Question 1

All of the following are examples of intermediate goods, except

Accepted Answer

A)   ﬂour bought by a bakery.
B)   an oven bought by a bakery.
C)   oﬃce supplies bought by an accounting ﬁrm.
D)   gasoline bought by a trucking company.E) B) and D)
F) C) and D)

Question 2

Suppose Smith pays $100 to Jones.

Accepted Answer

A)   We can say with certainty that the GDP has increased by $100.
B)   We can say with certainty that the GDP has increased, but we cannot determine the amount.
C)   We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased.
D)   We need more information to determine whether GDP has changed.E) None of the above
F) All of the above

Question 3

Personal Taxes $23 Net Private Domestic Investment 33 Net Exports 6 National Income 278 U.S. Exports 20 Gross Private Domestic Investment 56 Disposable Income 220 Taxes on Production and Imports 32 Undistributed Corporate Profits 15 Proprietors’ Income 45 Net Foreign Factor Income 0 Statistical Discrepancy 0\begin{array} { | l | r | } \hline 	ext { Personal Taxes } & \$ 23 \\hline 	ext { Net Private Domestic Investment } & 33 \\hline 	ext { Net Exports } & 6 \\hline 	ext { National Income } & 278 \\hline 	ext { U.S. Exports } & 20 \\hline 	ext { Gross Private Domestic Investment } & 56 \\hline 	ext { Disposable Income } & 220 \\hline 	ext { Taxes on Production and Imports } & 32 \\hline 	ext { Undistributed Corporate Profits } & 15 \\hline 	ext { Proprietors&#x27; Income } & 45 \\hline 	ext { Net Foreign Factor Income } & 0 \\hline 	ext { Statistical Discrepancy } & 0 \\hline\end{array} Personal Taxes  Net Private Domestic Investment  Net Exports  National Income  U.S. Exports  Gross Private Domestic Investment  Disposable Income  Taxes on Production and Imports  Undistributed Corporate Profits  Proprietors’ Income  Net Foreign Factor Income  Statistical Discrepancy ​$23336278205622032154500​​  Refer to the accompanying national income data. All ?gures are in billions of dollars. U.S. imports are

Accepted Answer

A)   $26.
B)   $16.
C)   $24.
D)   $14. E) A) and B)
F) None of the above

Question 4

If there are no statistical discrepancies, NDP (net domestic product)  is

Accepted Answer

A)   NI minus net foreign factor income.
B)   NI plus corporate income taxes.
C)   GDP deﬂated for increases in the price level.
D)   GDP minus taxes on production and imports.E) A) and C)
F) B) and D)

Question 5

A distinguishing characteristic of public transfer payments is that

Accepted Answer

A)   they include wages to government workers.
B)   they are counted as part of government purchases in the calculation of the gross domestic product.
C)   they include the cost of maintaining public parks.
D)   they involve no contribution to current production in return.E) All of the above
F) C) and D)

Question 6

To avoid multiple counting in national income accounts,

Accepted Answer

A)   only ﬁnal goods and services should be counted.
B)   intermediate goods and services should be counted.
C)   both ﬁnal and intermediate goods and services should be counted.
D)   primary, intermediate, and ﬁnal goods and services should be counted.E) B) and C)
F) A) and C)

Question 7

Assume that the size of the underground economy increases both absolutely and relatively over time. As a result,

Accepted Answer

A)   real GDP will rise more rapidly than nominal GDP.
B)   GDP will tend to increasingly understate the level of output through time.
C)   GDP will tend to increasingly overstate the level of output through time.
D)   the accuracy of GDP will be unaffected through time.E) All of the above
F) A) and C)

Question 8

What is the difference between national income and personal income?

Accepted Answer

A)   personal taxes
B)   National income includes income earned both in the United States and abroad, while personal income only includes that income earned within the borders of the United States.
C)   National income represents before-tax income, while personal income measures how much is available for spending after all taxes have been subtracted.
D)   National income represents income earned by American-owned resources, while personal income measures received income, whether earned or unearned.E) All of the above
F) A) and D)

Question 9

In national income accounting, the personal consumption expenditures category includes purchases of

Accepted Answer

A)   both new and used consumer goods.
B)   consumer durable goods and consumer nondurable goods but not services.
C)   consumer durable goods, consumer nondurable goods, and services.
D)   changes in business inventories.E) B) and C)
F) A) and C)

