question
GDP is:
D. the value of all final goods and services produced domestically.
A. the sum of all currency and coins in circulation.
B. the value of all final goods and services produced by a government.
C. the value of all final good and services produced anywhere in the world by a nation's firms.
D. the value of all final goods and services produced domestically.
A. the sum of all currency and coins in circulation.
B. the value of all final goods and services produced by a government.
C. the value of all final good and services produced anywhere in the world by a nation's firms.
answer
D
question
Consumption in the United States is about ____________ of GDP, and it moves relatively little over time.
B. 33%
D. 90%
C. 68%
A. 10%
B. 33%
D. 90%
C. 68%
A. 10%
answer
C
question
___________ is a small category that refers to the goods produced by one business that have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves.
A. Inventories
D. Durable goods
B. Services
C. Structures
A. Inventories
D. Durable goods
B. Services
C. Structures
answer
A
question
Which of the following is included in the calculated Gross Domestic Product?
B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner.
A. Farmer Freddie sells his second tractor to his son.
D. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle.
C. A local ice cream store sells $17,000 worth of cones and sundaes on July 1.
B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner.
A. Farmer Freddie sells his second tractor to his son.
D. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle.
C. A local ice cream store sells $17,000 worth of cones and sundaes on July 1.
answer
C
question
_________ are now the largest single component of the supply side of GDP, representing over half of GDP.
C. Nondurable goods
D. Structures
A. Durable goods
B. Services
C. Nondurable goods
D. Structures
A. Durable goods
B. Services
answer
B
question
To compare the GDP of two different countries with different currencies, it is necessary to use _________________________.
A. an exchange rate
B. foreign currency
D. per capita GDP
C. currency rates
A. an exchange rate
B. foreign currency
D. per capita GDP
C. currency rates
answer
A
question
_________ is calculated by taking _________ and then subtracting the value of how much physical capital is worn out, or reduced in value because of aging, over the course of a year.
B. NNP; GNP
D. NNP; GDP
C. GDP; NNP
A. GNP; NNP
B. NNP; GNP
D. NNP; GDP
C. GDP; NNP
A. GNP; NNP
answer
B
question
Investment (I) includes:
B. the amount spent on stocks and bonds.
C. the amount spent on consumer goods that last more than one year.
D. the amount spent on purchases of art.
A. the amount spent on new factories and machinery.
B. the amount spent on stocks and bonds.
C. the amount spent on consumer goods that last more than one year.
D. the amount spent on purchases of art.
A. the amount spent on new factories and machinery.
answer
A
question
A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are:
C. expansion, trough, recession, peak
D. expansion, peak, recession, trough
A. trough, expansion, recession, peak
B. contraction, recession, expansion, boom
C. expansion, trough, recession, peak
D. expansion, peak, recession, trough
A. trough, expansion, recession, peak
B. contraction, recession, expansion, boom
answer
D
question
In 1990, the GDP of Canada was $680 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 85 U.S. cents. In 2000, the GDP of Canada was $1000 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 69 U.S. cents. By what percentage did the GDP of Canada increase from 1990 to 2000 in Canadian dollars?
D. 147%
C. 68%
A. 19.4%
B. 47%
D. 147%
C. 68%
A. 19.4%
B. 47%
answer
B
question
The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation.
B. adjusted value
C. real value
A. empirical value
D. net value
B. adjusted value
C. real value
A. empirical value
D. net value
answer
C
question
_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.
C. The living standard
D. Investment and inventions
A. GDP per capita
B. The Industrial Revolution
C. The living standard
D. Investment and inventions
A. GDP per capita
B. The Industrial Revolution
answer
B
question
The value of what is produced per worker, or per hour worked, is called ____________.
C. productivity
D. GDP per capita
A. economic growth
B. human capital
C. productivity
D. GDP per capita
A. economic growth
B. human capital
answer
C
question
When society has a higher level of capital per person, it is called ______________.
D. technological gains
A. physical capital
B. human capital
C. capital deepening
D. technological gains
A. physical capital
B. human capital
C. capital deepening
answer
C
question
production vs prices
y1y2y3 y1y2y3
goodx 6080100 1 1 1.4
goody 100110130 .8 .9 1
Refer to the table. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's real GDP in year 2 is
C. $202.
B. $179.
D. $214.
A. $168.
y1y2y3 y1y2y3
goodx 6080100 1 1 1.4
goody 100110130 .8 .9 1
Refer to the table. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's real GDP in year 2 is
C. $202.
B. $179.
D. $214.
A. $168.
answer
A
question
If no foreign companies produce in a country, but many of the country's companies produce abroad, then
A. the country's GNP and GDP will tend to be equal.
C. the country's GDP will tend to be equal to its domestic income.
D. the country's GDP will tend to exceed its GNP.
B. the country's GNP will tend to exceed its GDP.
A. the country's GNP and GDP will tend to be equal.
C. the country's GDP will tend to be equal to its domestic income.
D. the country's GDP will tend to exceed its GNP.
B. the country's GNP will tend to exceed its GDP.
answer
B
question
If no foreign companies produce in a country, but many of the country's companies produce abroad, then
A.the country's GDP will tend to be equal to its domestic income.
