Question 1

Refer to the information provided in Table 21.7 below to answer the question(s)  that follow.
Table 21.7 
-Refer to Table 21.7. The value for national income in billions of dollars is

Accepted Answer

A)   710.
B)   750.
C)   800.
D)   825.E) A) and B)
F) A) and C)

Question 2

The percentage of disposable personal income that is saved is the

Accepted Answer

A)   MPS.
B)   personal investment rate.
C)   MPC.
D)   personal saving rate.E) A) and B)
F) C) and D)

Question 3

If in the same period output doubles and the price level doubles, nominal GDP doubles.

Accepted Answer

A) True 
 B)False

Question 4

If net investment in 2016 is $550 billion and gross investment in 2016 is $900 billion, depreciation in 2016 is

Accepted Answer

A)   $900 billion.
B)   $550 billion.
C)   $450 billion.
D)   $350 billion.E) None of the above
F) C) and D)

Question 5

Related to the Economics in Practice on p. 427: If a Harley Davidson dealer in Chicago sells a newly manufactured Harley motorcycle on eBay to a customer in Tokyo, Japan, the value of the motorcycle is

Accepted Answer

A)   counted in U.S. GDP.
B)   counted in Japanese GDP.
C)   counted in U.S. GDP and Japanese GNP.
D)   not counted in U.S. GDP because it was sold to a foreign customer.E) B) and C)
F) All of the above

Question 6

If net investment in 2017 is $500 billion and gross investment in 2017 is $900 billion, depreciation in 2017 is

Accepted Answer

A)   -$500 billion.
B)   $0.
C)   $400 billion.
D)   $1,400 billion.E) A) and B)
F) B) and C)

Question 7

In 2016 final sales equal $350 billion and the change in business inventories is -$60 billion. GDP in 2016

Accepted Answer

A)   is $290 billion.
B)   is $295 billion.
C)   is $410 billion.
D)   cannot be determined from this information.E) B) and D)
F) A) and C)

Question 8

If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be

Accepted Answer

A)   $400.
B)   $600.
C)   $1,000.
D)   $1,600.E) None of the above
F) A) and C)

Question 9

If the GDP deflator next year is greater than the GDP deflator this year, then the price level has fallen.

Accepted Answer

A) True 
 B)False

Question 10

Depreciation is

Accepted Answer

A)   the difference between exports and imports.
B)   subtracted from net investment to obtain gross investment.
C)   added to NNP to get GNP.
D)   added to GDP to get gross investment.E) None of the above
F) A) and D)

Question 11

The GDP deflator in year 3 is 135 using year 1 as a base year. This means that, on average, the price of goods and services is

Accepted Answer

A)   135% higher in year 3 than in year 1.
B)   17.5% higher in year 3 than in year 1.
C)   35% higher in year 3 than in year 1.
D)   17.5% higher in year 1 than in year 3.E) A) and C)
F) A) and B)

Question 12

Suppose that net investment in 2016 was $20 billion and depreciation was $4 billion. Gross investment in 2016 was

Accepted Answer

A)   $16 billion.
B)   $20 billion.
C)   $24 billion.
D)   $28 billion.E) None of the above
F) B) and D)

Question 13

National income minus the amount of national income not going to households is

Accepted Answer

A)   proprietor's income.
B)   interest income.
C)   personal income.
D)   disposable income.E) B) and C)
F) B) and D)

Question 14

If real GDP falls, then so must nominal GDP.

Accepted Answer

A) True 
 B)False

Question 15

When calculating GDP, exports are ________ and imports are ________.

Accepted Answer

A)   added; added
B)   added; subtracted
C)   subtracted; added
D)   subtracted; subtractedE) A) and D)
F) None of the above

Question 16

In order to depreciate an asset, it must wear out.

Accepted Answer

A) True 
 B)False

Question 17

If investment is larger than depreciation, the capital stock decreases.

Accepted Answer

A) True 
 B)False

Question 18

GDP calculations include goods, but not services.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is added to personal income to get national income?

Accepted Answer

A)   retained earnings
B)   personal interest income
C)   depreciation
D)   personal taxesE) A) and D)
F) A) and B)

Question 20

Refer to the information provided in Table 21.4 below to answer the question(s)  that follow.
Table 21.4 
-Refer to Table 21.4. The value for GDP in billions of dollars is

Accepted Answer

A)   910.
B)   920.
C)   950.
D)   1,050.E) C) and D)
F) None of the above

Exam 21: Measuring National Output and National Income

Depreciation is

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If in the same period output doubles and the price level doubles, nominal GDP doubles.

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Suppose that net investment in 2016 was $20 billion and depreciation was $4 billion. Gross investment in 2016 was

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If net investment in 2016 is $550 billion and gross investment in 2016 is $900 billion, depreciation in 2016 is

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Refer to the information provided in Table 21.4 below to answer the question(s) that follow. Table 21.4 -Refer to Table 21.4. The value for GDP in billions of dollars is

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GDP calculations include goods, but not services.

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If real GDP falls, then so must nominal GDP.

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If the GDP deflator next year is greater than the GDP deflator this year, then the price level has fallen.

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Related to the Economics in Practice on p. 427: If a Harley Davidson dealer in Chicago sells a newly manufactured Harley motorcycle on eBay to a customer in Tokyo, Japan, the value of the motorcycle is

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If investment is larger than depreciation, the capital stock decreases.

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In 2016 final sales equal $350 billion and the change in business inventories is -$60 billion. GDP in 2016

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The GDP deflator in year 3 is 135 using year 1 as a base year. This means that, on average, the price of goods and services is

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In order to depreciate an asset, it must wear out.

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Which of the following is added to personal income to get national income?

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National income minus the amount of national income not going to households is

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If net investment in 2017 is $500 billion and gross investment in 2017 is $900 billion, depreciation in 2017 is

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The percentage of disposable personal income that is saved is the

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When calculating GDP, exports are ________ and imports are ________.

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Refer to the information provided in Table 21.7 below to answer the question(s) that follow. Table 21.7 -Refer to Table 21.7. The value for national income in billions of dollars is

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If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be

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When calculating GDP, exports are and imports are .

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