ECON 2301 Test Questions with Correct Answers Latest Update 2025
GDP is: - Answers the total value of all final goods and services plus intermediate goods and services
produced domestically within a given period.
Final goods or services used to compute GDP refer to: - Answers goods and services purchased by the
ultimate users.
Intermediate products - Answers produced domestically are not directly reflected in a nation's GDP.
Consumption is the purchase of goods and services by: - Answers households
Consumption is the largest single component of GDP. In recent years it represents approximately ____
percent of GDP. - Answers 70%
The expenditure method of measuring GDP is calculated by adding up: - Answers -the final goods and
services produced domestically during a given period.
-Consumption + Investment + Government Spending + (Exports-Imports).
-domestic production of final goods and services for consumers, firms, government, and the
international sector (through net exports).
Net exports are defined as: - Answers exports minus imports
Transfer payments are included in which category under the expenditure approach to GDP accounting? -
Answers Transfer payments are not directly included in GDP calculations
What is the measure of the income received by owners of resources used in making final goods and
services? - Answers factor payments
Which of the following is NOT part of U.S. GDP - Answers the value of a Toyota manufactured in Japan
and sold in the United States
Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita? - Answers a
rate of population growth that is greater than the rate of growth of real GDP
The prosperity of a nation today is typically measured by its: - Answers output per capita
A country will roughly double its GDP in twenty years if its annual growth rate is: - Answers 3.5 percent.
As more capital per worker is added, a per worker production function generally becomes: - Answers
flatter because capital is subject to diminishing marginal returns.
The faster the rate of technological progress - Answers the greater the rate of economic growth
In a fully employed economy, invention and discovery: - Answers are achieved through sacrifices in
current consumption
, Which of the following best describes the relationship between economic growth and literacy? -
Answers Increased literacy stimulates economic growth by raising labor productivity, and as the
economy grows, people consume more education.
Sergei has developed a new fat substitute that has no calories and produces no side effects. In order for
him to be encouraged to bring this innovation to the marketplace he is likely to want which of the
following the most? - Answers A patent
The goods and services that are used in the production of other goods and services are called - Answers
Intermediate goods
Which of the following would not be counted as a final good for inclusion in GDP? - Answers a sheet of
glass purchased by General Motors for the side window of a new car
Which of the following products are not included in current U.S. GDP? - Answers a Ford Mustang
produced last year and sold this year
GDP does not directly include - Answers the value of intermediate goods sold during a period
The total dollar value of purchases in the economy is far larger than GDP primarily because: - Answers
GDP excludes the value of intermediate goods exchanged
The largest single expenditure component of GDP is: - Answers Consumption
The most volatile GDP category under the expenditure approach is: - Answers Investment
The investment component of GDP includes - Answers construction of a new steel mill
If a nation's imports exceed its exports: - Answers GDP will be less than the sum of consumption,
investment, and government purchases.
The services rendered by a special agent with the Federal Bureau of Investigation is included in which
expenditure category of GDP? - Answers Government purchases
In 2008, U.S. Nominal GDP totaled approximately: - Answers $14.3 trillion
If the price index is now 120, it means: - Answers prices are 20 percent higher than in the base year.
Which of the following is a problem with using real GDP as a measure of economic well-being? - Answers
does not account for production within the household
Estimates of the size of the underground economy range from: - Answers 4 to 20 percent
Which of the following factors that affect our well-being does GDP fail to adequately account for? -
Answers -changes in the quality of goods
-externalities
GDP is: - Answers the total value of all final goods and services plus intermediate goods and services
produced domestically within a given period.
Final goods or services used to compute GDP refer to: - Answers goods and services purchased by the
ultimate users.
Intermediate products - Answers produced domestically are not directly reflected in a nation's GDP.
Consumption is the purchase of goods and services by: - Answers households
Consumption is the largest single component of GDP. In recent years it represents approximately ____
percent of GDP. - Answers 70%
The expenditure method of measuring GDP is calculated by adding up: - Answers -the final goods and
services produced domestically during a given period.
-Consumption + Investment + Government Spending + (Exports-Imports).
-domestic production of final goods and services for consumers, firms, government, and the
international sector (through net exports).
Net exports are defined as: - Answers exports minus imports
Transfer payments are included in which category under the expenditure approach to GDP accounting? -
Answers Transfer payments are not directly included in GDP calculations
What is the measure of the income received by owners of resources used in making final goods and
services? - Answers factor payments
Which of the following is NOT part of U.S. GDP - Answers the value of a Toyota manufactured in Japan
and sold in the United States
Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita? - Answers a
rate of population growth that is greater than the rate of growth of real GDP
The prosperity of a nation today is typically measured by its: - Answers output per capita
A country will roughly double its GDP in twenty years if its annual growth rate is: - Answers 3.5 percent.
As more capital per worker is added, a per worker production function generally becomes: - Answers
flatter because capital is subject to diminishing marginal returns.
The faster the rate of technological progress - Answers the greater the rate of economic growth
In a fully employed economy, invention and discovery: - Answers are achieved through sacrifices in
current consumption
, Which of the following best describes the relationship between economic growth and literacy? -
Answers Increased literacy stimulates economic growth by raising labor productivity, and as the
economy grows, people consume more education.
Sergei has developed a new fat substitute that has no calories and produces no side effects. In order for
him to be encouraged to bring this innovation to the marketplace he is likely to want which of the
following the most? - Answers A patent
The goods and services that are used in the production of other goods and services are called - Answers
Intermediate goods
Which of the following would not be counted as a final good for inclusion in GDP? - Answers a sheet of
glass purchased by General Motors for the side window of a new car
Which of the following products are not included in current U.S. GDP? - Answers a Ford Mustang
produced last year and sold this year
GDP does not directly include - Answers the value of intermediate goods sold during a period
The total dollar value of purchases in the economy is far larger than GDP primarily because: - Answers
GDP excludes the value of intermediate goods exchanged
The largest single expenditure component of GDP is: - Answers Consumption
The most volatile GDP category under the expenditure approach is: - Answers Investment
The investment component of GDP includes - Answers construction of a new steel mill
If a nation's imports exceed its exports: - Answers GDP will be less than the sum of consumption,
investment, and government purchases.
The services rendered by a special agent with the Federal Bureau of Investigation is included in which
expenditure category of GDP? - Answers Government purchases
In 2008, U.S. Nominal GDP totaled approximately: - Answers $14.3 trillion
If the price index is now 120, it means: - Answers prices are 20 percent higher than in the base year.
Which of the following is a problem with using real GDP as a measure of economic well-being? - Answers
does not account for production within the household
Estimates of the size of the underground economy range from: - Answers 4 to 20 percent
Which of the following factors that affect our well-being does GDP fail to adequately account for? -
Answers -changes in the quality of goods
-externalities
