1. Which item would be included in the calculation of gross domestic product (GD
ID: 1211984 • Letter: 1
Question
1. Which item would be included in the calculation of gross domestic product (GDP)?
the construction of a new Honda factory in Ohio
a dashboard manufactured in China and used in the production of new Honda Civics in Ohio
the sale of a used 2008 Honda Civic manufactured in Ohio and sold in California
the steel manufactured in Pennsylvania that is used in the production of new Honda Civics in Ohio
2. Which item(s) would be considered a final good or service that would be included in gross domestic product (GDP)?
the milk that goes into the latte you purchase at the coffee shop
the tires on your new Ford Escape
the microprocessor in your new Dell laptop
the hamburger you eat at McDonald's
3. Economists are careful when using gross domestic product (GDP) numbers, especially when making comparisons over time, for which reason(s)?
Part of the increase in the value of GDP over time represents increases in the prices of goods and services rather than an increase in output.
The collection and compilation of information required in the calculation of GDP is not reliable and represents a best guess.
Most countries, especially developing countries, do not report GDP.
All answers are valid reasons why economists are cautious when using GDP numbers.
4. Given the table, what is the value of real GDP in year 1 if year 2 is considered the base year?
$72,000
$65,000
$46,000
$72,000
$65,000
$46,000
5. Consider an economy that only produces two goods: eTexts and eText readers. In 2010, 10 eTexts were sold for $20 each and 5 eText readers were sold for $100 each. In 2011, 15 eTexts are sold at a price of $10 each and 10 eText readers were sold at a price of $50 each. Nominal GDP in 2011 is:
$100.
$700.
$500.
6. Real gross domestic product (GDP) per capita:
is an excellent measure of a country's standard of living.
is always equal to nominal GDP per capita.
is not a sufficient measure of human welfare in a country.
is all that economists care about.
7. Real gross domestic product (GDP) is nominal GDP adjusted for:
double counting.
changes in prices.
changes in population.
8. We know with certainty that real gross domestic product (GDP) rises if:
nominal GDP rises.
the output of goods and services rises.
prices rise in the economy.
prices fall in the economy.
9. The calculation of the rate of growth of real gross domestic product (GDP):
depends on which year is used as the base year.
depends how quickly prices are rising.
is always equal to the rate of growth of nominal GDP.
is always more than the rate of growth of nominal GDP.
10. Given the table, what is the value of nominal GDP in year 1 if year 2 is considered the base year?
$72,000
$65,000
$46,000
11. In a study that looks at how rich a country is (as measured by gross domestic product [GDP] per capita) and how its citizens assess their well-being, the findings suggest all of the following EXCEPT:
Richer countries on average a have higher well-being than poor countries.
Money matters less as you become wealthier.
Even if countries achieve a high GDP, they are not all equally successful.
The gain in well-being accelerates as GDP per capita grows, so more satisfaction is realized from a gain in GDP per capita of $30,000 to $35,000 than a gain from $10,000 to $15,000.
12. If an economist wants to compare gross domestic product (GDP) across a number of countries but wants to eliminate the effect of differences in population, the correct GDP measurement to use would be:
real GDP.
nominal GDP.
GDP per capita.
inflation-adjusted GDP.
13. Chain-linking is best described as?
money that banks are required to keep in their vaults to guarantee deposits.
a method for calculating changes in real GDP using an early base year and a late base year.
a measure for the value of intermediate goods.
a method used to convert real to nominal GDP.
14. The best measure of a nation's standard of living is:
real GDP per capita.
nominal GDP.
aggregate GDP.
nominal GDP per capita.
Good Year 1 Year 2 price quantity price quantity steak $15 1000 $20 800 potato $1 5000 0.50 60,000Explanation / Answer
ans 1
the construction of a new Honda factory in Ohio
ans 2
the hamburger you eat at McDonald's
ans 3
Part of the increase in the value of GDP over time represents increases in the prices of goods and services rather than an increase in output.
ans 4
year 2 is base year, so in order to estmate value of GDP of year 1 , i will use price of year 2
GDP of year 1= 1000* $20 + 5000 * $0.50 = 20000 + 2500 = 22500
this is correct answer, may be some printing mistake
ans 5
Nominal GDP in 2011=15*10 + 10* 50 = 150+ 500 = 650
ans 6
is all that economists care about
ans 7
changes in prices
ans 8
the output of goods and services rises.
ans 9
depends on which year is used as the base year.
ans 10
nominal GDP is estimated at current price = 1000* $15 + 5000* $1 = 15000+ 5000= 20000
anwer is not matching option, because i think there is some printing mistake in table
ans 11
The gain in well-being accelerates as GDP per capita grows, so more satisfaction is realized from a gain in GDP per capita of $30,000 to $35,000 than a gain from $10,000 to $15,000.
ans 12
GDP per capita.
ans 13
a method for calculating changes in real GDP using an early base year and a late base year.
ans 14
real GDP per capita.
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