Transcript C licke r Q uestions

21
MEASURING GDP
AND ECONOMIC
GROWTH
Clicker Questions
Q1: In 2014, Jim purchased a 2007 Ford Fiesta from his
neighbor for his son, a 1999 “one owner” Toyota Camry
for his wife, a 2011 new GM Chevy for himself, and sold
his 1993 Dodge Caravan to his nephew. Which, if any,
of these transactions will be included in GDP in 2014?
A all four transactions
B all three purchases but not the sale
C the purchase of the Ford and the Caravan
D only the purchase of the GM Chevy
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Q2: Gross domestic product is the market value of all the
_______ in a given time period.
A goods and services bought by Americans
B goods and services produced by American
companies in all countries
C final foods and services produced by all firms located
in the United States
D Goods and services produced in the United States
and bought in the United States
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Q3: Comparing aggregate expenditure and aggregate
income shows that _________.
A aggregate expenditure is usually greater than
aggregate income
B aggregate income is usually greater than aggregate
expenditure
C they are equal
D aggregate income cannot equal aggregate
expenditure if households have any saving
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Q4: Let C represent consumption expenditure, S saving, I
investment, G government expenditure on goods and
services, and NX net exports of goods and services.
Then GDP equals _________.
A
S + I + G + NX
B
C + S + G – NX
C
C + I + G + NX
D
C + I + G – NX
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Q5: Which of the following items are examples of the
investment component of GDP?
I. IBM’s purchase of new production machinery
II. Intel’s additions to its inventory of computer chips
III. Google’s sales of new shares of Google stock
A I only
B II and III
C I and II but not III
D I and III
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Q6: The expenditure approach to measuring U.S. GDP
_______.
A the sum of U.S. consumption expenditure and U.S.
investment
B all expenditure on final goods and services produced in
the United States in a given time period
C U.S. government expenditure minus taxes paid by
Americans
D all expenditure by Americans on goods and services
produced in the United States in a given time period
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Q7: When using the income approach to measure GDP
at market prices, after summing all factor incomes we
__________.
A subtract depreciation because profit is reported as net
profit
B add depreciation because capital depreciates when
goods and services are manufactured
C add indirect taxes less subsidies to convert aggregate
income from factor cost to market price
D add depreciation and indirect taxes less subsidies
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Q8: The following statements about the business cycle
are correct except ______.
A it is a regular predictable cycle in real GDP around
potential GDP
B from the peak to the trough, the economy is in
recession
C from the trough to the peak, the economy is in an
expansion
D it is a periodic movement in economic activity
including employment
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Q9: Real GDP is limited as a measure of the standard
of living because it omits ____.
A household production and includes goods bought by the
government
B business investment and the quality of the environment
C people’s leisure time and the goods and services
imported from other countries
D household production, people’s leisure time, and the
quality of the environment
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Q10: The standard of living will increase if _________.
A the population grows at a faster pace than real GDP
B investment grows at the same rate as the population
C our leisure time increases
D real GDP grows at a faster pace than the population
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