Economics ECON 248 – Quiz 2 – Practice Questions
Gross domestic product is
Select one:
a. the market value of all goods and services produced in a country during a given time period.
b. the market value of all the final goods and services produced in a country during a given time
period.
c. the final value of all goods produced in a country in a given time period.
d. the market value of all the intermediate goods and services produced in a country during a
given time period.
e. the average value of output produced in a country in a given time period. - correct answer
✔✔ b. the market value of all the final goods and services produced in a country during a given
time period.
In the circular flow model,
Select one:
a. households are buyers of goods and services in goods markets.
b. firms are buyers of goods and services in final markets.
c. firms are sellers of the factors in factor markets.
d. households are sellers of factor services in goods markets.
e. firms are sellers of goods and services in factor markets. - correct answer ✔✔ a. households
are buyers of goods and services in goods markets.
Which of the following is an expenditure flow from households to firms?
Select one:
a. goods and services
b. factor services
, c. loans
d. payments for factor services
e. payments for goods and services - correct answer ✔✔ e. payments for goods and services
A bakery uses flour to produce bread.
When calculating GDP, we include ________, because when we add the value of the flour to the
value of the loaf of bread to calculate GDP, the result is ________.
Select one:
a. both the value of the bread sold in a store and the value of the flour used to produce the
bread / double counting
b. both the value of the bread sold in a store and the value of the flour used to produce the
bread / the true value of the economy's output
c. only the value of the flour used to produce the bread / double counting
d. only the value of the bread sold in a store / double counting
e. None of the above combinations is correct. - correct answer ✔✔ d. only the value of the
bread sold in a store / double counting
Suppose the economy of Econoworld produces only two goods: kayaks and birdseed. In one
year, 20 kayaks are produced and sold for $1000 each and 10 bags of birdseed are produced and
sold for $30 each. The value of nominal GDP for this year is
Select one:
a. $300.
b. $20,000.
c. $20,300.
d. $23,000.
e. 20 kayaks plus 10 bags of birdseed. - correct answer ✔✔ c. $20,300.
Gross domestic product is
Select one:
a. the market value of all goods and services produced in a country during a given time period.
b. the market value of all the final goods and services produced in a country during a given time
period.
c. the final value of all goods produced in a country in a given time period.
d. the market value of all the intermediate goods and services produced in a country during a
given time period.
e. the average value of output produced in a country in a given time period. - correct answer
✔✔ b. the market value of all the final goods and services produced in a country during a given
time period.
In the circular flow model,
Select one:
a. households are buyers of goods and services in goods markets.
b. firms are buyers of goods and services in final markets.
c. firms are sellers of the factors in factor markets.
d. households are sellers of factor services in goods markets.
e. firms are sellers of goods and services in factor markets. - correct answer ✔✔ a. households
are buyers of goods and services in goods markets.
Which of the following is an expenditure flow from households to firms?
Select one:
a. goods and services
b. factor services
, c. loans
d. payments for factor services
e. payments for goods and services - correct answer ✔✔ e. payments for goods and services
A bakery uses flour to produce bread.
When calculating GDP, we include ________, because when we add the value of the flour to the
value of the loaf of bread to calculate GDP, the result is ________.
Select one:
a. both the value of the bread sold in a store and the value of the flour used to produce the
bread / double counting
b. both the value of the bread sold in a store and the value of the flour used to produce the
bread / the true value of the economy's output
c. only the value of the flour used to produce the bread / double counting
d. only the value of the bread sold in a store / double counting
e. None of the above combinations is correct. - correct answer ✔✔ d. only the value of the
bread sold in a store / double counting
Suppose the economy of Econoworld produces only two goods: kayaks and birdseed. In one
year, 20 kayaks are produced and sold for $1000 each and 10 bags of birdseed are produced and
sold for $30 each. The value of nominal GDP for this year is
Select one:
a. $300.
b. $20,000.
c. $20,300.
d. $23,000.
e. 20 kayaks plus 10 bags of birdseed. - correct answer ✔✔ c. $20,300.
