Chapter 9 - Gross Domestic Product

1		Consumption accounts for over _______ of our GDP.
			A)	one-third
			B)	one-half
			C)	two-thirds
			D)	three-quarters
			E)	nine-tenths
2		Which is the most accurate statement?
			A)	No one number can measure our national economic well being.
			B)	GDP is not a very useful concept.
			C)	Except for economics textbooks, it is virtually impossible find any mention of GDP.
			D)	GDP is a very accurate measure of national economic well being.
3		Between 1995 and 2000
			A)	real GDP grew more quickly than GDP.
			B)	GDP grew more quickly than real GDP.
			C)	GDP and real GDP grew at the same rate.
4		The smallest sector of GDP is
			A)	I.
			B)	G.
			C)	C.
			D)	Xn.
5		Compared to 1970 our GDP is about ______ times as large.
			A)	two
			B)	four
			C)	six
			D)	eight
			E)	ten
6		Compared to 1970 our real GDP is about ______ times as large.
			A)	one and a half
			B)	two and a half
			C)	three and a half
			D)	four and a half
7		If you wanted to compare the standard of living of Americans with Canadians, the best measure would be
			A)	GDP.
			B)	real GDP.
			C)	per capita GDP.
			D)	per capita real GDP.
8		Which statement is true?
			A)	GDP takes into account both transfer payments and leisure time.
			B)	GDP takes into account transfer payments, but not leisure time.
			C)	GDP takes into account leisure time, but not transfer payments.
			D)	GDP takes into account neither transfer payments nor leisure time.
9		If GDP rose from $10 trillion to $11 trillion and there was deflation, Real GDP
			A)	rose by more than 10 percent.
			B)	rose by 10 percent.
			C)	rose by less than 10 percent.
			D)	stayed the same.
			E)	fell.
10		If there is a 3 percent rate of inflation and GDP rose by 5 percent, then real GDP
			A)	fell by 5 percent.
			B)	fell by 2 percent.
			C)	stayed the same.
			D)	rose by 2 percent.
			E)	rose by 5 percent.
11		Our real Per Capita GDP in 2000 was about ______ times greater than in 1029.
			A)	two
			B)	three
			C)	four
			D)	five
			E)	six
12		Which is the most accurate statement?
			A)	The American per capita GDP is the highest in the world.
			B)	The American per capita GDP is among the highest in the world.
			C)	The American per capita GDP ranks among the top 30 in the world.
			D)	The American per capita GDP ranks among the top 50 in the world.
13		Statement I: The underground economy adds billions of dollars in goods and services to our national output. Statement II: Illegal immigrants are heavily employed in the underground economy.
			A)	Statement I is true and statement II is false.
			B)	Statement II is true and statement I is false.
			C)	Both statements are true.
			D)	Both statements are false.
14		Which is the most accurate statement?
			A)	GDP takes into account human costs and benefits.
			B)	GDP takes into account the costs of pollution and crime.
			C)	GDP takes into account our entire national output.
			D)	GDP takes into account household production.
			E)	GDP is an imperfect measure of national output.
15		Which of the following is not a component of national income?
			A)	wages and salaries
			B)	rental income
			C)	interest
			D)	consumption expenditures