Question 1

Net national product (NNP)  is equal to:

Accepted Answer

A)   GNP minus net investment.
B)   GNP plus depreciation.
C)   GNP minus depreciation.
D)   GDP minus depreciation.E) B) and D)
F) C) and D)

Question 2

Which of the following is not included in private investment expenditure?

Accepted Answer

A)   changes in business inventories
B)   the purchase of common stock
C)   the purchase of a newly built home
D)   the purchase of a newly built factoryE) A) and C)
F) None of the above

Question 3

More abundant leisure time increases _______, but it _______ real GDP.

Accepted Answer

A)   nominal GDP; decreases
B)   economic welfare; decreases
C)   nominal GDP; leaves unchanged
D)   social welfare; decreasesE) A) and B)
F) None of the above

Question 4

In 1929- 1933, the U.S. experienced unemployment rates exceeding _______.

Accepted Answer

A)   50 percent
B)   25 percent
C)   90 percent
D)   33 percentE) All of the above
F) A) and B)

Question 5

Suppose you buy a $40,000 BMW from your local dealership. The car was built completely in Germany. Assuming no dealer mark- up on the car, how would your purchase be recorded in US GDP accounts? By how much would US GDP increase as a result of your purchase?

Accepted Answer

Your purchase increases Consumption Expe...

Question 6

Which of the following is included in both the U.S. GDP and GNP?

Accepted Answer

A)   the value of all cars produced by Toyota in the U.S.
B)   the value of all cars produced by Ford in Mexico
C)   the value of all cars produced by General Motors in the U.S.
D)   the value of cars produced by Nissan in Japan and the U.S.E) A) and D)
F) A) and C)

Question 7

Gross domestic product measures:

Accepted Answer

A)   the total income earned from current production of final goods and services in the country.
B)   the total spending on currently- produced final goods and services in the country.
C)   the total market value of all currently- produced final output in the country.
D)   all of the above.E) None of the above
F) C) and D)

Question 8

Refer to Application 2, "Comparing the Severity of Recessions," to answer the following questions:
-According to the application, the recession that started in December 2007 is comparable to the recession in:

Accepted Answer

A)   1980.
B)   1981- 1982.
C)   1990- 1991.
D)   1973- 1975.E) A) and D)
F) A) and C)

Question 9

In macroeconomics, underground activities include:

Accepted Answer

A)   illegal activities.
B)   mining.
C)   non- market transactions.
D)   A and C are correct.E) C) and D)
F) None of the above

Question 10

In the circular flow diagram, firms:

Accepted Answer

A)   demand the inputs that households supply in product markets.
B)   demand the goods and services that households supply in product markets.
C)   supply the goods and services that households demand in product markets.
D)   supply the inputs that households demand in factor markets.E) All of the above
F) C) and D)

Question 11

Identify which of the following item(s) would be included in U.S. GDP:
(a) the salary of an American consultant hired by a British firm to go to Europe and analyze their operations there.
(b) the output of a U.S.- owned family farm in Kansas.
(c) food stamp payments.
(d) welfare checks.
(e) the wages of a field worker in Louisiana.

Accepted Answer

The output of a U.S.- owned family farm ...

Question 12

A company produced 10 dishwasher machines in 1998. The company sold 8 in 1998 and added 2 to its inventories. The market value of the dishwasher machines in 1998 was $200 per unit. What is the value of this company's output that will be included in the 1998 GDP?

Accepted Answer

A)   $1,800
B)   $400
C)   $1,600
D)   $2,000E) A) and B)
F) All of the above

Question 13

The largest component of aggregate expenditure is consumption expenditure.

Accepted Answer

A) True 
 B)False

Question 14

From World War II until 2008, the U.S. has experienced:

Accepted Answer

A)   eleven recessions.
B)   nine recessions and one depression.
C)   a continuous period of economic growth.
D)   ten recessions.E) C) and D)
F) None of the above

Question 15

Depreciation is:

Accepted Answer

A)   the amount of decline in business inventories.
B)   the additional capital stock in a year.
C)   the wear and tear of capital as it is used in production.
D)   the decrease in the overall price level.E) A) and D)
F) All of the above

Question 16

If net national product is $250 billion and indirect taxes are $5 billion, then national income is:

Accepted Answer

A)   $245 billion.
B)   $285 billion.
C)   $255 billion.
D)   $405 billion.E) B) and D)
F) A) and B)

Question 17

The U.S. experienced a severe depression during:

Accepted Answer

A)   the March 2001 to November 2001 period.
B)   the 1973- 1975 period.
C)   the 1929- 1933 period.
D)   all of the above.E) A) and D)
F) B) and C) C

Question 18

Inflation is:

Accepted Answer

A)   sustained decreases in the total prices of all goods and services.
B)   sustained decreases in the average prices of all goods and services.
C)   sustained increases in the average prices of all goods and services.
D)   sustained increases in the total prices of all goods and services.E) A) and B)
F) A) and C)

Question 19

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

Accepted Answer

Net investment equals gross investment minus depreciation. If depreciation is greater than gross investment, net investment will be negative. In such a situation, there is insufficient gross investment to offset the effects of the depreciation of the capital stock. In this case, the capital stock would diminish in size during that period.

