Question 1

If GDP per capita was $500 in 2002 and the population was 25,000,the GDP would have been approximately

Accepted Answer

D

Question 2

Suppose you volunteer to help clean up your neighborhood,and the only payment you receive is the sense of goodwill that develops with your neighbors.Your efforts cause the GDP of the economy to

Accepted Answer

GDP measures the market value of all final goods and services produced within a country in a given period. Volunteer work, which is not paid and does not involve a market transaction, does not affect GDP. Therefore, GDP remains unchanged by volunteer activities.

Question 3

GDP per capita

Accepted Answer

GDP per capita is calculated by dividing a nation's GDP (total value of goods and services produced in a country) by its population, thus giving an average GDP per person. This measure allows for comparisons of the economic welfare of different nations. Option B is incorrect as it contradicts the purpose of calculating GDP per capita. Option C refers to real GDP, which is different from GDP per capita. Option D is also incorrect as GDP per capita does not necessarily indicate the most efficient use of resources.

Question 4

National income accounts assist

Accepted Answer

National income accounts are used by economic policy makers to evaluate the performance of the economy and formulate policies. They provide information about the overall size and composition of an economy's output, the level of employment and wages, and the distribution of income. This information is used to inform decisions about taxes, government spending, and monetary policy. While national income accounts may indirectly impact market investors and individuals, they are primarily designed to assist policy makers.

Question 5

Which of the following statements is correct concerning GDP and GNP?

Accepted Answer

GDP measures the total value of goods and services produced within a nation's borders, regardless of the nationality of the factors of production used. GNP, on the other hand, measures the total value of goods and services produced by a nation's factors of production, whether they are located within the nation's borders or not. Therefore, option A is the correct statement.

Question 6

A nation's GDP is

Accepted Answer

GDP (Gross Domestic Product) is the total value of all goods and services produced within a country's borders in a given time period (usually a year). It is calculated by adding up consumption (C), investment (I), government spending (G), and net exports (X - M).

Question 7

If GDP grows more rapidly than population for a particular country over a period of time,then we can determine that

Accepted Answer

If GDP grows more rapidly than population, this means that the economy is producing more goods and services per person. This leads to an increase in GDP per capita, indicating that each individual is better off in terms of the amount of goods and services they have access to. Real GDP has not necessarily decreased, and there is no indication that GDP must rise at a slower rate in the future.

Question 8

For an economy with only two goods,skate boards can be added to bicycles to compute the GDP by

Accepted Answer

To compute the GDP, we need to take the output of each good (in units) and multiply it by its price in dollars. Then we add up the resulting dollar values to obtain the GDP. Therefore, choice A is the correct choice. Choice B is incorrect because we do not divide output by price. Choice C is incorrect because we should multiply output by price, not the other way around. Choice D is incorrect because we should not divide dollar values of output by price, but rather multiply output by price to obtain dollar values.

Question 9

A nation's GDP can be calculated as

Accepted Answer

GDP can be calculated as the total value added at all stages of production, which means the final value of the product minus the cost of intermediate goods. GDP does not include depreciation, which is accounted for separately in measures like net national product (NNP) or gross national product (GNP). Therefore, options C and D are incorrect. Option A is partially correct, but it only accounts for the value added and does not subtract the cost of intermediate goods, resulting in an overestimate of GDP.

Question 10

If a nation has GDP of $12,500 billion and GDP per capita of $62,500,what is the nation's population?

Accepted Answer

The nation's population is calculated by dividing the GDP by the GDP per capita: $12,500 billion / $62,500 = 200 million.

Question 11

Which of the following is treated differently in computations of GNP as compared with GDP?

Accepted Answer

GDP only measures economic production within a country's borders, while GNP includes production by a country's firms located in foreign countries.

Question 12

GDP can be calculated by all of the following methods except

Accepted Answer

Adding up all income and expenses by consumers and businesses is not a method for calculating GDP. The correct methods are A, B, and C.

Question 13

Prices are used in national income accounting for all of the following reasons except to

Accepted Answer

Prices are not used to measure unemployment in national income accounting. Unemployment is measured using labor force data, such as the number of people employed and unemployed. Prices are used to measure the value of output and provide an index to measure the rate of inflation.

Question 14

Suppose Blu-Ray players cost consumers $300 and Blu-Ray disks cost consumers $30.What contribution does the production of 250 Blu-Ray players and 3,000 Blu-Ray disks make to the GDP?

Accepted Answer

The contribution to GDP can be calculated by adding the total value of final goods and services produced. In this case, the production of 250 Blu-Ray players would contribute $75,000 to the GDP ($300 x 250), and the production of 3,000 Blu-Ray disks would contribute $90,000 to the GDP ($30 x 3,000). Therefore, the total contribution to the GDP would be $165,000 ($75,000 + $90,000).

Question 15

Which of the following is excluded from calculations of GDP?

Accepted Answer

The value of lawn mowing provided by a teenager for his own family is excluded from calculations of GDP because it is not a market transaction. GDP measures the market value of all final goods and services produced within a country during a specific time period. Goods that are produced and sold, income received by managers of corporations, and goods that bring little value to society are all included in GDP calculations.

Question 16

Suppose a friend claims he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP.Your friend is

Accepted Answer

Cleaning up the streets requires labor and resources, which are economic activities that contribute to GDP.

Question 17

National income accounting is defined as the

Accepted Answer

National income accounting is the measurement of aggregate economic activity, such as the gross domestic product (GDP), which includes factors such as consumption, investment, government spending, and net exports. It is used to measure and analyze the overall economic performance of a country.

Question 18

The GDP per capita is the most practical way to

Accepted Answer

GDP per capita is commonly used as a measure of the standard of living in a country because it provides a rough estimate of the average amount of economic output that each person in a country has access to. It allows for easy international comparisons of the standard of living between different countries, based on their GDP per capita. While it can also be used to analyze the growth rate of an economy over time, it is not the most practical way to measure household income or sustainable consumption.

Question 19

Suppose iPhones cost consumers $200 and USB cables cost consumers $25.What contribution does the production of 2,000 iPhones and 1,200 USB cables make to GDP?

Accepted Answer

The answer of Suppose iPhones cost consumers $200 and USB...

Question 20

Which of the following would be included in U.S.GNP but not in U.S.GDP?

Accepted Answer

Gross National Product (GNP) includes the total market value of all goods and services produced by the residents of a country, regardless of where they are located. Therefore, chipsets produced by U.S.-owned firms operating in China would be included in the U.S. GNP because they are produced by U.S. residents, but not in the U.S. GDP, which only includes goods and services produced within the country's borders.

Quiz 5: National Income Accounting