Question 1

As per capita GDP has risen in the United States and other countries,
A) life expectancy and leisure time have also risen and infant mortality and illiteracy have gone down..
B) life expectancy has risen but leisure time has gone down, while infant mortality and illiteracy have remained the same.
C) various quality of life variables have been unaffected.
D) most quality of life variables such as life expectancy and expenditures on leisure time activities have fallen.

Accepted Answer

As per capita GDP has risen, there has been an overall improvement in living standards, including a rise in life expectancy and leisure time, and a decrease in infant mortality and illiteracy. This trend is seen not just in the United States but also in other countries around the world.

Question 2

Use the table below to choose the correct answer.  Gross domestic product equals
A) $550.
B) $510.
C) $595.
D) $610.

Accepted Answer

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

Question 3

If the cost-of-living indices were 100 in Chicago, 150 in Boston, and 190 in New York City, which of the following annual pay rates for jobs would provide you with the most purchasing power over goods and services?
A) A $75,000 job in Boston.
B) A $100,000 job in New York City.
C) A $50,000 job in Chicago.
D) A $90,000 job in New York City.

Accepted Answer

The answer of If the cost-of-living indices were 100 in...

Question 4

Accurate measurement of GDP is important to business decision-makers because this information will help them better determine the
A) general happiness of a country's citizens.
B) course of the economy and the direction of demand for their products.
C) economic well-being of a particular group within a country.
D) amount of leisure time available and the quality of life in a country.

Accepted Answer

Accurate measurement of GDP helps business decision-makers determine the course of the economy and the direction of demand for their products, which can guide their business strategy and investment decisions. It does not provide information about general happiness or quality of life, or the economic well-being of specific groups within the country.

Question 5

If the cost-of-living indices were 100 in Dallas, 150 in Boston, and 220 in San Francisco, which of the following annual pay rates for jobs would provide you with the most purchasing power over goods and services?
A) A $80,000 job in Boston.
B) A $110,000 job in San Francisco.
C) A $50,000 job in Dallas.
D) A $100,000 job in San Francisco.

Accepted Answer

The answer of If the cost-of-living indices were 100 in...

Question 6

Gross domestic product (measured in real dollars) is an important social tool because it provides
A) observers with a reasonably good index of social progress.
B) policy makers with a measure of the nation's total wealth.
C) policy makers with information about the economy's current rate of output and the direction of recent changes.
D) economists with a reasonably good measure of income inequality.

Accepted Answer

Gross domestic product (GDP) measured in real dollars provides policy makers with information about the economy's current rate of output and the direction of recent changes. It is an important tool for assessing the overall health of the economy and for making policy decisions about how to manage it. However, GDP alone cannot provide a complete picture of social progress or income inequality.

Question 7

Economists generally use GDP to measure a nation's total output because it is
A) equal to the sales value of all transactions conducted during a period and thus can be easily calculated.
B) the best available measure of the true costs of producing consumer goods.
C) unaffected by changes in the prices of products over time.
D) a relatively reliable measure of the value of all final product goods and services produced during a specific time period.

Accepted Answer

GDP is considered a reliable measure of the value of final goods and services produced within a specific period. It takes into account the market value of all goods and services produced within the country, regardless of whether they are sold domestically or internationally. While changes in product prices can impact GDP, it is considered relatively unaffected by inflation or changes in input costs.

Question 8

The real GDP data could be properly thought of as
A) an index of our economic well-being.
B) a measure of the total wealth of a nation.
C) an index of total output or productive activity.
D) an index that measures the size of government.

Accepted Answer

Real GDP is a measure of the total output or productive activity of a nation adjusted for inflation. It is often used as an indicator of the overall health and growth of an economy. It is not a measure of total wealth or the size of government.

Question 9

Economists generally use gross domestic product to measure a nation's total output because it
A) equals the sales value of all transactions conducted during a period and, thus, can be easily calculated.
B) is the best available measure of the market value of all final goods and services produced during a period.
C) is unaffected by changes in the prices of products over time.
D) is a reliable indicator of the social progress of a nation over time.

Accepted Answer

Gross domestic product is the market value of all final goods and services produced within a country in a given period of time. It is considered the best measure of a country's economic output because it captures the production of all goods and services consumed within a country, regardless of the nationality of the producers or the ownership of the production factors. It is also adjusted for inflation, which makes it a more reliable measure of economic growth over time.

Question 10

What do cost of living indexes across cities measure?
A) The change in the general level of prices that occurred in each city during the year.
B) The average earnings of persons employed in the city during the year.
C) Differences in prices that affect the cost of purchasing a typical bundle of goods and services in each of the cities.
D) Changes in the earnings of the typical person working in each of the cities during the year.

Accepted Answer

Cost of living indexes measure differences in prices that affect the cost of purchasing a typical bundle of goods and services in each of the cities. These indexes take into account the prices of various goods and services such as housing, groceries, transportation, utilities, and healthcare to provide a comparison of the relative cost of living between different cities. They are often used by individuals and businesses to make decisions about relocating or expanding into new areas.

Question 11

National income is
A) personal income of individuals minus the taxes they pay.
B) gross national product minus depreciation.
C) employee compensation, self-employment income, interest, rents, plus corporate profits.
D) consumption, investment, government expenditures, and net exports.

