macroeconomics 10

In the economy of Ukzten in 2010, consumption was 60% of GDP, government purchases were $212, imports were $67 and 67% of the value of exports, investment was one-half of the value of consumption.  What was Ukzten’s GDP in 2010?

 

a.

$2790

 

b.

$1790

 

c.

$2450

 

d.

$1450

 

Ralph pays someone to mow his lawn, while Mike mows his own lawn.  Regarding these two practices, which of the following statements is correct?

 

 

a

Only Ralph’s payments are included in GDP.

 

b

Ralph’s payments as well as the estimated value of Mike’s mowing services are included in GDP.

 

c

Neither Ralph’s payments nor the estimated value of Mike’s mowing services is included in GDP.

 

d      

Ralph’s payments are included in GDP, while the estimated value of Mike’s mowing services is included in GDP only if Mike voluntarily provides his estimate of that value to the government

 

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

 

     a.both real GDP and nominal GDP

     b.real GDP but not nominal GDP

     c.nominal GDP but not real GDP

     d.neither nominal GDP nor real GDP

 

Sally purchases a classic 1964 car she saw for sale on someone’s lawn.  She then purchases some new parts and spends 120 hours refurbishing the car which she keeps.   Which of the following is included in GDP?

 

 

a.

the amount she paid to buy the car

 

b.

the amount she paid to buy new parts

 

c.

the value of her time repairing the car

 

d.

All of the above are included

 

In the actual economy, households

Answer

 

a.

spend all of their income.

 

b.

divide their income among spending, taxes, and saving.

 

c.

buy all goods and services produced in the economy.

 

d.

Both (a) and (c) are correct.

 

In a simple circular-flow diagram, total income and total expenditure are

Answer

 

a.

always equal because every transaction has a buyer and a seller.

 

b

equal only when the government purchases no goods or services.

 

c.

seldom equal because of the ongoing changes in an economy’s unemployment rate.

 

d.

never equal because total income always exceeds total expenditure.

 

The information below for 2008 in millions was reported by the World Bank.  On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

 

Country

GDP (Constant US$)

GDP(Current US$)

Population

Argentina

$394,595

$328,465

39.88

Bolivia

$11,373

$16,674

9.69

Peru

$84,241

$129,109

28.84

 

 

 

 

Answer

 

a.

Bolivia, Argentina, Peru

 

b.

Argentina, Peru, Bolivia

 

c.

Peru, Bolivia, Argentina

 

d.

Argentina, Bolivia, Peru

 

International studies of the relationship between GDP per person and quality of life measures such as life expectancy and literacy rates show that larger GDP per person is associated with

Answer

 

a.

very nearly the same life expectancy and a lower percentage of the population that is literate.

 

b.

longer life expectancy and a lower percentage of the population that is literate.

 

c.

very nearly the same life expectancy and a higher percentage of the population that is literate.

 

d.

longer life expectancy and a higher percentage of the population that is literate.

 

Spots, Inc. produces ink and sells it to Write on Target, which makes pens.  The ink produced by Spots, Inc. is called

Answer

 

a.

a transitory good.

 

b.

an inventory good.

 

c.

an intermediate good.

 

d.

a final good.

 

The government of a country, which has adopted American GDP accounting conventions, reported that seasonally adjusted GDP in quarter 3 was $12 billion at an annual rate.  This means that the seasonally-adjusted market value of all final goods and services produced within this country in quarter 3 was

Answer

 

a.

$12 billion.

 

b.

$48 billion.

 

c.

$3 billion.

 

d.

$4 billion.

 

Table 23-6The table below contains data for the country of Batterland, which produces only waffles and pancakes.  The base year is 2009.

Prices and Quantities

 

Year

Price of Waffles

Quantity of Waffles

Price of Pancakes

Quantity of Pancakes

2008

$2.00

100

$1.00

100

2009

$2.00

120

$2.00

150

2010

$2.00

150

$3.00

200

2011

$4.00

180

$3.00

220

 

 

 

 

 

Refer to Table 23-6.  In 2008, this country’s GDP deflator was

Answer

 

a.

75.

 

b.

100.

 

c.

133.3.

 

d.

This cannot be calculated from the information given.

 

Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?

Answer

 

a.

Why do wages differ across industries?

 

b.

Why do prices in general rise by more in some countries than in others?

 

c.

How rapidly is GDP currently increasing?

 

d.

Why do national production and income increase in some periods and not in others?

 

Ryan lives in an apartment where he pays $7,000 a year in rent.   Alexis lives in a house that could be rented for  $14,000 a year.  How much do these housing services contribute to GDP?

Answer

 

a.

$21,000

 

b.

$14,000

 

c.

$7,000

 

d.

$0

 

In the economy of Ukzten in 2010, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $2000, and investment was $1000.  What were Ukzten’s exports in 2010?

Answer

 

a.

$2500

 

b.

$1500

 

c.

-$1500

 

d.

$500

 

Which of the following is included in the consumption component of U.S. GDP?

Answer

 

a.

purchases of staplers, paper clips, and pens by U.S. business firms

 

b.

purchases of natural gas by U.S. households

 

c.

purchases of newly constructed homes by U.S. households

 

d.

All of the above are correct.

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