Economics (McConnell) AP Edition, 19th Edition

Chapter 24: Measuring Domestic Outputand National Income

Quiz

1
GDP excludes expenditures for:
A)additions to inventories
B)new housing
C)government purchases of military equipment
D)corporate stock
2
The "G" term in C + Ig + G + Xn includes all of the following except:
A)state government purchases of new computers
B)Social Security checks received by retirees
C)salaries received by members of the military
D)local government expenditures for building new roads
3
The income approach to GDP sums the total income earned by resource suppliers and:
A)adds net transfer payments and personal taxes
B)adds net investment and depreciation
C)subtracts net foreign factor income but adds depreciation and taxes on production and imports
D)net transfer payments, depreciation, and net foreign factor income
4
Refer to the following data, which shows output and prices for five years of an economy that produces just one product.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0217511447/883752/ch24_q4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>

If Year 3 is the base year, the price index for year 4 is:
A)80
B)120
C)20%
D)1.2
5
The change in real GDP is not an accurate measure of the change in economic welfare because, for example:
A)improvements in product quality are overstated
B)expenditures for personal services are excluded
C)the price level changes over time
D)some production creates pollution
6
"The market value of all final goods and services produced within a nation in a given year." This best describes:
A)Net domestic product
B)Gross domestic product
C)National income
D)Personal income
7
In calculating GDP:
A)both exports and imports are added
B)neither exports nor imports are added
C)exports are added and imports are subtracted
D)imports are added and exports are subtracted
8
Suppose that last year domestic firms spent $80 billion on final purchases of plant and equipment, of which $15 billion replaced equipment that had worn out during the year. In addition, firms collectively added $10 billion to inventories and new construction totaled $35 billion. In calculating GDP, national income accountants would add gross investment of:
A)$95 billion
B)$100 billion
C)$110 billion
D)$125 billion
9
Suppose nominal GDP in the base year was $380 billion. Five years later, nominal GDP was $480 and the GDP price index was 120. Over those five years, real GDP:
A)increased by $20 billion
B)increased by $96 billion
C)increased by $80 billion
D)did not change
10
Disposable income consists of:
A)personal income plus personal taxes
B)net domestic product minus personal taxes
C)GDP corrected for inflation
D)consumption plus saving
McConnell Economics Nineteenth Edition Large Cover Image
Glencoe Online Learning CenterSocial Studies HomeProduct InfoSite MapContact Us

The McGraw-Hill CompaniesGlencoe

Please read our Terms of Use and Privacy Notice before you explore our Web site. To report a technical problem with this Web site, please contact the Web Producer.