Accepted Answer

National income is the total income earned by a country's factors of production (i.e. labor and capital) in a given time period. This includes employee compensation, self-employment income, interest, rents, and corporate profits. Option A is incorrect as it only includes the personal income of individuals, while ignoring corporate profits. Option B is incorrect as it only considers the depreciation of gross national product without accounting for other sources of income. Option D is incorrect as it lists the components of gross domestic product rather than national income.

Question 12

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?
A) The real capacity of the economy increased more rapidly than money output.
B) In the international sector, there was a balance of trade deficit of approximately 2 percent of GDP.
C) The inflation rate was approximately 6 percent during the year.
D) The general level of prices rose approximately 2 percent.

Accepted Answer

The nominal GDP increased by 4%, while real GDP fell by 2%, indicating that the inflation rate was approximately 6%, as nominal GDP includes inflation.

Question 13

Use the table below to choose the correct answer. Table 7-7
 Refer to Table 7-7. Gross domestic product equals
A) $3,700.
B) $3,900.
C) $4,080.
D) $4,480.

Accepted Answer

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

Question 14

Which of the following would be most appropriate for the measurement of differences in the average standard of living of people at different points in time?
A) nominal GDP
B) real GDP
C) nominal GDP per capita
D) real GDP per capita

Accepted Answer

Real GDP per capita would be the best choice as it adjusts for both inflation and changes in population size, making it a more accurate measure of changes in the average standard of living over time. Nominal GDP and nominal GDP per capita do not account for inflation, which can distort the true value of economic output. Real GDP is adjusted for inflation but does not account for changes in population size.

Question 15

Use the table below to answer the following question(s).  Refer to Table 7-5. National income equals
A) $1,380.
B) $1,530.
C) $1,860.
D) $4,170.

Accepted Answer

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

Question 16

Per capita GDP is
A) real GDP divided by the GDP deflator
B) a measure of income per person
C) a measure of resources available to each person
D) an indicator of the overall production of a government

Accepted Answer

Per capita GDP is a measure of income per person, calculated by dividing the real GDP of a country by its population. It reflects the level of economic well-being of the individuals in a country.

Question 17

The primary value of data for real GDP lies in its ability to
A) reflect the welfare of a society relative to a previous period.
B) compare a nation's productivity during two periods widely separated in time.
C) indicate short-term changes in the output rate of a nation.
D) indicate how hard the people of a nation are working.

Accepted Answer

Data for real GDP is used to indicate short-term changes in the output rate of a nation. It measures the value of goods and services produced in an economy over a period of time and is often used as a key indicator of economic health. While it can also reflect changes over longer periods of time and be used for international comparisons, its primary value lies in its ability to show changes in a country's economic output in the short-term.

Question 18

Consider the following information for the U.S. economy (figures in billions). Table 7-6
 Refer to Table 7-6. What was the value of national income?
A) $7,123
B) $7,666
C) $8,841
D) $11,004

Accepted Answer

National income is calculated as the sum of all income earned by the factors of production (wages + interest + rent + profit). In Table 7-6, the sum of these income components equals $8,841 billion.

Question 19

Use the table below to answer the following question(s). Table 7-5
 Refer to Table 7-5. Gross national product equals
A) $1,860.
B) $1,910.
C) $1,380.
D) $4,170.

Accepted Answer

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

Question 20

If the cost of living index in San Francisco was 210 compared to 100 in Kansas City, which of the following would be true?
A) A $100,000 job in San Francisco would provide one with more than four times the purchasing power as a $50,000 job in Kansas City.
B) A $100,000 job in San Francisco would provide one with twice the purchasing power of a $50,000 job in Kansas City.
C) A $100,000 job in San Francisco would provide one with more purchasing power than a $50,000 job in Kansas City.
D) A $100,000 job in San Francisco would not provide one with as much purchasing power as a $50,000 job in Kansas City.

Accepted Answer

The cost of living index indicates that San Francisco is more than twice as expensive as Kansas City. Therefore, a $100,000 salary in San Francisco would not provide as much purchasing power as a $50,000 salary in Kansas City.

Quiz 7: Taking the Nations Economic Pulse

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

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

If the cost-of-living indices were 100 in Chicago, 150 in Boston, and 190 in New York City, which of the following annual pay rates for jobs would provide you with the most purchasing power over goods and services?

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

If the cost-of-living indices were 100 in Dallas, 150 in Boston, and 220 in San Francisco, which of the following annual pay rates for jobs would provide you with the most purchasing power over goods and services?

Gross domestic product (measured in real dollars) is an important social tool because it provides

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

The real GDP data could be properly thought of as

Economists generally use gross domestic product to measure a nation's total output because it

What do cost of living indexes across cities measure?

National income is

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?

Use the table below to choose the correct answer. Table 7-7 Refer to Table 7-7. Gross domestic product equals

Which of the following would be most appropriate for the measurement of differences in the average standard of living of people at different points in time?

Use the table below to answer the following question(s) . Refer to Table 7-5. National income equals

Per capita GDP is

The primary value of data for real GDP lies in its ability to

Consider the following information for the U.S. economy (figures in billions) . Table 7-6 Refer to Table 7-6. What was the value of national income?

Use the table below to answer the following question(s) . Table 7-5 Refer to Table 7-5. Gross national product equals

If the cost of living index in San Francisco was 210 compared to 100 in Kansas City, which of the following would be true?