SELF QUIZ UNIT 1

Refer to the table above. The nominal GDP for Tyrovia for 2021 equals a. $1,140. b. $880 c. $690 d. $560

a. $1,140.

Gross domestic product is calculated by summing up a.the total market value of final goods and services produced in the economy during a period of time. b.the total market value of goods and services in the economy. c.the total quantity of goods and services in the economy. d.the total quantity of goods and services produced in the economy during a period of time.

a.the total market value of final goods and services produced in the economy during a period of time.

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 a.values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. b.simply counts the total number of goods produced in the market place and then adds them up. c.simply counts the total number of goods and services produced in the marketplace and then adds them up. d.values goods at their market prices, multiplies them by the quantity produced, and then adds them up.

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

Goods Produced Product Quantity Price Shoes 40 $60.00DVDs 100 18.00Tomatoes 2,000 1.00Ketchup 400 4.00 Refer to the table above. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals a. $7,400 b. $6,800 c. $5,800 d. 2440 units

b. $6,800

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study? a.Avocado prices rise due to a late frost in California. b.Real GDP grows by 2.3% in the second quarter. c.The United Auto Workers sign a contract raising wages and benefits 7% over the next 3 years. d.Airlines raise ticket prices in response to rising fuel costs.

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

Nominal GDP will increase a.only if the quantity of final goods and services produced rises. b.if either the price level or the quantity of goods and services produced rises. c.only if the price level falls. d.only if the price level rises.

b.if either the price level or the quantity of goods and services produced rises.

Which of the following is not directly counted in GDP? a.investment expenditures b.intermediate goods c.government purchases d.consumer goods

b.intermediate goods

Real GDP will increase a.if either the price level rises or the quantity of final goods and services produced rises. b.only if the quantity of final goods and services produced rises. c.only if the price level rises. d.only if the price level falls.

b.only if the quantity of final goods and services produced rises.

Nominal GDP is GDP in a given year a.adjusted for anticipated inflation. b.valued in the prices of that year. c.adjusted for inflation. d.valued in the prices of the base year.

b.valued in the prices of that year.

Goods Produced Product Quantity Price Swearshirts 50 $35.00Dental Examinations 40 75.00Coffee Drinks 1,000 4.00 Coffee Beans 2,000 0.50 Refer to the table above. 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 coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals. a. 3090 Units b. $7250 c. $8750 d. $9750

c. $8750

Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Tyrovia Products Year Guns Produced Price of Guns Butter Produced Price of Butter 2010 80 $5 40 $42021 90 6 60 10 Refer to the table above. Real GDP for Tyrovia for 2021 using 2010 as the base year equals a. $1,140 b. $880 c. $690 d. $560

c.$690

Which of the following could cause nominal GDP to decrease, but real GDP to increase? a.The price level rises and the quantity of final goods and services produced rises. b.The price level falls and the quantity of final goods and services produced falls. c.The price level falls and the quantity of final goods and services produced rises. d.The price level rises and the quantity of final goods and services produced falls.

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

Which of the following transactions represents the purchase of a final good? a.Delta buys a new European-made jetliner. b.Apple computer buys computer processors from Intel. c.Your father buys a new John Deere riding lawn mower. d.Starbucks purchases coffee beans.

c.Your father buys a new John Deere riding lawn mower.

Real GDP is GDP in a given year a.valued in the prices of that year. b.valued in the prices of the base year. c.adjusted only for unanticipated inflation. d.adjusted only for anticipated inflation.

c.adjusted only for unanticipated inflation.

In the circular flow model, the value of total income for an economy ________ the value of total production. a.is less than b.is greater than c.equals d.may be greater than or less

c.equals

Which of the following goods is directly counted in GDP? a.the lettuce that Subway purchases for its sandwiches b.the plastic bags that Subway purchases to wrap its sandwiches c.the bread that Subway purchases for its sandwiches d.a 12-inch Subway sandwich purchased by a student

d.a 12-inch Subway sandwich purchased by a student

In the circular flow model, the value of total production for an economy ________ the value of total expenditures on final goods and services. a.is greater than b.may be greater than or less than c.is less than d.equals

d.equals

Suppose, in 2012, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for 2012? a.the value of the house in 2012 minus depreciation b.the value of the house in 2003 c.the value of the house in 2012 d.the value of the services of the real estate agent

d.the value of the services of the real estate agent