Question 1

Excluding household and underground production leads to

Accepted Answer

A)   underestimation of real GDP but not nominal GDP.
B)   overestimation of real GDP but not nominal GDP.
C)   overestimation of both real GDP and nominal GDP.
D)   underestimation of both real GDP and nominal GDP.
E)   underestimation of real GDP an an overestimation of nominal GDP.

Question 2

Data for 2009 Data for 2010
   Item 	ext { Item } Item  
  Bread 	ext { Bread } Bread  
  Soda 	ext { Soda } Soda   
   Quantity  Price  Quantity  Price 50$4.0070$3.0050$5.0050$6.00\begin{array}{cccc}	ext { Quantity } & 	ext { Price } & 	ext { Quantity } & 	ext { Price } \\hline 50 & \$ 4.00 & 70 & \$ 3.00 \50 & \$ 5.00 & 50 & \$ 6.00\end{array} Quantity 5050​ Price $4.00$5.00​ Quantity 7050​ Price $3.00$6.00​​ 
-The table above gives the production and prices for a small nation that produces only bread and soda.The base year is 2010.What is real GDP in 2010?

Accepted Answer

A)   $530
B)   $1080
C)   $510
D)   $210
E)   $300

Question 3

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion.Hence total expenditure was

Accepted Answer

A)   $24.5 billion.
B)   $34.5 billion.
C)   $36.5 billion.
D)   $34 billion.
E)   undetermined without information about imports.

Question 4

Investment is defined as

Accepted Answer

A)   the purchase of a stock or bond.
B)   financial capital.
C)   what consumers do with their savings.
D)   the purchase of new capital goods by firms.
E)   spending on capital goods by governments.

Question 5

Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and imports of goods and services from foreigners is $1.5 million.Calculate this nation's GDP.

Accepted Answer

The nation's GDP equals the sum of consu...

Question 6

In 2009 in the United States, consumption expenditure was $9,996 billion, investment was $1,559 billion, government expenditures on goods and services were $2,927 billion, and total exports were $1,492 billion.GDP equaled

Accepted Answer

A)   $12,641 billion.
B)   $10,120 billion.
C)   $11,488 billion.
D)   $14, 415 billion.
E)   some amount, but there is not enough information given to calculate GDP.

Question 7

What are the categories of expenditure used in the expenditure approach to measuring GDP?

Accepted Answer

There are four expenditure categories.Th...

Question 8

You hire some of your friends to help you move to a new house.You pay them a total of $200 and buy them dinner at Pizza Hut.Which of the following is true?

Accepted Answer

A)   The $200 should be counted as part of GDP but not the dinner at Pizza Hut.
B)   If your friends do not report the $200 on their tax forms, it becomes part of the underground economy.
C)   The dinner at Pizza Hut should be counted as part of GDP but not the $200.
D)   Hiring your friends is an illegal activity and should not be counted in GDP.
E)   Neither the $200 nor the dinner should be counted in GDP because both are household production.

Question 9

Which of the following is NOT included in the expenditure approach to calculating GDP?

Accepted Answer

A)   government expenditures on goods and services
B)   investment
C)   net exports of goods and services
D)   wages
E)   consumption expenditure

Question 10

Last year for a nation to the south, net domestic product at factor cost equaled $3,300 billion.Indirect taxes minus subsidies equaled $200 billion, depreciation equaled $800 billion, the statistical discrepancy equaled zero, and net operating surplus equaled $150 billion.The country's GDP was

Accepted Answer

A)   $2,300 billion.
B)   $3,500 billion.
C)   $4,300 billion.
D)   $4,450 billion.
E)   $4,150 billion.

Question 11

What is the Human Development Index?

Accepted Answer

The Human Development Index, or HDI, has...

Question 12

Total expenditure equals

Accepted Answer

A)   C + I + G + NX.
B)   C + I + G - NX.
C)   C + I - G + NX.
D)   C - I + G + NX.
E)   C - I - G - NX.

Question 13

The purchase of 500 shares of Honda stock by the California State Employees' Pension fund

Accepted Answer

A)   is counted as consumption expenditure.
B)   is not counted as part of GDP.
C)   is counted as investment in the GDP accounts.
D)   is counted as part of export expenditure in the GDP accounts because Honda is a foreign firm.
E)   Is counted as part of import expenditure in the GDP accounts because Honda is a foreign firm.

Question 14

The Human Development Index was proposed because

Accepted Answer

A)   people confuse nominal GDP and real GDP.
B)   nominal GDP and real GDP are subjective measures.
C)   of the limitations of real GDP as a measure comparing the standard of living in different nations.
D)   the GDP deflator changes if the base year is changed.
E)   different nations have different populations.

Question 15

If nominal GDP increases from one year to the next, then

Accepted Answer

A)   production must have increased.
B)   production could have increased, decreased, or stayed the same.
C)   prices must have increased.
D)   prices and production must both have increased.
E)   prices and production must both have decreased.

Question 16

Are stocks and bonds considered part of the investment component of GDP?

Accepted Answer

No, stocks and bonds are not part of the...

Question 17

Which of the following is true regarding the measurement of GDP?

Accepted Answer

A)   Wages and profit income are used in the income approach to GDP.
B)   Wages and consumption are used in the expenditure approach to GDP.
C)   Consumption and investment are used in the income approach to GDP.
D)   Government expenditure is only counted in the income approach to GDP.
E)   Investment and wages are expenditures , and are therefore are used in the expenditure approach to GDP.

