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Exam 10: Measuring a Nations Income

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Question 151

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GDP

A) is used to monitor the performance of the overall economy but is not the single best measure of a society's economic well-being.
B) is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.
C) is not used to monitor the performance of the overall economy but is the single best measure of a society's economic well-being.
D) is not used to monitor the performance of the overall economy and is not the single best measure of a society's economic well-being.

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Question 152

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Table 10-4 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.Prices and Quantities $\begin{array} { c c c c c } \text { Year } & \text { Price af Cereal } & \begin{array} { c } \text { Quantity af } \\\text { Cereal }\end{array} & \text { Price af Millz } & \begin{array} { c } \text { Quantity df } \\\text { Mill }\end{array} \\\hline 2008 & \$ 4.00 & 90 & \$ 1.50 & 150 \\2009 & \$ 4.00 & 100 & \$ 2.00 & 180 \\2010 & \$ 5.00 & 120 & \$ 2.50 & 200 \\2011 & \$ 6.00 & 150 & \$ 3.50 & 200\end{array}$ -Refer to Table 10-4. In 2011, this country's

A) real GDP was $900, and the GDP deflator was 150.2.
B) real GDP was $900, and the GDP deflator was 177.8.
C) real GDP was $1065, and the GDP deflator was 177.8.
D) real GDP was $1065, and the GDP deflator was 150.2.

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Question 153

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Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct?

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

Unemployment compensation is

In 2009, Corny Company grows and sells $2 million worth of corn to Tasty Cereal Company, which makes corn flakes. Tasty Cereal Company produces $6 million worth of corn flakes in 2009, with sales to households during the year of $4.5 million. The unsold $1.5 million worth of corn flakes remains in Tasty Cereal Company's inventory at the end of 2009. The transactions just described contribute how much to GDP for 2009?

The information below for 2008 in millions was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest? $\begin{array} { | l | l | l | l | } \hline \text { Country } & \text { GDP (Constant US\$) } & \text { GDP(Current US\$) } & \text { Population } \\\hline \text { Ghana } & 7,690 & 16,653 & 23.35 \\\hline \text { Kenya } & 17,569 & 30,354 & 38.76 \\\hline \text { Tanzania } & 15,394 & 20,490 & 41.276 \\\hline\end{array}$

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

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

After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. These purchases of goods and services are

Most goods whose purchases are included in the investment component of GDP are used to produce other goods.

Which of the following is included in GDP?

While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators.

Table 10-1 The table below contains data for country A for the year 2010. $\begin{array}{|l|l|}\hline \text { Household purchases of durable goods } & \$ 1293 \\\hline \text { Household purchases of nondurable goods } & \$ 1717 \\\hline \text { Household purchases of services } & \$ 301 \\\hline \text { Household purchases of new housing } & \$ 704 \\\hline \text { Purchases of capital equipment } & \$ 310 \\\hline \text { Inventory changes } & \$ 374 \\\hline \text { Purchases of new structures } & \$ 611 \\\hline \text { Depreciation } & \$ 117 \\\hline \text { Salaries of government workers } & \$ 1422 \\\hline \text { Government expenditures on public works } & \$ 553 \\\hline \text { Transfer payments } & \$ 777 \\\hline \text { Foreign purchases of domestically produced goods } & \$ 88 \\\hline \text { Domestic purchases of foreign goods } & \$ 120 \\\hline\end{array}$ -Refer to Table 10-1. What was country A's investment in 2010?

Which of the following domestically produced items is not included in GDP?

In the economy of Ukzten in 2010, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $2000, and investment was $1000. What were Ukzten's exports in 2010?

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

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

Economists use the term inflation to describe a situation in which the economy's overall production level is rising.

Table 10-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.Prices and Quantities $\begin{array} { c c c c c } \text { Year } & \text { Price of } & \text { Quantity af } & \text { Price af } & \text { Quantity af } \\& \text { Waffles } & \text { Waffles } & \text { Pancalkes } & \text { Pancalkes } \\\hline 2008 & \$ 2.00 & 100 & \$ 1.00 & 100 \\2009 & \$ 2.00 & 120 & \$ 2.00 & 150 \\2010 & \$ 2.00 & 150 & \$ 3.00 & 200 \\2011 & \$ 4.00 & 180 & \$ 3.00 & 220\end{array}$ -Refer to Table 10-6. From 2010 to 2011, this country's output grew