Korean firm, then

U.S. net exports decrease and U.S. GDP is unaffected.

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes

a positive contribution both to investment and to GDP.

A form of government spending that is not made in exchange for a currently produced good or service is called

a transfer payment.

Which of the following is a way to compute GDP?

add up the market values of all final goods and services

In a simple circular-flow diagram, total income and total expenditure are

always equal because every transaction has a buyer and a seller.

Expenditures on a nation's domestic production

are equal to its domestic production.

GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is

b. GDP per person.

Gasoline is considered a final good if it is sold by a

gasoline station to a motorist in Los Angeles.

Which of the following items is included in U.S. GDP?

goods produced by foreign citizens working in the United States

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

government expenditures and imports.

A transfer payment is a payment made by

government, but not in exchange for a currently produced good or service.

In the actual economy, goods and services are purchased by

households, firms, and the government.

Goods that go into inventory and are not sold during the current period are

included in current period GDP as change in inventory under the investment part

Consumer goods that are produced, go into inventory, and are not sold during the current period are

included in current period GDP as inventory investment.

During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is

included in the current quarter GDP as investment.

Darla, a Canadian citizen, only works in the United States. The value of her production is

included only in U.S. GDP.

U.S. GDP

includes production of foreigners working in the U.S. but excludes production by U.S. residents working in foreign countries.

In the GDP accounts production equals

income

If an economy's GDP falls, then it must be the case that the economy's

income and expenditure both fall.

If an economy's GDP rises, then it must be the case that the economy's

income and expenditure both rise.

Gross domestic product measures

income and expenditures.

Over the last few decades Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself,

increased GDP.

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

increased measured GDP by the value added by the restaurant's preparation and serving of the meals.

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

increases by $220.

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

investment

Income generated by a nation's domestic production

is equal to its domestic production.

We care about GDP because

it is a measure of production

The relationship between GDP and life expectancy is important because

it tells us that GDP is a good proxy for living standard or well being

Government purchases include spending on goods and services by

local, state and federal governments.

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

market prices.

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

market prices.

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. This move

necessarily raises GDP.

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

nominal GDP but not real GDP.

Which of the following always uses prices and quantities from the same period?

nominal GDP but not real GDP.

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

not included in current GDP because GDP only measures the value of goods and services produced in the current year.

An Italian company opens a pasta company in the U.S. The production from this pasta company are included in

only U.S. GDP

Changes in real GDP reflect

only changes in the amounts being produced.

Real GDP will increase

only when output increases.

Which of the following transactions is not included in GDP?

oranges sold by a farmer to a grocery store.

GDP is important because it is

positively related to happiness

Nominal GDP will definitely increase when

prices increase and output increases.

In a simple circular-flow diagram, firms

purchase resources from households.

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

raises GDP.

If total spending rises from one year to the next, then which of the following could not be true?

the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.

Total income from the domestic production of final goods and services equals

the expenditures for these goods whoever buys them.

Which of the following is the correct definition of GDP?

the market value of all final goods and services produced within a country in a given period of time

For an economy as a whole,

the market value of production must equal expenditure.

Which of the following is included in government purchases?

the services of a U.S. government attorney valued at the cost of her salary

If net exports is a negative number for a particular year, then

the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

$1200

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

$250 to GDP.

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $8000, government purchases were $1200, and imports were $600. What was Talikastan's investment in 2015?

$3200

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP?

$4 million

Dr. Gonzalez has retired and it is living at farm where he grows grapes. In 2030, he produced $233 worth of grapes. He sold $32 worth of grapes to John, Dana and Camila, who will eat the grapes at dinner. The remaining grapes were sold to a winery nearby and they will be used to produce wine. These two sales of grapes contributed how much to GDP?

32

In the economy of Qonos in 2082 exports were $657, GDP was $8,335, imports were $971, government spending was $1,957 and consumption was $2,408. What was Qonos's investment in 2082?

4,284

In the economy of Qonos in 2082 exports were $691, GDP was $8,516, imports were $1,454, government spending was $2,292 and consumption was $2,475. What was Qonos's investment in 2082?

4,512

In the economy of Vulcan in 2063 Consumption was $1,968, Investment was $1,874, Government Spending was $870, Exports were $265 and Imports were $243. What was Vulcan's GDP in 2063?

4,734

In the economy of Vulcan in 2063 Consumption was $1,567, Investment was $1,850, Government Spending was $1,456, Exports were $307 and Imports were $299. What was Vulcan's GDP in 2063?

4,881

The GDP of Brazilia is $6,151,953 and the GDP of Geo is $657,922. Moreover, the population of Brazilia is 15,137 and the population of Geo is 4,632 more people than Brazilia. What is the GDP per capita of the country with the lowest population?

406.42

The GDP of Brazilia is $8,396,571 and the GDP of Geo is $545,150. Moreover, the population of Brazilia is 7,008 and the population of Geo is 5,421 more people than Brazilia. What is the GDP per capita of the country with highest population?

43.86

At the end of 2012 the prestigious Rolex watch manufacturer had in inventory of watches worth $405 dollars. In 2013, Rolex produced $433 worth of watches and sold $389. What was the change in inventories in 2013? (hint: careful with the signs, remember that this number can be positive or negative).

44

In the economy of Qonos in 2067 exports were $804, GDP was $8,895, imports were $1,429, investment was $1,525 and consumption was $2,468. What was Qonos's government spending in 2067?

