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Which of the following is counted in GDP?
a. the cost of reconstruction after Hurricane Katrina
b. the value of leisure time
c. the value of cooking your own dinner
d. the value of do-it-yourself work
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A
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It is difficult to compare the U.S. GDP with other countries’ GDP because:
a. Their economy may have many unorganized markets
b. They may calculate GDP using a different time period
c. They may not calculate GDP annually
d. All of the above
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D
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Gross Domestic Product is a monetary measure of
a. total consumption in the economy
b. the total value of all final goods and services
c. total industrial output
d. the total value of all foreign sales and purchases
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B
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This year you purchase a beautiful vintage 1965 Thunderbird convertible. This purchase would
a. be included in this year’s GDP
b. be included in GDP for this year and 1965
c. be included in GDP in 1965
d. be included in this year’s GDP but at a depreciated value
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C
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Dissatisfaction with public education has led many parents to try homeschooling for their children. If parents cut back on their jobs outside the home in order to spend time teaching their children at home, how will this affect GDP?
a. GDP will increase
b. Real GDP will increase and nominal GDP will decrease
c. Both real and nominal GDP will increase
d. GDP will decrease
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D
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Which of the following is counted in GDP?
a. the value of illegally produced goods
b. the value of volunteer work performed at a homeless shelter
c. the cost of government provided social services such as public education
d. the value of illegal drug sales
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C
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Intermediate goods, like milk sold by a farmer to a supermarket, are
a. included in GDP
b. included in GDP at market value
c. included if it is imported
d. are not included in GDP
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D
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Amber grows basil in her backyard garden to use in her homemade pesto sauce. How is this gardening included in GDP?
a. It is included only when the sauce is completed
b. It is included as an intermediate good
c. It is not included in GDP
d. It is not included in GDP because it is illegal to grow oregano
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C
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Since countries differ in the amount of economic activity that is transacted in organized markets
a. some countries are more productive than others
b. persons live better in some countries than others
c. international comparisons of per capita GDP are often misleading
d. comparisons between countries is impossible
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C
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The Growth rate of GDP over time illustrates that:
a. GDP grows quickly after wartime periods
b. GDP fluctuated more intensely during the first half of the 20th century than the second half
c. GDP was not influenced by the influx of women into the labor market in the 1960s
d. GDP grows smoothly during all time periods
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B
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Nominal GDP is another term for
a. current dollar GDP
b. constant dollar GDP
c. relative value GDP
d. real GDP
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A
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Which of the following would tend to increase the value of officially measured GDP?
a. decriminalization of drugs such as marijuana and cocaine
b. decriminalization of prostitution
c. decriminalization of gambling on basketball and football
d. all of the above
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D
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Real GDP is another term for
a. current dollar GDP
b. constant dollar GDP
c. relative value GDP
d. nominal GDP
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B
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GDP is not a measure of well-being because it does not include:
a. All work outside of the home
b. illegal activities such as drug sales
c. environmental degradation
d. college students efforts while studying for macroeconomics
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C
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Which of the following is not included in U.S. GDP?
a. Honda Motor Company in Atlanta, Georgia
b. Dell computers in India
c. A Mexican immigrant working in Los Angeles, CA
d. Dell computers in San Francisco, CA
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B
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Large sport utility vehicles (SUVs) add significantly to air pollution because they do not have to meet passenger auto emission standards. The purchase of an SUV
a. adds less to GDP since the pollution costs are subtracted from GDP.
b. adds to nominal but not real GDP because of the pollution costs.
c. is a net loss to GDP because the pollution costs are so large.
d. increases GDP.
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D
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Poor Asian countries may have per-capita GDP’s that may be less than $250. Why is this somewhat misleading for comparative purposes?
a. Most rich country GDP is nonmarket activity.
b. A significant amount of poor country GDP is nonmarket activity.
c. Poor countries do not use dollars.
d. Poor countries have few resources.
