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Saturday, August 27, 2011

Take-Home Quiz 2

Write the letter of the correct answer on the same one whole yellow paper you have used in Take-Home Quiz 1

1. Gross domestic product measures
A) the total spending of everyone in the economy.
B) the value of all output in the economy.
C) the total income of everyone in the economy.
D) all of the above

2. Which of the following is an example of a final good or service?
A) wheat a bakery purchases to make bread
B) coffee beans Starbucks purchases to make coffee
C) lumber purchased by a construction company to used in building houses
D) a computer purchased by Federal Express to track shipments

3. Which of the following is a good or service counted in GDP?
A) tires Ford buys to put on a car
B) a used tire you buy for your personal car
C) a new tire you buy for your personal car
D) used tires bought by a used car dealer to put on a car on his lot

4. Double counting can be avoided by
A) including the value of intermediate goods in the current year.
B) not counting the value of intermediate goods in GDP.
C) including the value of intermediate goods in the GNP but not in the GDP.
D) including the value of intermediate goods in the production year but not in the selling
year of those goods.

5. Which of the following would NOT be counted in 2007ʹs GDP?
A) the value of a 2005 boat you purchase from a boat dealer in 2007
B) the 2007 salary of a used motorcycle salesperson
C) the commissions earned by a real estate agent in selling condominiums built prior to
2007
D) the value of a refrigerator manufactured in 2007 but not sold in 2007

6. If no foreign companies produce in a country, but many of the countryʹs companies produce
abroad, then
A) the countryʹs GNP will tend to exceed its GDP.
B) the countryʹs GDP will tend to exceed its GNP.
C) the countryʹs GNP and GDP will tend to be equal.
D) the countryʹs GDP will tend to be equal to its domestic income

7. The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese
________.
A) GDP; GDP B) GNP; GNP C) GNP; GDP D) GDP; GNP

8. Income Mexican citizens earn in the U.S. counts in
A) U.S. GNP. B) Mexican GNP.
C) Mexican GDP. D) both U.S. and Mexican GDP.

9. The single largest expenditure component in GDP is
A) government spending. B) investment.
C) consumption. D) net exports

10. The total value of all capital goods newly produced in a given period is
A) the change in business inventories. B) depreciation.
C) net investment. D) gross investment.

11. When calculating GDP, exports are ________ and imports are ________.
A) added; added B) added; subtracted
C) subtracted; added D) subtracted; subtracted

12. What type of tax affects the amount of money you pay for a product?
A) direct tax B) income tax
C) indirect tax D) all of the above

13. Nominal GDP measures the value of all goods and services
A) in constant dollars. B) in current dollars.
C) in fixed dollars. D) without inflation.

14. Gross domestic product measured in terms of the prices of a fixed, or base, year is
A) current GDP. B) base GDP. C) real GDP. D) nominal GDP.

15. If real GDP in 2007 using 2006 prices is lower than nominal GDP of 2007, then
A) prices in 2007 are lower than prices in 2006.
B) nominal GDP in 2007 equals nominal GDP in 2006.
C) prices in 2007 are higher than prices in 2006.
D) real GDP in 2007 is larger than real GDP in 2006.

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