Question 10

Personal Taxes $23 Net Private Domestic Investment 33 Net Exports 6 National Income 278 U.S. Exports 20 Gross Private Domestic Investment 56 Disposable Income 220 Taxes on Production and Imports 32 Undistributed Corporate Profits 15 Proprietors’ Income 45 Net Foreign Factor Income 0 Statistical Discrepancy 0\begin{array} { | l | r | } \hline 	ext { Personal Taxes } & \$ 23 \\hline 	ext { Net Private Domestic Investment } & 33 \\hline 	ext { Net Exports } & 6 \\hline 	ext { National Income } & 278 \\hline 	ext { U.S. Exports } & 20 \\hline 	ext { Gross Private Domestic Investment } & 56 \\hline 	ext { Disposable Income } & 220 \\hline 	ext { Taxes on Production and Imports } & 32 \\hline 	ext { Undistributed Corporate Profits } & 15 \\hline 	ext { Proprietors&#x27; Income } & 45 \\hline 	ext { Net Foreign Factor Income } & 0 \\hline 	ext { Statistical Discrepancy } & 0 \\hline\end{array} Personal Taxes  Net Private Domestic Investment  Net Exports  National Income  U.S. Exports  Gross Private Domestic Investment  Disposable Income  Taxes on Production and Imports  Undistributed Corporate Profits  Proprietors’ Income  Net Foreign Factor Income  Statistical Discrepancy ​$23336278205622032154500​​  Refer to the accompanying national income data. All ?gures are in billions of dollars. Consumption of ?xed capital (private sector)  is

Accepted Answer

A)   $23.
B)   $14.
C)   $32.
D)   $26. E) None of the above
F) B) and D)

Question 11

Subtracting the purchase of intermediate products and supplies from the value of the sales of ﬁnal products determines the amount of

Accepted Answer

A)   net investment for a business.
B)   proﬁt and cost.
C)   value added from the economic activity.
D)   surplus or deﬁcit from the economic activity.E) A) and B)
F) A) and C)

Question 12

Year  Units of Output  Price Per Unit 13$3244365477588\begin{array} { | c | c | c | } \hline 	ext { Year } & 	ext { Units of Output } & 	ext { Price Per Unit } \\hline 1 & 3 & \$ 3 \\hline 2 & 4 & 4 \\hline 3 & 6 & 5 \\hline 4 & 7 & 7 \\hline 5 & 8 & 8 \\hline\end{array} Year 12345​ Units of Output 34678​ Price Per Unit $34578​​  Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a ?ve-year period are shown in the table. The nominal GDP for year 4 is

Accepted Answer

A)   $49.
B)   $55.
C)   $40.
D)   $35. E) B) and D)
F) B) and C)

Question 13

Gross output (GO)

Accepted Answer

A)   and GDP are equivalent measures of the ﬁnal output of an economy.
B)   sums together the dollar value of economic activity at every stage of production.
C)   measures all economic activity leading up to but excluding ﬁnal output.
D)   always equals an amount smaller than GDP.E) C) and D)
F) B) and D)

Question 14

Which of the following is a primary use for national income accounts?

Accepted Answer

A)   to analyze the environmental cost of economic growth
B)   to assess the economic eﬃciency of speciﬁc industries in the economy
C)   to measure changes in the value of production and income in the economy
D)   to determine whether there is a fair and equitable distribution of income in the economyE) All of the above
F) A) and B)

Question 15

The National Income and Product Accounts (NIPA)  for the U.S. are compiled by the

Accepted Answer

A)   National Bureau of Economic Research.
B)   Bureau of Economic Analysis.
C)   National Census Bureau.
D)   Council of Economic Advisers.E) A) and C)
F) A) and B)

Question 16

In an economy experiencing a persistently falling price level,

Accepted Answer

A)   potential GDP will necessarily exceed actual GDP.
B)   changes in nominal GDP may either overstate or understate changes in real GDP.
C)   changes in nominal GDP understate changes in real GDP.
D)   changes in nominal GDP overstate changes in real GDP.E) A) and D)
F) A) and C)

Question 17

Net exports are

Accepted Answer

A)   that portion of consumption and investment goods sent to other countries.
B)   exports plus imports.
C)   exports less imports.
D)   imports less exports.E) A) and C)
F) A) and B)

