1 - Central Dauphin School District



GDP TEST 2007

1. GDP:

a. is the dollar value of all the final goods and services produced within the borders of a nation.

b. includes intermediate and final goods and services.

c. minus an allowance for depreciation of fixed capital equals GNP.

d. is a less-than-perfect measure of social well-being because it does not include exports and imports.

e. all of the above.

2. Intermediate goods are goods and services used:

a. by the ultimate user.

b. by state and local governments.

c. as inputs.

d. both as inputs and final goods.

3. Gross domestic product (GDP) does not include:

a. used goods sold in the current time period.

b. foreign produced goods.

c. intermediate goods.

d. None of the above would be included.

4. The market value of all final goods and services produced by companies owned by residents of an economy.

a. personal income.

b. national income.

c. capital income.

d. gross national product.

e. gross domestic product.

5. When net exports are negative,

a. exports are greater than investment.

b. depreciation is greater than net investment.

c. imports are greater than investment.

d. exports are greater than imports.

e. imports are greater than exports.

6. Which one of the following statements is true?

a. Money flows from households to firms for resources.

b. Money flows from households to foreign economies for exports.

c. Money flows from government to firms for resources.

d. Money flows from foreign economies to firms for imports.

e. Money flows from firms to households for resources.

7. Which one of the following statements is true?

a. Resources flow from the government to firms.

b. Taxes flow from foreign economies to the government.

c. Goods and services flow from households to foreign economies.

d. Resources flow from households to firms.

e. Resource payments flow from households to the government.

8. The expenditure approach to GDP accounting includes:

a. wages and salaries.

b. net exports.

c. net interest.

d. corporate profit.

e. proprietors’ income.

Exhibit 1 Expenditure approach

|National income account |(billions of dollars) |

|Personal consumption expenditures (C) |$500 |

|Net exports (X-M) | 50 |

|Federal government consumption and gross investment | |

|expenditures (G) |100 |

|State and local government consumption and | |

|gross investment expenditures (G) |200 |

|Imports | 15 |

|Gross private domestic investment (I) | 65 |

9. As shown in Exhibit 1, total expenditures by households for domestically produced goods is:

a. $500 billion.

b. $50 billion.

c. $300 billion.

d. $15 billion.

10. As shown in Exhibit 1, total expenditures by businesses for fixed investment and inventories is:

a. $500 billion.

b. $50 billion.

c. $200 billion.

d. $15 billion.

e. $65 billion.

11. Which of the following is true?

a. GDP measures nonmarket transactions.

b. GDP includes an estimate of illegal transactions.

c. GDP includes an estimate of the value of household services.

d. None of the above are true.

12. Because of transactions which take place in the underground economy, the:

a. GDP calculation tends to overstate the actual value of goods sold in the economy.

b. GDP calculation tends to accurately portray the value of goods sold in the economy.

c. GDP calculation tends to understate the actual value of goods sold in the economy.

d. value of the GDP calculation will be equal to the value of the national income calculation.

e. value of the GDP calculation through the expenditure approach will be greater then the value calculated through the income approach.

13. GDP underestimates our economic well-being:

a. for of all the following reasons.

b. because it includes the value of work done by nannies.

c. because it ignores leisure.

d. because it includes the value of work done by householders.

e. because it includes the value of work done by illegal immigrants.

14. Nominal gross domestic product is based on:

a. the existing prices at which final goods and services are actually sold.

b. prices of final goods and services adjusted for inflation.

c. prices at which intermediate goods are sold.

d. none of the above.

15. Real GDP means GDP:

a. valued at prices in a base year.

b. that does not change from year to year.

c. corrected for changes in quality.

d. valued at prices at which goods are actually sold.

16. Increased production, but not increased inflation, will result in higher:

a. nominal GDP.

b. money GDP.

c. real GDP.

d. current dollar GDP.

|Year |GDP Chain Price Index |Current GDP |

| | |(In Billions) |

|1997 |1.1183 |$7,996.5 |

|1998 |1.1317 |$8 |

|1999 |1.1464 |$8.7 |

|2000 |1.1693 |$8.95 |

17. What is the real GDP for 1997?

18. What is the real GDP for 1998?

19. What is the real GDP for 1999?

20. What is the real GDP for 2000?

21. Was there real growth between 1997-1998?

22. Was there real growth between 1998-1999?

23. Was there real growth between 1999-2000?

Find the size of the civilian labor force from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000.

a. 1,425

b. 1,450

c. 1,500

d. 1,525

e. 2,000

24. Stephen Moreno reported to the government interviewer that he worked 40 hours last week as a stocker at a Target department store. He is:

a. a member of the civilian labor force who is employed.

b. a member of the civilian labor force who is unemployed.

c. a member of the civilian labor force who is underemployed.

d. a discouraged worker who is not a member of the labor force.

e. not a member of the labor force.

25. Martin Malick lost his job when General Motors closed down its local plant. He has been visiting the personnel offices of the other factories in the area, looking for a new job. He is:

a. a member of the civilian labor force who is employed.

b. a member of the civilian labor force who is unemployed.

c. a member of the civilian labor force who is underemployed.

d. a discouraged worker who is not a member of the labor force.

e. not a member of the labor force.

26. Mallory Trammell is a homemaker. Last week, she was busy with her normal household chores. She is:

a. a member of the civilian labor force who is employed.

b. a member of the civilian labor force who is unemployed.

c. a member of the civilian labor force who is underemployed.

d. a discouraged worker who is not a member of the labor force.

e. not a member of the labor force.

Exhibit 2 Unemployment categories

|Category |# of Individuals |

|Frictional unemployment | 20 |

|Structural unemployment | 35 |

|Cyclical unemployment | 60 |

|Discouraged workers | 5 |

|Underemployed workers | 10 |

|Fully employed workers |410 |

|Population |900 |

27. The unemployment rate for the economy in Exhibit 2 is:

a. 28 percent.

b. 30.5 percent.

c. 31.7 percent.

d. 12.8 percent.

e. 21.5 percent.

28. Find the BLS's rate of unemployment from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000.

a. 17.5 percent

b. 23.3 percent

c. 24.6 percent

d. 28.8 percent

e. 38.3 percent

29. Consider an economy made up of 100 people, 50 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The unemployment rate is approximately:

a. 10 percent.

b. 12 percent.

c. 17 percent.

d. 20 percent.

e. 25 percent.

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