Deck 23: 5: Sec 235 Mc Is Gdp a Good Measure of Economic Well-Being

Question 1

International data on GDP and socioeconomic variables

A)are inconclusive about the relationship between GDP and the economic well-being of citizens.
B)suggest that poor nations actually might enjoy a higher standard of living than do rich nations.
C)leave no doubt that a nation's GDP is closely associated with its citizens' standard of living.
D)indicate that there are few real differences in living standards around the world,in spite of the large differences in GDP between nations.

Answer 1

D

Question 2

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year).Based on this scenario,which of the following statements is correct?

A)GDP would definitely increase,despite the fact that GDP includes leisure.
B)GDP would definitely increase because GDP excludes leisure.
C)GDP could either increase or decrease because GDP includes leisure.
D)GDP could either increase or decrease because GDP excludes leisure.

Answer 2

B

Question 3

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size.In the meantime,population grew by 40 percent and prices rose by 100 percent.What happened to real GDP per person?

A)It more than doubled.
B)It increased,but it less than doubled.
C)It was unchanged.
D)It decreased.

Answer 3

C

Question 4

Which of the following is a true statement?

A)International data leave few doubts that a nation's GDP per person is associated with its citizens' standard of living.
B)Rich and poor countries often have vastly different standards of living,but similar levels of real GDP per person.
C)The value of leisure time is included in the calculation of GDP per person.
D)International data indicate that measures on the distribution of income are closely associated with GDP per person.

Question 5

The information for 2008 in millions in the table below was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of real GDP per person from highest to lowest?
Country
GDP (Constant US$)
GDP(Current US$)
Population
Germany
2,091,573
3,649,493
82)11
Japan
5,166,281
4,910,839
127)70
U)S.
11,513,872
14,093,309
304)06

A)Japan,Germany,United States
B)Japan,United States,Germany
C)Germany,United States,Japan
D)United States,Japan,Germany

Question 6

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are not measured as part of GDP.It follows that

A)GDP is not a useful measure of society's welfare.
B)GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government.
C)GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.
D)GDP is still the best measure of society's welfare because these other values cannot actually be measured.

Question 7

GDP does not reflect

A)the value of leisure.
B)the value of goods and services produced at home.
C)the quality of the environment.
D)All of the above are correct.

Question 8

During a presidential campaign,the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office.You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years.You should conclude that real GDP per person

A)grew by more than 12 percent.
B)grew,but by less than 12 percent.
C)was unchanged.
D)decreased.

Question 9

Suppose that twenty-five years ago a country had nominal GDP of $1,000,a GDP deflator of 200,and a population of 100.Today it has nominal GDP of $3,000,a GDP deflator of 400,and population of 150.What happened to the real GDP per person?

A)It more than doubled.
B)It increased,but it less than doubled.
C)It was unchanged.
D)It decreased.

Question 10

GDP per person tells us the income and expenditure of the

A)richest person in the economy.
B)poorest person in the economy.
C)average person in the economy.
D)entire economy.

Question 11

The information below for 2008 in millions was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest?
Country
GDP (Constant US$)
GDP(Current US$)
Population
Argentina
$394,595
$328,465
39)88
Bolivia
$11,373
$16,674
9)69
Peru
$84,241
$129,109
28)84

A)Argentina,Bolivia,Peru
B)Argentina,Peru,Bolivia
C)Bolivia,Argentina,Peru
D)Peru,Bolivia,Argentina

Question 12

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

A)saving per person.
B)GDP per person.
C)government expenditures per person.
D)investment per business firm.

Question 13

GDP is not a perfect measure of well-being;for example,

A)GDP excludes the value of volunteer work.
B)GDP does not address the distribution of income.
C)GDP does not address environmental quality.
D)All of the above are correct.

Question 14

The underground economy

A)excludes the amount of criminal activity in an economy.
B)is larger for developed nations than developing nations when measured as a percent of GDP.
C)includes otherwise legal transactions that go unreported or unrecorded.
D)in the United States is insignificant is size when compared to the official measure of GDP.

Question 15

GDP is not a perfect measure of well-being;for example,

A)GDP incorporates a large number of non-market goods and services that are of little value to society.
B)GDP places too much emphasis on the value of leisure.
C)GDP fails to account for the quality of the environment.
D)All of the above are correct.

Question 16

The information below for 2008 in millions was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest?
Country
GDP (Constant US$)
GDP(Current US$)
Population
Ghana
7,690
16,653
23)35
Kenya
17,569
30,354
38)76
Tanzania
15,394
20,490
41)276

A)Ghana,Kenya,Tanzania
B)Ghana,Tanzania,Kenya
C)Kenya,Tanzania,Ghana
D)Kenya,Ghana,Tanzania

Question 17

On the basis of the information presented in the table below,which presents the correct ordering of real GDP per person from highest to lowest?
Country
Real GDP
Population
Atlantis
$4,800 billion
127 million
Merpois
$240 billion
7)2 million
Bensalem
$9,800 billion
280 million

A)Atlantis,Merpois,Bensalem
B)Bensalem,Atlantis,Merpois
C)Atlantis,Bensalem,Merpois
D)Bensalem,Merpois,Atlantis

Question 18

Which of the following statements regarding GDP is correct?

A)GDP includes factory production,but not any harm that may be inflicted on the environment.
B)GDP accounts for all activities taking place outside markets.
C)GDP provides detailed information about the distribution of income.
D)GDP is a good measure of economic well-being for all purposes.

Question 19

Suppose the government eliminates all environmental regulations and,as a result,the production of goods and services increases,but there is considerably more pollution.Based on this scenario,which of the following statements is correct?

A)GDP would definitely increase,despite the fact that GDP includes environmental quality.
B)GDP would definitely decrease because GDP includes environmental quality.
C)GDP would definitely increase because GDP excludes environmental quality.
D)GDP could either increase or decrease because GDP excludes environmental quality.

Question 20

Last year country A had a nominal GDP of $600 billion,a GDP deflator of 150 and a population of 40 million.Country B had a nominal GDP of $720 billion,a GDP deflator of 120 and a population of 50 million.From these numbers which country is likely to have had the higher standard of living?

A)Country A because it had the higher nominal GDP per person.
B)Country B because it had the higher nominal GDP per person.
C)Country A because it had the higher real GDP per person.
D)Country B because it had the higher real GDP per person.

Question 21

Rank the countries from highest to lowest based on underground economic activity as a percentage of GDP.

A)Bolivia,Thailand,United States,Sweden.
B)Thailand,United States,Sweden,Bolivia.
C)United States,Bolivia,Sweden,Thailand.
D)Bolivia,Thailand,Sweden,United States.

Question 22

Underground economic activity as a percentage of GDP was highest in

A)Bolivia.
B)Mexico.
C)Australia.
D)the United States.