Question 18

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Accepted Answer

A)   decreased by the estimated value of the pollution's harm.
B)   not affected by the estimated value of the pollution's harm.
C)   increased by the estimated value of the pollution's harm.
D)   changed by the pollution only when comparing its GDP with the U.S.GDP.
E)   None of the above answers is correct.

Question 19

The sum of all the income categories listed in the National Income and Product Accounts adds up to

Accepted Answer

A)   gross domestic product.
B)   net national product.
C)   disposable income after taxes.
D)   net domestic product at factor cost.
E)   gross national product.

Question 20

Net exports of goods and services are defined as the

Accepted Answer

A)   value of the goods we sell to foreigners.
B)   income we receive from selling goods to foreigners.
C)   value of exports minus the value of imports.
D)   value of exports minus the income we receive from foreigners.
E)   value of exports plus the income we receive from foreigners.

Exam 5: Gdp: a Measure of Total Production and Income

Investment is defined as

Correct Answer
verified

Which of the following is NOT included in the expenditure approach to calculating GDP?

Correct Answer
verified

What is the Human Development Index?

Correct Answer
verified
The Human Development Index, or HDI, has...
View Answer

The purchase of 500 shares of Honda stock by the California State Employees' Pension fund

Correct Answer
verified

Net exports of goods and services are defined as the

Correct Answer
verified

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Correct Answer
verified

Excluding household and underground production leads to

Correct Answer
verified

The sum of all the income categories listed in the National Income and Product Accounts adds up to

Correct Answer
verified

Which of the following is true regarding the measurement of GDP?

Correct Answer
verified

In 2009 in the United States, consumption expenditure was $9,996 billion, investment was $1,559 billion, government expenditures on goods and services were $2,927 billion, and total exports were $1,492 billion.GDP equaled

Correct Answer
verified

If nominal GDP increases from one year to the next, then

Correct Answer
verified

Correct Answer
verified
The nation's GDP equals the sum of consu...
View Answer

What are the categories of expenditure used in the expenditure approach to measuring GDP?

Correct Answer
verified
There are four expenditure categories.Th...
View Answer

Are stocks and bonds considered part of the investment component of GDP?

Correct Answer
verified
No, stocks and bonds are not part of the...
View Answer

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion.Hence total expenditure was

Correct Answer
verified

Last year for a nation to the south, net domestic product at factor cost equaled $3,300 billion.Indirect taxes minus subsidies equaled $200 billion, depreciation equaled $800 billion, the statistical discrepancy equaled zero, and net operating surplus equaled $150 billion.The country's GDP was

Correct Answer
verified

Total expenditure equals

Correct Answer
verified

Correct Answer
verified

The Human Development Index was proposed because

Correct Answer
verified

You hire some of your friends to help you move to a new house.You pay them a total of $200 and buy them dinner at Pizza Hut.Which of the following is true?

Correct Answer
verified

Exam 5: Gdp: a Measure of Total Production and Income

Investment is defined as

Correct AnswerverifiedShow Answer

Which of the following is NOT included in the expenditure approach to calculating GDP?

Correct AnswerverifiedShow Answer

What is the Human Development Index?

Correct AnswerverifiedThe Human Development Index, or HDI, has...View AnswerShow Answer

The purchase of 500 shares of Honda stock by the California State Employees' Pension fund

Correct AnswerverifiedShow Answer

Net exports of goods and services are defined as the

Correct AnswerverifiedShow Answer

Mexico City is notorious for its excessive pollution.Mexico's measure of GDP is

Correct AnswerverifiedShow Answer

Excluding household and underground production leads to

Correct AnswerverifiedShow Answer

The sum of all the income categories listed in the National Income and Product Accounts adds up to

Correct AnswerverifiedShow Answer

Which of the following is true regarding the measurement of GDP?

Correct AnswerverifiedShow Answer

In 2009 in the United States, consumption expenditure was $9,996 billion, investment was $1,559 billion, government expenditures on goods and services were $2,927 billion, and total exports were $1,492 billion.GDP equaled

Correct AnswerverifiedShow Answer

If nominal GDP increases from one year to the next, then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe nation's GDP equals the sum of consu...View AnswerShow Answer

What are the categories of expenditure used in the expenditure approach to measuring GDP?

Correct AnswerverifiedThere are four expenditure categories.Th...View AnswerShow Answer

Are stocks and bonds considered part of the investment component of GDP?

Correct AnswerverifiedNo, stocks and bonds are not part of the...View AnswerShow Answer

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion.Hence total expenditure was

Correct AnswerverifiedShow Answer

Last year for a nation to the south, net domestic product at factor cost equaled $3,300 billion.Indirect taxes minus subsidies equaled $200 billion, depreciation equaled $800 billion, the statistical discrepancy equaled zero, and net operating surplus equaled $150 billion.The country's GDP was

Correct AnswerverifiedShow Answer

Total expenditure equals

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Human Development Index was proposed because

Correct AnswerverifiedShow Answer

You hire some of your friends to help you move to a new house.You pay them a total of $200 and buy them dinner at Pizza Hut.Which of the following is true?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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verified
The Human Development Index, or HDI, has...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
The nation's GDP equals the sum of consu...
View Answer

Correct Answer
verified
There are four expenditure categories.Th...
View Answer

Correct Answer
verified
No, stocks and bonds are not part of the...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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