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B
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If hot dogs cost $2 this year and $3 next year, then 100 hotdogs will contribute
a. $200 to this year’s nominal GDP and $166 to next year’s nominal GDP.
b. $200 to this year’s real GDP and $300 to next year’s real GDP.
c. the same dollar amount to each year’s nominal GDP because hotdogs are intermediate goods.
d. $200 to this year’s nominal GDP and $300 to next year’s nominal GDP.
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D
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In the period before the Korean War, the U.S. economy
a. was very stable.
b. was in a constant period of depression.
c. was in a constant inflationary period.
d. was subject to significant fluctuations.
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D
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General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the UnitedStates. In which country’s GDP is it included?
a. Sweden and the United States
b. The United States because it was sold there
c. The United States because GM is a U.S. company
d. Sweden because it was produced there
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D
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Which of the following is counted in GDP?
a. the cost of the reconstruction and cleanup following September 11, 2001.
b. the value of leisure time
c. the value of a househusband’s work at home
d. the value of your do-it-yourself work
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A
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In the past 100 years, the U.S. economy has primarily experienced
a. deflation.
b. unemployment.
c. inflation.
d. depression
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C
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International per capita GDP comparisons are misleading when countries involved differ greatly in
a. the type of economic system each country uses to solve its economic problem.
b. the freedom of their election processes.
c. the percentage of economic activity that is transacted in organized markets.
d. the quantity of human and natural resources they possess.
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C
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One major effect of the Great Depression was
a. it reaffirmed everyone’s faith that capitalism was a self-correcting system.
b. it encouraged voters to limit the role of gov’t
c. the creation of the rational expectations school of economic theory
d. a decreased faith in the ability of economies to automatically correct major problems
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D
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You are a collector of antique coins. You purchase a silver dollar minted in 1898. Is this sale included in GDP for the current year?
a. Yes, provided the coin is in mint condition.
b. No, it is not.
c. No, unless the coin has been in circulation.
d. Yes, it is.
e. Only if it is part of the current money supply
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B
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An example of an intermediate good would be
a. a new car.
b. a used car.
c. a tire for a new car.
d. new tires to replace old tires on a used car.
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C
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Which of the following transactions would be included in GDP for 2001?
a. On January 5, 2001, Chris Carter sold 100 shares of stock in IBM Corporation.
b. Bonita Delgado purchases a new 2001 Oldsmobile on March 10, 2001.
c. Nadav Daniel buys a used desk from the "Struggling Students Used Furniture" store on May 9, 2001.
d. Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2001.
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B
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A good produced in 2000 and held in inventory until it is sold in 2001 would be included in which measure of GDP?
a. Half the value in 2000 and half the value in 2001
b. In 2001 GDP
c. In both 2000 and 2001 GDP
d. In 2000 GDP
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d
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If Honda (a Japan-based firm) produces a car in Ohio and exports it to Japan, in which country’s GDP will the car be counted?
a. Japan’s, because Honda is a Japanese company
b. The GDP of the United States because that is where it was built
c. Japan’s because that is where the car is purchased
d. Both Japan and the United States
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B
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Gross Domestic Product is best described as the
a. measure of a nation’s total economic welfare.
b. national income, including nonmarket income.
c. sum of money values of all final output produced in the domestic economy within the year.
d. national output minus environmental damage.
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C
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Gross Domestic Product is the
a. least inclusive aggregate used to measure the economy
b. total of goods and services desired by consumers
c. the most comprehensive measure of total output in the United States
d. the most accurate measure of the trade balance of the United States
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C
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When people smoke cigarettes, their friends and family members may become sick. This affects GDP by
a. reducing GDP by the amount of medical care needed.
b. reducing GDP by the cost of the cigarettes purchased.
c. increasing GDP by the cost of the medical care and the cost of the cigarettes purchased.
d. decreasing GDP by the cost of the medical care and increase GDP by the cost of the cigarettes purchased
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C
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Aneta has owned an Italian sports car for several years and now she wants to sell it. She paid $8,500 for it in 1993 and she has just sold it for $19,000 in 2001. How is this sale included in the GDP for 2001?
a. $8,500 is included in 2001 GDP
b. $19,000 is included in 2001 GDP
c. The increase in the value of $10,500 is included in 2001 GDP
d. It is not included in 2001 GDP
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D
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