Question 1

Which of the following would increase U.S. GDP?

Accepted Answer

B

Question 2

If on-the-job working conditions have improved over time,

Accepted Answer

A

Question 3

Explain the two approaches to calculating GDP.

Accepted Answer

One approach involves adding up the expenditures on goods and services produced during the year. This figure would be the sum of personal consumption expenditures, government consumption and gross expenditures, gross private domestic investment, and net exports to foreigners. The other approach is calculated by adding up the income payments to resource suppliers and the other costs of producing those goods and services. Specifically, this method would sum employee compensation, proprietors' income, interest, rents, corporate profits, indirect business taxes, cost of depreciation, and the net income of foreigners.

Question 4

Which of the following accurately indicates how the recent outbreaks of terrorism have influenced the GDP of western nations?

Accepted Answer

The answer of Which of the following accurately indicates how...

Question 5

Answer the following questions:
a.What does GDP measure, and why is it a useful tool for economists, business decision makers, and government policy makers?
b.Explain at least two important things GDP does not measure.

Accepted Answer

The answer of Answer the following questions:
a.What does GDP measure,...

Question 6

How much would be added to this year's GDP if you sold your four-year-old automobile for $4,000 and purchased a two-year-old model from an acquaintance for $10,000.

Accepted Answer

The answer of How much would be added to this...

Question 7

Use the table below to choose the correct answer.  Gross domestic product equals

Accepted Answer

The answer of Use the table below to choose the...

Question 8

What is the difference between real and nominal GDP? If the president of the United States (or your instructor) asked you to evaluate the economy over the past five years, which one would you use and why?

Accepted Answer

The answer of What is the difference between real and...

Question 9

National income is

Accepted Answer

National income is the total income earned by residents of a country, including employee compensation, self-employment income, interest, rents, and corporate profits. Option A refers to disposable income, which is personal income minus taxes paid. Option B refers to net domestic product, which is gross domestic product minus depreciation. Option D refers to the components of gross domestic product.

Question 10

The consumer price index is calculated using a fixed basket of goods. Will this always give an accurate representation of the changing cost of living to consumers? Why or why not?

Accepted Answer

The answer of The consumer price index is calculated using...

Question 11

Economists generally use GDP to measure a nation's total output because it is

Accepted Answer

GDP is a widely used measure of a nation's total output because it provides a relatively reliable estimate of the value of all final goods and services produced within an economy during a specific time period. While it is not a perfect measure, it is currently the most comprehensive and widely accepted metric available for this purpose. Option A is incorrect because GDP is not equal to the sales value of all transactions, but rather only includes the final value of goods and services produced within a country. Option B is incorrect because GDP does not reflect the true costs of producing consumer goods, but rather the overall value of output produced within an economy. Option C is incorrect because GDP is affected by changes in the prices of products over time, which is why economists use various adjustments to account for inflation and other factors that can affect the overall value of output.

Question 12

Which of the following would be counted in the calculation of GDP?

Accepted Answer

The answer of Which of the following would be counted...

Question 13

The dollar value of GDP increased approximately 4 percent during the year, but real GDP fell 2 percent. Which of the following best explains this data?

Accepted Answer

The answer of The dollar value of GDP increased approximately...

Question 14

Answer the following questions:
a.In 2004, four major hurricanes hit Florida.Explain how this destruction of property, and the rebuilding that went on afterward, affected GDP.
b.Explain how GDP has trouble accounting for other parts of the economy as well.

Accepted Answer

The answer of Answer the following questions:
a.In 2004, four major...

Question 15

Your father tells you he earned $3.00 per hour when he was 16 in 1977; you remember making $6.00 per hour when you were 16 in 1999. Given that the CPI was 36.7 in 1977 and 166.1 in 1999, which of the following is the 1999 real equivalent of your father's hourly earnings when he was 16?

Accepted Answer

The answer of Your father tells you he earned $3.00...

Question 16

Figure 9-3 
-Accurate measurement of GDP is important to business decision-makers because this information will help them better determine the

Accepted Answer

Accurate measurement of GDP helps business decision-makers understand the overall course of the economy and the direction of demand for their products. It provides them with a sense of the size and health of the market they operate in, helping them make informed decisions about investments, expansions, and other business strategies. It does not directly provide information about the general happiness of a country's citizens, the economic well-being of a particular group within a country, or the amount of leisure time available and the quality of life in a country.

Question 17

Per capita GDP is

Accepted Answer

Per capita GDP is a measure of income per person, which is calculated as the total GDP of a country divided by its population. It gives an idea about the average standard of living of people in a country. Option A is incorrect because dividing real GDP by the GDP deflator gives us nominal GDP, not per capita GDP. Option C is incorrect because per capita GDP does not measure resources available to each person, but rather the income earned by each person. Option D is incorrect because per capita GDP is a measure of income, not production.

Question 18

If the GDP deflator in 2009 was 120 compared to a value of 100 during the 2004 base year, this would indicate that

Accepted Answer

The GDP deflator is a measure of the general level of prices for all goods and services in an economy. In 2009, the GDP deflator was 120 compared to a base year value of 100 in 2004. This indicates that the general level of prices in 2009 was 20 percent higher than in 2004. Option A and C are incorrect as they both suggest that the inflation rate was 20 or 120 percent, respectively, which is not accurate. Option D is incorrect because the GDP deflator does not measure changes in real GDP, but rather the general level of prices.

Question 19

Assume that between 1999 and 2009 nominal GDP increased from $7 trillion to $12 trillion and that the GDP deflator rose from 100 to 150. Which of the following expresses GDP for 2009 in terms of 1999 prices?

Accepted Answer

To express GDP for 2009 in terms of 1999 prices, we need to adjust nominal GDP for inflation using the GDP deflator. We use the formula: Real GDP = Nominal GDP / GDP deflator x 100.

Real GDP in 2009 = $12 trillion / 150 x 100 = $8 trillion

Therefore, the answer is choice B, $8.0 trillion.

Question 20

As per capita GDP has risen in the United States and other countries,

Accepted Answer

As per capita GDP has risen in the United States and other countries, life expectancy and leisure time have also risen and infant mortality and illiteracy have gone down, indicating an improvement in various quality of life variables.

Quiz 7: Taking the Nations Economic Pulse