5,527

If the GDP per capita of Switzerplace is $8,625 and the population is 5,393 people. The GDP per capita of Madagas is $315 more than that of Switzerplace and also has 456 more people than Switzerplace. What is the GDP of Madagas?

52,290,060

If the GDP per capita of Switzerplace is $331 and the population is 578 people. The GDP per capita of Madagas is $839 but it has 89 more people than Switzerplace. What is the GDP of Madagas?

559,613

If the GDP per capita of Switzerplace is $430 and the population is 688 people. The GDP per capita of Madagas is $808 but it has 52 more people than Switzerplace. What is the GDP of Madagas?

596,304

If the GDP per capita of Switzerplace is $9,772 and the population is 6,409 people. The GDP per capita of Madagas is $516 more than that of Switzerplace and also has 394 more people than Switzerplace. What is the GDP of Madagas?

69,989,264.00

In the economy of Talikastan in 2015, consumption was $3000, exports were $1200, GDP was $6300, government purchases were $1300, and investment was $1500. What were Talikastan's imports in 2015?

700

Santiago is from Spain but lives in Texas. Ryan is from England but he lives in Arizona. A car dealer in Texas buys a new BMW from a BMW factory in Arizona for $55,277 and later sells the new BMW to the final buyer, who is Santiago for $73,740. Later that same year, Santiago sells the now used BMW to Ryan in Arizona for $54,600. How much was contributed to US GDP from all these transactions?

73,740

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

75

Santiago is from Spain but lives in Texas. Ryan is from England but he lives in Arizona. A car dealer in Texas buys a new BMW from a BMW factory in Arizona for $45,535 and later sells the new BMW to the final buyer, who is Santiago for $79,745. Later that same year, Santiago sells the now used BMW to Ryan in Arizona for $47,998. How much was contributed to US GDP from all these transactions?

79,745

In a simple circular-flow diagram, firms use the money they get from a sale to

All of the above are correct.

When an Egyptian firm purchases a cement mixer from Slovakia,

Egyptian investment increases, Egyptian net exports decrease, Egyptian GDP is unaffected, Slovakian net exports increase, and Slovakian GDP increases.

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Ellen's but not Sam's.

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread. Wholesome Wheat sells the bread to the public for $22.00. Taking these two transactions into account, what is the effect on GDP?

GDP increases by $22.00

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

GDP increases by $5.00

Which of the following statements about GDP is correct?

GDP is to a nation's economy as household income is to a household.

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Mexican GDP, but it is not included in U.S. GDP.

Which of the following statements about GDP is correct?

Nominal GDP values production at current prices, whereas real GDP values production at constant prices.

Ralph pays a formal company to mow his lawn. Norton mows his own lawn.

Only what Ralph pays to have his lawn mowed is included in GDP.

Which of the following statements about nominal GDP and real GDP is correct?

Real GDP is a better gauge of economic well-being than nominal GDP.

Which of the following examples of production of goods and services would be included in U.S. GDP?

Sally, a Canadian citizen, works on a drilling crew in North Dakota for Northland Gas Services, and Northland sells the natural gas to a utility company in Canada.

The U.S. government pays an economist at the U.S. Department of Commerce $100,000 in salary in 2013. The economist then retires. In 2014, the government pays him $60,000 in Social Security benefits. Which of the following is correct?

The 2013 payment is included in 2013 GDP as government purchases, but the 2014 payment is not included in 2014 GDP.

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000. In 2014 she sold the house for $260,000. Which of the following statements is correct regarding the sale of the house?

The 2014 sale affected neither 2014 GDP nor 2011 GDP.

GDP data shows that in the third quarter of 2008 U.S. GDP was about $14.4 trillion dollars. This number reflects

The amount of GDP produced from the third quarter of 2007 to the third quarter of 2008.

Which of the following represents a transfer payment?

The government sends your grandfather his Social Security check.

Which of the following is correct?

The value of intermediate goods are not included in GDP.

Changes in nominal GDP reflect

both changes in prices and changes in the amounts being produced.

According to the circular-flow diagram, GDP

can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.

According to the circular-flow diagram GDP

can be computed as the total income paid by firms or as expenditures on final goods and services.

Real GDP is the yearly production of final goods and services valued at

constant prices.

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

consumption and imports

The Carters' oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as

consumption of services.

Household spending on education is included in

consumption, although it might be argued that it would fit better in investment.

The consumption component of GDP includes spending on

durable goods, nondurable goods, and services.

If total spending rises from one year to the next, then

either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both.

For an economy as a whole, income must equal expenditure because

every dollar of spending by some buyer is a dollar of income for some seller.

GDP

excludes the value of intermediate goods because their value is already counted in the value of final goods.

For the economy as a whole,

expenditure must equal income.

Net exports equal

exports minus imports.

Government purchases include spending on goods and services by

federal, state, and local governments.

A stove is produced by a firm in 2014, added to the firm's inventory in 2014, and sold to a household in 2015. It follows that

the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP.

If you buy a burger and fries at your favorite fast food restaurant,

then both GDP and consumption spending will be higher.

Which of the following is not included in US GDP?

unpaid cleaning and maintenance of houses

GDP is defined as the

value of all final goods and services produced within a country in a given period of time.

Investment tends to be

very volatile because it depends on expected future profits of the firms