Survey Of Economics International Edition 7th Edition By Irvin B. Tucker – Test Bank

Overview

Chapter 11
Gross domestic product

Multiple Choice

1. Gross domestic product is equal to the market value of all final goods and services:
a. exchanged during a period.
b. produced domestically during a period.
c. produced by the citizens of a nation during a period.
d. produced domestically during a period minus the depreciation of productive assets.

Topic: Gross domestic product,
Difficulty: M,
Type: SA,
Answer: b

2. Gross domestic product is the sum of the purchase price multiplied by the quantity of:
a. goods and services exchanged during the period.
b. final goods and services produced domestically during the period.
c. goods and services produced domestically during the period minus the depreciation of productive assets.
d. final goods and services plus intermediate goods produced domestically during the period.

Topic: Gross domestic product,
Difficulty: E,
Type: SA,
Answer: b

3. Which of the following is true?
a. GDP is a “flow” concept.
b. The purchase prices of both intermediate goods and final goods are included in GDP.
c. GDP measures economic welfare.
d. GDP is a measure of changes in the general level of prices.

Topic: Gross domestic product,
Difficulty: E,
Type: SA,
Answer: a

4. Which one of the following transactions would be included in GDP?
a. Ms. Kim pays $50 for a used picture frame at a neighborhood garage sale.
b. Mr. Doe donates $500 to his town’s junior college scholarship fund.
c. Ms. Bartolini pays $500 to fix the front end of her car damaged in a recent accident.
d. Ms. Smith pays $5,000 to purchase 100 shares of Microsoft stock.

Topic: Gross domestic product,
Difficulty: E,
Type: SA,
Answer: c

5. GDP is a measure of:
a. domestic production.
b. changes in the general level of prices.
c. material well-being.
d. social welfare.

Topic: Gross domestic product,
Difficulty: E,
Type: RE,
Answer: a

6. The GDP of a country can be derived by summing the:
a. expenditures on final goods and services produced domestically during the year.
b. payments to employees and owners of capital resources and then subtracting depreciation and indirect business taxes.
c. market value of all goods and services produced domestically during the period and then subtracting net exports from that figure.
d. income payments to the resource suppliers and net exports.

Topic: Gross domestic product,
Difficulty: M,
Type: RE,
Answer: a

7. Gross domestic product is officially measured by adding together the:
a. quantity of each good and service produced by U.S. residents.
b. market value of all final goods and services produced within the borders of a nation.
c. quantity of goods and services produced by companies owned by U.S. citizens.
d. none of the above.

Topic: Gross domestic product,
Difficulty: E,
Type: RE,
Answer: b

8.Which of the following would be counted as a final good for inclusion in GDP?
a. A piece of glass bought this year by a consumer to fix a broken window.
b. A sheet of glass produced this year by Ford for windows in a new car.
c. A tire produced this year and sold to a car maker for a new car sold this year.
d. None of the above would be counted in GDP.

Topic: Gross domestic product,
Difficulty: M,
Type: RE,
Answer: a

9. Which of the following items is included in the calculation of GDP?
a. Purchase of 100 shares of General Motors stock.
b. Purchase of a used car.
c. The value of a homemaker’s services.
d. Sale of Gulf War military surplus.
e. None of the above would be included.

Topic: Gross domestic product,
Difficulty: D,
Type: RE,
Answer: e

10. Which of the following expenditures would not be included in GDP?
a. Purchase of a new lawnmower.
b. Purchase of a silver cup previously sold new in 1950.
c. Purchase of a ticket to the latest movie.
d. All of the above would be counted in GDP.

Topic: Gross domestic product,
Difficulty: M,
Type: RE,
Answer: b