1. a basic function of the national income accounting system is to a) identify e
ID: 1185467 • Letter: 1
Question
1. a basic function of the national income accounting system is to
a) identify economic problems
b) evaluate economic policy
c) provide a framework for policy
d) all of the above
e) none of the above
2. suppose that the total dollar value of all final goods and services produced in the nation of GDPLand was $13.2 trillion in 2006 (measured in 2006 prices) and $12.5 trillion in 2005 (measured in 2005 prices). Based only upon these facts, which statements are definitely correct?
a) production increased in GDPL and between 2005 and 2006
b) average price levels increased in GDPLand between 2005 and 2006.
c) Nominal GDP increased in GDPLand between 2005 and 2006.
d) all of these statements are correct.
e) none of these statements is correct
3. GDP may be found by
a) adding together spending for goods and services and incomes received by the factors of production.
b) subtracting incomes received by the factors of production from the dollars spend on goods and services.
c) subtracting the money spent on goods and services from the incomes received by the factors of production.
d) adding the dollars spent on final goods and services for domestic production in the current at year market prices.
4. Suppose that a friend claims that he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP. Your friend is
a) wrong. GDP will not be affected because nothing new is being produced.
b) right. GDP will increase because the dollars spent to clean up the trash will increase government spending, ceteris peribus.
c) wrong. GDP will not be affected because this is not a socially desirable use of resources and will therefore not be included in GDP.
d) wrong. GDP will decline because cleaning the streets will take resources away from more productive work.
e) none of the above is correct answer.
5. If real U.S. GDP were $13.253 trillion in 2006, and the U.S. population was 300 million, the per capita GDP would be closest to:
a) $30,000 per person
b) $35,00 per person
c) $40,000 per person
d) $45,000 per person
e) $50,000 per person
6. The underground economy exists because
a) people wish to avoid taxes.
b) of illegal activities that are often highly profitable.
c) it is difficult to trace transactions in the underground economy
d) all of the above are reasons
e) none of the above are reasons
7. a manufacturer sells assembled Palm Pilots for $250.00 each. If the manufacturer pays $100 for components in each palm pilot, the value added to each unit of product by the manufacturer is
a) $100, since that was the cost of the components
b) $150, since that was the difference between the selling price and the cost of components
c) $250, since that was the selling price of each Palm Pilot and what was added to GDP
d) $350, since the sum total of all the transactions equaled this amount.
8. Which of the following is not a "final" good or service?
a) a printing press purchased by a publishing company
b) automobile tires purchased by an auto manufacturing company.
c) gasoline purchased for personal use by a car owner
d) the preparation of your tax return by a CPA
e) none of the above represents a final good or service
9. Real GDP measures changes is
a) prices
b) production
c) prices and production
d) wages
e) all of the above
10.when there is inflation
a) real GDP increases faster that GDP
b) GDP increases faster that real GDP
c) GDP and real GDP increase at the same rate
Explanation / Answer
1) d
2)c)
3)b
4)c
5)b
6)d
7)b
8)a
9)c
10)b
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