Gross Domestic Product and Growth Exam
Questions with Answers
1. National income accounting. correct answer: System that collects macroeconomic statistics
on production, income, investment, and savings correct answer:
2. Gross domestic product. correct answer: The total value of all final goods and services
produced in a particular economy; the dollar value of all final goods and services produced
within a country's borders in a given year correct answer:
3. Intermediate goods. correct answer: Goods used in the production of final goods correct
answer:
4. Durable goods. correct answer: Goods that last for a relatively long time, such as refrigerators,
cars, and DVD players correct answer:
5. Nondurable goods. correct answer: Goods that last a short period of time, such as food, light
bulbs, and sneakers correct answer:
6. A correct answer:
Compared with the expenditure approach to calculating GDP, the income approach is .
(A) More accurate
(B) Connected more strongly to stock market performance.
(C) Preferred by the average consumer
(D) More practical
7. Nominal GDP. correct answer: Gross domestic product measured in current prices correct
answer:
8. Real GDP. correct answer: Gross domestic product expressed in constant, or unchanging, prices
correct answer:
9. A correct answer: How is nominal GDP converted into real GDP?
(A) By eliminating the ettects of price increases on GDP growth.
(B) By adding up all of the real purchases made in the economy.
(C) By adding the contributions of American-owned factories in foreign countries.
(D) By adding all incomes earned to total expenditures by consumers, businesses, and government.
10. C correct answer: What is the ditterence between real GDP and nominal GDP?
(A) Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities.
(B) Real GDP allows for depreciation; nominal GDP allows for no depreciation.
,(C) Real GDP is based on constant prices; nominal GDP is based on the current year's prices.
(D) Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars.
11. D correct answer: What is the underground economy?
(A) Costs of such things as personal safety, vacations, and sick pay.
(B) The goods and services people make or do themselves.
(C) The amount spent for environmental cleanup and similar products.
(D) Products and income that are not reported as income to the government.
12. Gross national product. correct answer: The annual income earned by U.S.-owned
firms and U.S. residents correct answer:
13. Depreciation. correct answer: The loss of the value of capital equipment that results from
normal wear and tear; also, a
decrease in the value of a currency correct answer:
, 14. A correct answer: What is the amount of money a person has left of his or her income after taxes
called?
(A) Disposable personal income
(B) National income
(C) Personal income
(D) Aggregate income
15. B correct answer: Which of these is an example of depreciation?
(A) A clothing store owner reduces the price of a belt by $10 to encourage sales.
(B) A worker's truck breaks down more often after 80,000 miles of driving.
(C) An employer fires a worker for repeatedly arriving late to work.
(D) A share of stock declines in value over several months.
16. Price level. correct answer: Average of all prices in the economy correct answer:
17. Aggregate supply. correct answer: Total amount of goods and services in the economy
available at all possible price levels correct answer:
18. Aggregate demand. correct answer: Amount of goods and services in the economy that
will be purchased at all possible
price levels correct answer:
19. D correct answer: According to the aggregate supply curve, what happens as the price level
increases?
(A) Consumers increase their spending.
(B) Profits decrease.
(C) Real GDP falls.
(D) Firms have more of an incentive to increase output.
20. C correct answer: Going from left
to right on the aggregate demand curve, real GDP .
(A) Falls as price level falls
(B) Rises as price level rises
(C) Rises as price level falls
(D) Falls as price level rises
21. C correct
answer: If a consumer goes to the store and purchases a DVD player, the shopper is buying both a
Questions with Answers
1. National income accounting. correct answer: System that collects macroeconomic statistics
on production, income, investment, and savings correct answer:
2. Gross domestic product. correct answer: The total value of all final goods and services
produced in a particular economy; the dollar value of all final goods and services produced
within a country's borders in a given year correct answer:
3. Intermediate goods. correct answer: Goods used in the production of final goods correct
answer:
4. Durable goods. correct answer: Goods that last for a relatively long time, such as refrigerators,
cars, and DVD players correct answer:
5. Nondurable goods. correct answer: Goods that last a short period of time, such as food, light
bulbs, and sneakers correct answer:
6. A correct answer:
Compared with the expenditure approach to calculating GDP, the income approach is .
(A) More accurate
(B) Connected more strongly to stock market performance.
(C) Preferred by the average consumer
(D) More practical
7. Nominal GDP. correct answer: Gross domestic product measured in current prices correct
answer:
8. Real GDP. correct answer: Gross domestic product expressed in constant, or unchanging, prices
correct answer:
9. A correct answer: How is nominal GDP converted into real GDP?
(A) By eliminating the ettects of price increases on GDP growth.
(B) By adding up all of the real purchases made in the economy.
(C) By adding the contributions of American-owned factories in foreign countries.
(D) By adding all incomes earned to total expenditures by consumers, businesses, and government.
10. C correct answer: What is the ditterence between real GDP and nominal GDP?
(A) Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities.
(B) Real GDP allows for depreciation; nominal GDP allows for no depreciation.
,(C) Real GDP is based on constant prices; nominal GDP is based on the current year's prices.
(D) Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars.
11. D correct answer: What is the underground economy?
(A) Costs of such things as personal safety, vacations, and sick pay.
(B) The goods and services people make or do themselves.
(C) The amount spent for environmental cleanup and similar products.
(D) Products and income that are not reported as income to the government.
12. Gross national product. correct answer: The annual income earned by U.S.-owned
firms and U.S. residents correct answer:
13. Depreciation. correct answer: The loss of the value of capital equipment that results from
normal wear and tear; also, a
decrease in the value of a currency correct answer:
, 14. A correct answer: What is the amount of money a person has left of his or her income after taxes
called?
(A) Disposable personal income
(B) National income
(C) Personal income
(D) Aggregate income
15. B correct answer: Which of these is an example of depreciation?
(A) A clothing store owner reduces the price of a belt by $10 to encourage sales.
(B) A worker's truck breaks down more often after 80,000 miles of driving.
(C) An employer fires a worker for repeatedly arriving late to work.
(D) A share of stock declines in value over several months.
16. Price level. correct answer: Average of all prices in the economy correct answer:
17. Aggregate supply. correct answer: Total amount of goods and services in the economy
available at all possible price levels correct answer:
18. Aggregate demand. correct answer: Amount of goods and services in the economy that
will be purchased at all possible
price levels correct answer:
19. D correct answer: According to the aggregate supply curve, what happens as the price level
increases?
(A) Consumers increase their spending.
(B) Profits decrease.
(C) Real GDP falls.
(D) Firms have more of an incentive to increase output.
20. C correct answer: Going from left
to right on the aggregate demand curve, real GDP .
(A) Falls as price level falls
(B) Rises as price level rises
(C) Rises as price level falls
(D) Falls as price level rises
21. C correct
answer: If a consumer goes to the store and purchases a DVD player, the shopper is buying both a
