Reference no: EM133128382
1. Gross Domestic Product (GDP) is:
A) the sum of all currency and coins in circulation.
B) the value of all final goods and services produced in a country in a year.
C) the value of all final goods and services produced anywhere in the world by a nation's firms.
D) the value of all final goods and services produced by a government.
2. Which of the following would not be included in GDP?
A) the sale of a used sofa at a thrift store
B) revenue from sales of insulin
C) the value of lawn care by a hired company
D) a household's purchase of flour
3. If import spending exceeds export spending, as in recent years for the United States, then
__________ exists.
A) a trade surplus
B) a trade deficit
C) trade balance
D) trade disequilibrium
Use the following to answer question 4:
Table: Measuring GDP (billions of dollars)
Personal consumption expenditures (domestic and foreign) $500
Gross private domestic investment 200
Exports 20
State and local government purchases of goods and services 200
Federal government purchases of goods and services 100
Imports 30
Federal government transfer payments 5
4. (Table: Measuring GDP) GDP is:
A) $995 billion.
B) $990 billion.
C) $1,000 billion.
D) $1,010 billion.
Use the following to answer questions 5-6:
Production Data
|
|
Price per Unit
|
|
Output
|
|
|
Production
|
2011
|
2020
|
2011
|
2020
|
|
vegetables
|
$2
|
4
|
250
|
300
|
|
Meat
|
$8
|
12
|
500
|
550
|
5. Refer to the table above. What is nominal GDP for 2011?
A) $4,500
B) $5,000
C) $10
D) $7,800
6. Refer to the table above. What is real GDP for 2011, using 2020 as the base year?
A) $7,000
B) $5,000
C) $10
D) $7,800
7. Which of the following is included in a nation's current account?
A) Purchases of foreign assets
B) Foreign purchases of U.S. financial assets
C) Investment income receipts
D) Purchases of foreign real property
8. A bank holds cash reserves of $20. It has purchased government bonds worth $50. It has made loans which, if sold at market value, would have a value of $300. The banks customers have deposits of $570 at the bank. What do the bank's total liabilities equal?
A) $500
B) $940
C) $370
D) $570
9. For the U.S. the largest spending category in GDP is government spending.
A) True
B) False
10. Because it involves the use of money, the sale of heroin for cash is included as part of gross
domestic product.
A) True
B) False
11. A country's national income is the total wages earned by residents of the country.
A) True
B) False
12. Net investment equals gross investment plus depreciation.
A) True
B) False