Question 1

Exhibit 7-3
 
-Refer to Exhibit 7-3.Net exports is equal to

Accepted Answer

A)   $200.
B)   -$200.
C)   $600.
D)   -$1,400.
E)   $1,400F) All of the above
G) B) and E)

Question 2

Net domestic product is the total value of

Accepted Answer

A)   all final goods and services produced within a country's borders in a year.
B)   only intermediate goods produced within a country's borders in a year.
C)   all final goods and services produced within a country's borders in a year minus gross private domestic investment.
D)   only intermediate goods produced within a country's borders in a year plus gross private domestic investment.
E)   all final goods and services produced within a country's borders in a year minus capital consumption allowance.F) A) and B)
G) C) and D)

Question 3

Exhibit 7-5
Economic Data for Country Z
 
-Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 2 and year 3?

Accepted Answer

A)   -3.0%
B)   2.6%
C)   14.0%
D)   -2.2%E) A) and D)
F) A) and C)

Question 4

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

Accepted Answer

A)   No,since data on services and prices are missing.
B)   No,since data on inventory investment are missing.
C)   No,since data on inventory investment and services are missing.
D)   No,since data on services are missing.
E)   Yes.F) B) and D)
G) B) and C)

Question 5

For economists trying to determine peoples' preferences,observing how people act is more important than what people say in surveys.

Accepted Answer

A) True 
 B)False

Question 6

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

Accepted Answer

A)   the Netherlands;New Zealand;the United States.
B)   the Netherlands;Australia;Switzerland.
C)   the United States;the United States;the United States.
D)   Austria;Australia;New Zealand.E) A) and D)
F) B) and C)

Question 7

Look at the following data: personal income = $4,900 billion;personal taxes = $900 billion;transfer payments = $980 billion.What is disposable income?

Accepted Answer

A)   $3,200 billion
B)   $4,000 billion
C)   $4,980 billion
D)   $1,880 billion
E)   There is not enough information to answer the question.F) A) and E)
G) A) and B)

Question 8

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

Accepted Answer

A)   It had no impact on GDP.
B)   GDP increased by $300.
C)   GDP increased by $20,000.
D)   GDP increased by $19,700.
E)   GDP increased by $20,300.F) B) and E)
G) D) and E)

Question 9

Exhibit 7-4
Economic Data for Country A
 
-Refer to Exhibit 7-4.Did Country A experience a recession (based on the standard definition) in 2012?

Accepted Answer

A)   Yes,because Real GDP declined during two consecutive quarters in 2012
B)   No,because Real GDP did not decline during three consecutive quarters in 2012.
C)   Yes,because Real GDP was lower at the end of the year than it was at the beginning of the year.
D)   This information cannot be determined because the determination of a recession is based upon GDP not Real GDP.E) B) and D)
F) B) and C)

Question 10

List and explain the two different approaches used to measure GDP.

Accepted Answer

The two different approaches are: the ex...

Question 11

Underground activities are not counted in GDP because

Accepted Answer

A)   some underground activities are illegal and the government doesn't want to place,for instance,drug dealers on an equal footing with small businesses.
B)   there are no written records of underground activities.
C)   of a decision made in the 1930s and no one has gotten around to changing it yet.
D)   although it is possible to accurately measure underground activities,it is harder than measuring above-ground activities because with the latter,one doesn't have to dig as deep.E) A) and D)
F) A) and B)

Question 12

In 1820,the country with the highest per capita GDP was

Accepted Answer

A)   Australia.
B)   the United States.
C)   Austria.
D)   Germany.
E)   the Netherlands.F) B) and C)
G) A) and B)

Question 13

Which of the following is the correct equation for computing personal income?

Accepted Answer

A)   Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments.
B)   Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments
C)   Personal income = National income - taxes
D)   Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments
E)   none of the aboveF) A) and C)
G) All of the above

Question 14

Sales tax is an example of an indirect business tax.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is false?

Accepted Answer

A)   Domestic income is the total income earned by the people and businesses within a country's borders.
B)   National income is the total income earned by U.S.citizens and businesses,no matter where they reside or are located.
C)   Corporate profits is the largest component of national income.
D)   National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest.E) A) and B)
F) All of the above

Question 16

Exhibit 7-1
 
-Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

Accepted Answer

A)   GDP - $222
B)   GDP - $331
C)   GDP - $412
D)   GDP - $295
E)   GDP + $134F) A) and B)
G) A) and E)

Question 17

Net interest is the interest paid out by US households and government minus the interest income they received.

Accepted Answer

A) True 
 B)False

Question 18

You have data for compensation of employees,proprietors' income,rental income,and net interest.Can you compute national income?

Accepted Answer

A)   Yes.
B)   No,since data on indirect business taxes are missing.
C)   No,since data on corporate profits is missing.
D)   No,since data on the capital consumption allowance is missing.
E)   No,since net interest has not been adjusted for profits.F) A) and C)
G) A) and B)

Question 19

Net domestic product (NDP)is the total value of new goods available in the economy after worn out capital goods have been replaced.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 7-1
 
-Refer to Exhibit 7-1.What is the value of net domestic product?

Accepted Answer

A)   $5,840
B)   $5,731
C)   $5,650
D)   $5,767
E)   $6,637F) A) and C)
G) A) and E)

Exam 7: Macroeconomic Measurements, Gdp and Real Gdp

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

Correct AnswerverifiedShow Answer

List and explain the two different approaches used to measure GDP.

Correct AnswerverifiedThe two different approaches are: the ex...View AnswerShow Answer

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of net domestic product?

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Sales tax is an example of an indirect business tax.

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Net domestic product (NDP)is the total value of new goods available in the economy after worn out capital goods have been replaced.

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Which of the following is the correct equation for computing personal income?

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Underground activities are not counted in GDP because

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Exhibit 7-3 -Refer to Exhibit 7-3.Net exports is equal to

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Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 2 and year 3?

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For economists trying to determine peoples' preferences,observing how people act is more important than what people say in surveys.

Correct AnswerverifiedShow Answer

Net interest is the interest paid out by US households and government minus the interest income they received.

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Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

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In 1820,the country with the highest per capita GDP was

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You have data for compensation of employees,proprietors' income,rental income,and net interest.Can you compute national income?

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Exhibit 7-4 Economic Data for Country A -Refer to Exhibit 7-4.Did Country A experience a recession (based on the standard definition) in 2012?

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Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

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Exhibit 7-1 -Refer to Exhibit 7-1.Which of the following summations represents net domestic product?

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Which of the following statements is false?

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Look at the following data: personal income = $4,900 billion;personal taxes = $900 billion;transfer payments = $980 billion.What is disposable income?

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Net domestic product is the total value of

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In 1820 the country with the highest per capita GDP was ____________.In 1900 the country that ranked #1 in terms of per capita GDP was _ and fifty years later the top ranking was held by _________________.

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