B.the country's GNP will tend to exceed its GDP.
C.the country's GNP and GDP will tend to be equal.
D.the country's GDP will tend to exceed its GNP.
A.the country's GDP will tend to be equal to its domestic income.
B.the country's GNP will tend to exceed its GDP.
C.the country's GNP and GDP will tend to be equal.
D.the country's GDP will tend to exceed its GNP.
answer
B
question
A rancher raises alpaca. Once a year, he shears them and sells the raw wool to a processor who spins it into yarn. The yarn is then sold to a mill which produces and sells alpaca sweaters. In calculating GDP we would count
A.only the sweaters.
B.the raw wool, the yarn and the sweaters.
C.only the raw wool and the yarn.
D.only the yarn and the sweaters.
A.only the sweaters.
B.the raw wool, the yarn and the sweaters.
C.only the raw wool and the yarn.
D.only the yarn and the sweaters.
answer
A
question
Profits earned in a foreign country by U.S.-owned companies are included in
A.the United States GNP but not GDP.
B.the United States GDP but not GNP.
C.both the United States GDP and GNP.
D. neither the United States GDP nor GNP.
A.the United States GNP but not GDP.
B.the United States GDP but not GNP.
C.both the United States GDP and GNP.
D. neither the United States GDP nor GNP.
answer
A
question
Which of the following is not a component of gross domestic product?
A. net exports
B. purchases by consumers of finished goods
C.purchases by consumers of used goods
D.government purchases
A. net exports
B. purchases by consumers of finished goods
C.purchases by consumers of used goods
D.government purchases
answer
C
question
The GDP deflator in year 3 is 85 using year 1 as a base year. This means that, on average, the price of goods and services is
A.7.5% higher in year 1 than in year 3.
B.15% higher in year 3 than in year 1.
C.15% higher in year 1 than in year 3.
D. 7.5% higher in year 3 than in year 1.
A.7.5% higher in year 1 than in year 3.
B.15% higher in year 3 than in year 1.
C.15% higher in year 1 than in year 3.
D. 7.5% higher in year 3 than in year 1.
answer
C
question
GDP understates the value of output produced by an economy because it
A.excludes the value of the wages and fringe benefits of government employees.
B.excludes value added from the underground economy, such as tips taken "under the table."
C. includes transactions that do not take place in organized markets, such as home-cooked meals.
D.includes environmental degradation caused by increased output production.
A.excludes the value of the wages and fringe benefits of government employees.
B.excludes value added from the underground economy, such as tips taken "under the table."
C. includes transactions that do not take place in organized markets, such as home-cooked meals.
D.includes environmental degradation caused by increased output production.
answer
B
question
Which of the following is not considered capital?
A.the knowledge an individual acquires through education
B.a tractor produced by John Deere
C.10,000 U.S. dollars
D.a factory a company builds to produce other output
A.the knowledge an individual acquires through education
B.a tractor produced by John Deere
C.10,000 U.S. dollars
D.a factory a company builds to produce other output
answer
C
question
Which of the following best explains the growth in output per worker hour during the 20th century?
A.the worker-capital ratio increased during that period
B. the quantity of labor increased during that period
C.the quality of labor declined during that period
D.the quality of capital improved during that period
A.the worker-capital ratio increased during that period
B. the quantity of labor increased during that period
C.the quality of labor declined during that period
D.the quality of capital improved during that period
answer
D
question
Economic growth is defined as
A.an increase in the wage rate.
B.a decrease in the rate of inflation.
C. an increase in employment.
D.a sustained expansion of production possibilities.
E.an increase in the nation's population.
A.an increase in the wage rate.
B.a decrease in the rate of inflation.
C. an increase in employment.
D.a sustained expansion of production possibilities.
E.an increase in the nation's population.
answer
D
question
Activities that encourage faster growth are
A. high levels of consumption and low levels of savings.
B.limiting property rights so that everyone can use any invention.
C.taxes on saving that serve to encourage more spending and less saving.
D. high levels of saving and investment in human capital.
E.imposing trade barriers to limit international trade and thereby protect national industries.
A. high levels of consumption and low levels of savings.
B.limiting property rights so that everyone can use any invention.
C.taxes on saving that serve to encourage more spending and less saving.
D. high levels of saving and investment in human capital.
E.imposing trade barriers to limit international trade and thereby protect national industries.
answer
D
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