Question 18

Year  Units of Output  Price of Bagel per Unit  Price Index (Year 1=100)  110$10100212202003153030042040400\begin{array} { | c | c | c | c | } \hline 	ext { Year } & 	ext { Units of Output } & 	ext { Price of Bagel per Unit } & 	ext { Price Index (Year 1=100)  } \\hline 1 & 10 & \$ 10 & 100 \\hline 2 & 12 & 20 & 200 \\hline 3 & 15 & 30 & 300 \\hline 4 & 20 & 40 & 400 \\hline\end{array} Year 1234​ Units of Output 10121520​ Price of Bagel per Unit $10203040​ Price Index (Year 1=100)  100200300400​​  The table contains data for a hypothetical single-product economy. Nominal GDP in year 3 is

Accepted Answer

A)   $100.
B)   $450.
C)   $225.
D)   $150. E) All of the above
F) B) and C)

Question 19

A nation's gross domestic product (GDP)

Accepted Answer

A)   is the dollar value of all ?nal output produced within the borders of the nation during a speci?c period of time.
B)   is the dollar value of all ?nal output produced by its citizens, regardless of where they are living.
C)     can be found by summing C+In+S+Xn. 	ext { can be found by summing   }  C + I _ { n } + S + X _ { n } 	ext {. } can be found by summing C+In​+S+Xn​.  
D)     is always some amount less than C+Ig+G+Xn	ext { is always some amount less than } C + I _ { g } + G + X _ { n } is always some amount less than C+Ig​+G+Xn​E) A) and D)
F) None of the above

Question 20

Which of the following is not included in personal consumption expenditures?

Accepted Answer

A)   new furniture and appliances bought by homeowners
B)   payments for cable and Internet services to homes
C)   purchases of mutual funds by consumers
D)   food purchased at supermarketsE) All of the above
F) B) and C)

Exam 7: Measuring Domestic Output and National Income

The National Income and Product Accounts (NIPA) for the U.S. are compiled by the

Correct Answer
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What is the difference between national income and personal income?

Correct Answer
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Which of the following is a primary use for national income accounts?

Correct Answer
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All of the following are examples of intermediate goods, except

Correct Answer
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To avoid multiple counting in national income accounts,

Correct Answer
verified

In an economy experiencing a persistently falling price level,

Correct Answer
verified

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A distinguishing characteristic of public transfer payments is that

Correct Answer
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In national income accounting, the personal consumption expenditures category includes purchases of

Correct Answer
verified

A nation's gross domestic product (GDP)

Correct Answer
verified

Correct Answer
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Assume that the size of the underground economy increases both absolutely and relatively over time. As a result,

Correct Answer
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Which of the following is not included in personal consumption expenditures?

Correct Answer
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Suppose Smith pays $100 to Jones.

Correct Answer
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Net exports are

Correct Answer
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Gross output (GO)

Correct Answer
verified

Subtracting the purchase of intermediate products and supplies from the value of the sales of ﬁnal products determines the amount of

Correct Answer
verified

If there are no statistical discrepancies, NDP (net domestic product) is

Correct Answer
verified

Exam 7: Measuring Domestic Output and National Income

The National Income and Product Accounts (NIPA) for the U.S. are compiled by the

Correct AnswerverifiedShow Answer

What is the difference between national income and personal income?

Correct AnswerverifiedShow Answer

Which of the following is a primary use for national income accounts?

Correct AnswerverifiedShow Answer

All of the following are examples of intermediate goods, except

Correct AnswerverifiedShow Answer

To avoid multiple counting in national income accounts,

Correct AnswerverifiedShow Answer

In an economy experiencing a persistently falling price level,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A distinguishing characteristic of public transfer payments is that

Correct AnswerverifiedShow Answer

In national income accounting, the personal consumption expenditures category includes purchases of

Correct AnswerverifiedShow Answer

A nation's gross domestic product (GDP)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume that the size of the underground economy increases both absolutely and relatively over time. As a result,

Correct AnswerverifiedShow Answer

Which of the following is not included in personal consumption expenditures?

Correct AnswerverifiedShow Answer

Suppose Smith pays $100 to Jones.

Correct AnswerverifiedShow Answer

Net exports are

Correct AnswerverifiedShow Answer

Gross output (GO)

Correct AnswerverifiedShow Answer

Subtracting the purchase of intermediate products and supplies from the value of the sales of ﬁnal products determines the amount of

Correct AnswerverifiedShow Answer

If there are no statistical discrepancies, NDP (net domestic product) is

Correct AnswerverifiedShow Answer

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