Output, Income, and Economic Growth Quiz 2023 with
complete solution
The equation for net investment is written as:
Net Investment = Gross Investment - Depreciation
Which of the following scenarios would be included in GDP?
Pam buys a new 40-inch television at Walmart.
Determine whether each of the following examples would be included in Gross
Domestic Product (GDP).
a. When Judy went to the grocery store yesterday, she bought three pounds of
potatoes.
Judy's purchase of potatoes ____
b. Ford Motor Company buys four tires to put on a new Ford Mustang.
The purchase of the tires______
c. The U.S. Air Force purchases two new fighter jets from Boeing.
The purchase of the two fighter jets _______
d. When Joey had his birthday last week, his grandmother sent him a $100 bill
that he could spend.
Joey's birthday gift of $100______
a. would be included in GDP as a consumption expenditure
b. would not be included in GDP
c. would be included in GDP as a government purchase
d. would not be included in GDP
Henry and his girlfriend ate dinner at the new Thai restaurant that recently
opened in his neighborhood. This expenditure would be included in:
services.
Which of the following statements correctly explains exports versus net exports?
Exports are goods, services, or resources produced domestically and sold abroad, while
net exports are equal to exports minus imports.
, Which of the following correctly describes GDP using the income approach?
GDP = National Income + Indirect Business Taxes + Depreciation + Net Foreign Factor
Income
In the treatment of U.S. exports and imports, national income accountants _____.
add exports but subtract imports in calculating GDP
Personal consumption expenditures consist of _____.
household and individual purchases of services and durable and nondurable goods
The gross domestic product (GDP) concept accounts for society's valuation of
the relative worth of goods and services by using a _____.
monetary measure
In the second quarter (three-month period) of 2016, U.S. nominal GDP increased
but U.S. real GDP declined. What can we conclude?
The price level rose by more than nominal GDP.
The broadest measure to adjust Nominal GDP for price changes is _____.
the GDP price index
The sale of a used automobile would not be included in GDP of the current year
because it is _____.
not current production
Which of the following is not an example of an intermediate good?
an oven bought by a homeowner
Nominal GDP is _____.
the sum of all monetary transactions involving final goods and services that occur in the
economy in a year
Which of the following is a primary use for national income accounts?
To measure changes in the value of production and income in the economy
Net exports is a positive number when a nation _____.
exports more goods and services than it imports
GDP measured using current prices is called _____.
nominal GDP
Which of the following is not included in gross domestic private investment, as
defined in national income accounts?
Government construction of new highways and dams
GDP measured using base year prices is called _____.
real GDP
Government expenditures for social security and unemployment insurance are,
for GDP accounting purposes, considered _____.
transfer payments, and are not included in government spending as part of GDP
If real GDP declines in a given year, nominal GDP _____.
may either rise or fall
The base year is 2005, and the GDP price index in 2004 is 92.0. This implies that
the _____.
prices in 2005 were higher than in 2004
Which of the following is included in GDP?
The value of a haircut
What do government purchases include in national income accounting?
Purchases by federal, state, and local governments
complete solution
The equation for net investment is written as:
Net Investment = Gross Investment - Depreciation
Which of the following scenarios would be included in GDP?
Pam buys a new 40-inch television at Walmart.
Determine whether each of the following examples would be included in Gross
Domestic Product (GDP).
a. When Judy went to the grocery store yesterday, she bought three pounds of
potatoes.
Judy's purchase of potatoes ____
b. Ford Motor Company buys four tires to put on a new Ford Mustang.
The purchase of the tires______
c. The U.S. Air Force purchases two new fighter jets from Boeing.
The purchase of the two fighter jets _______
d. When Joey had his birthday last week, his grandmother sent him a $100 bill
that he could spend.
Joey's birthday gift of $100______
a. would be included in GDP as a consumption expenditure
b. would not be included in GDP
c. would be included in GDP as a government purchase
d. would not be included in GDP
Henry and his girlfriend ate dinner at the new Thai restaurant that recently
opened in his neighborhood. This expenditure would be included in:
services.
Which of the following statements correctly explains exports versus net exports?
Exports are goods, services, or resources produced domestically and sold abroad, while
net exports are equal to exports minus imports.
, Which of the following correctly describes GDP using the income approach?
GDP = National Income + Indirect Business Taxes + Depreciation + Net Foreign Factor
Income
In the treatment of U.S. exports and imports, national income accountants _____.
add exports but subtract imports in calculating GDP
Personal consumption expenditures consist of _____.
household and individual purchases of services and durable and nondurable goods
The gross domestic product (GDP) concept accounts for society's valuation of
the relative worth of goods and services by using a _____.
monetary measure
In the second quarter (three-month period) of 2016, U.S. nominal GDP increased
but U.S. real GDP declined. What can we conclude?
The price level rose by more than nominal GDP.
The broadest measure to adjust Nominal GDP for price changes is _____.
the GDP price index
The sale of a used automobile would not be included in GDP of the current year
because it is _____.
not current production
Which of the following is not an example of an intermediate good?
an oven bought by a homeowner
Nominal GDP is _____.
the sum of all monetary transactions involving final goods and services that occur in the
economy in a year
Which of the following is a primary use for national income accounts?
To measure changes in the value of production and income in the economy
Net exports is a positive number when a nation _____.
exports more goods and services than it imports
GDP measured using current prices is called _____.
nominal GDP
Which of the following is not included in gross domestic private investment, as
defined in national income accounts?
Government construction of new highways and dams
GDP measured using base year prices is called _____.
real GDP
Government expenditures for social security and unemployment insurance are,
for GDP accounting purposes, considered _____.
transfer payments, and are not included in government spending as part of GDP
If real GDP declines in a given year, nominal GDP _____.
may either rise or fall
The base year is 2005, and the GDP price index in 2004 is 92.0. This implies that
the _____.
prices in 2005 were higher than in 2004
Which of the following is included in GDP?
The value of a haircut
What do government purchases include in national income accounting?
Purchases by federal, state, and local governments