Question 20

If you take a walk in the park during your coffee break, this activity _______ the measurement of real GDP and _______ social welfare.

Accepted Answer

A)   decreases; has no effect on
B)   has no effect on; increases
C)   increases; decreases
D)   decreases; increases.E) A) and D)
F) B) and C) B

Exam 5: Measuring a Nations Production and Income

Net national product (NNP) is equal to:

Correct Answer
verified

Which of the following is not included in private investment expenditure?

Correct Answer
verified

More abundant leisure time increases _, but it _ real GDP.

Correct Answer
verified

In 1929- 1933, the U.S. experienced unemployment rates exceeding _______.

Correct Answer
verified

Suppose you buy a $40,000 BMW from your local dealership. The car was built completely in Germany. Assuming no dealer mark- up on the car, how would your purchase be recorded in US GDP accounts? By how much would US GDP increase as a result of your purchase?

Correct Answer
verified
Your purchase increases Consumption Expe...
View Answer

Which of the following is included in both the U.S. GDP and GNP?

Correct Answer
verified

Gross domestic product measures:

Correct Answer
verified

Refer to Application 2, "Comparing the Severity of Recessions," to answer the following questions: -According to the application, the recession that started in December 2007 is comparable to the recession in:

Correct Answer
verified

In macroeconomics, underground activities include:

Correct Answer
verified

In the circular flow diagram, firms:

Correct Answer
verified

Correct Answer
verified
The output of a U.S.- owned family farm ...
View Answer

A company produced 10 dishwasher machines in 1998. The company sold 8 in 1998 and added 2 to its inventories. The market value of the dishwasher machines in 1998 was $200 per unit. What is the value of this company's output that will be included in the 1998 GDP?

Correct Answer
verified

The largest component of aggregate expenditure is consumption expenditure.

Correct Answer
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From World War II until 2008, the U.S. has experienced:

Correct Answer
verified

Depreciation is:

Correct Answer
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If net national product is $250 billion and indirect taxes are $5 billion, then national income is:

Correct Answer
verified

The U.S. experienced a severe depression during:

Correct Answer
verified
C

Inflation is:

Correct Answer
verified

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

If you take a walk in the park during your coffee break, this activity _ the measurement of real GDP and _ social welfare.

Correct Answer
verified
B

Exam 5: Measuring a Nations Production and Income

Net national product (NNP) is equal to:

Correct AnswerverifiedShow Answer

Which of the following is not included in private investment expenditure?

Correct AnswerverifiedShow Answer

More abundant leisure time increases _______, but it _______ real GDP.

Correct AnswerverifiedShow Answer

In 1929- 1933, the U.S. experienced unemployment rates exceeding _______.

Correct AnswerverifiedShow Answer

Suppose you buy a $40,000 BMW from your local dealership. The car was built completely in Germany. Assuming no dealer mark- up on the car, how would your purchase be recorded in US GDP accounts? By how much would US GDP increase as a result of your purchase?

Correct AnswerverifiedYour purchase increases Consumption Expe...View AnswerShow Answer

Which of the following is included in both the U.S. GDP and GNP?

Correct AnswerverifiedShow Answer

Gross domestic product measures:

Correct AnswerverifiedShow Answer

Refer to Application 2, "Comparing the Severity of Recessions," to answer the following questions: -According to the application, the recession that started in December 2007 is comparable to the recession in:

Correct AnswerverifiedShow Answer

In macroeconomics, underground activities include:

Correct AnswerverifiedShow Answer

In the circular flow diagram, firms:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe output of a U.S.- owned family farm ...View AnswerShow Answer

A company produced 10 dishwasher machines in 1998. The company sold 8 in 1998 and added 2 to its inventories. The market value of the dishwasher machines in 1998 was $200 per unit. What is the value of this company's output that will be included in the 1998 GDP?

Correct AnswerverifiedShow Answer

The largest component of aggregate expenditure is consumption expenditure.

Correct AnswerverifiedShow Answer

From World War II until 2008, the U.S. has experienced:

Correct AnswerverifiedShow Answer

Depreciation is:

Correct AnswerverifiedShow Answer

If net national product is $250 billion and indirect taxes are $5 billion, then national income is:

Correct AnswerverifiedShow Answer

The U.S. experienced a severe depression during:

Correct AnswerverifiedC

Inflation is:

Correct AnswerverifiedShow Answer

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

If you take a walk in the park during your coffee break, this activity _______ the measurement of real GDP and _______ social welfare.

Correct AnswerverifiedB

Correct Answer
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Correct Answer
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More abundant leisure time increases _, but it _ real GDP.

Correct Answer
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Correct Answer
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Correct Answer
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Your purchase increases Consumption Expe...
View Answer

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
The output of a U.S.- owned family farm ...
View Answer

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
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C

Correct Answer
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If you take a walk in the park during your coffee break, this activity _ the measurement of real GDP and _ social welfare.

Correct Answer
verified
B