ECO 302 Week 3 Quiz - Strayer
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Chapter 2 and 3
Chapter 2
TRUE/FALSE
1. Nominal
GDP measures the dollar value of all goods and services that an economy
produces in a particular period of time.
2. GDP
is a complete measure of economic welfare.
3. GDP
ignores welfare changes due to environmental damage.
4. Value
added is the difference between costs of production and the price of a product.
5. The
difference between GDP and NNP is the depreciation of capital.
6. Nominal
GDP measures the total value of goods and services, adjusted for inflation.
7. GDP
in constant dollars uses prices from a base year, so that prices do not vary
over time.
8. Business
inventories are included in the GDP component of private domenstic investment.
9. A
flow variable measures the dollar amount of goods at a specific point in time.
10. Conceptually,
GDP measured by income, product, and value added each equal the same amount.
MULTIPLE CHOICE
1. Nominal
GDP measures the:
a. dollar value of all goods and services
produced in an economy at a point in time. c. dollar value of all goods and services
produced in an economy during a specified time period.
b. the constant dollar value of all goods
and services produced in an economy at a point in time. d. the constant
dollar value of all goods and services produced in an economy during a
specified time period.
2. Imputed
rental income is:
a. the money people receive from renting
property. c. what an owner occupied house would fetch on the market if
the owner rented it.
b. the money businesses pay for renting
property. d. the money businesses receive from
renting property.
3. In
an economy with two goods, beer and pizza, if pizza costs $10 per pie and beer
costs $5 per six pack and if 100 six packs of beer and 200 pizzas are produced
in a year, then nominal GDP that year would be:
a. $2,000. c. $1,500.
b. $2,500. d. none of the above.
4. In
an economy with two goods, burgers and pizza, if pizza costs $15 per pie and
burgers costs $5 per burger and if 1000 burger and 200 pizzas are produced in a
year, then nominal GDP that year would be:
a. $24,000. c. $16,000.
b. $8,000. d. none of the above.
5. Real
GDP is GDP:
a. in constant dollars. c. that
considers income distribution.
b. in current dollars. d. that
includes the value of leisure.
6. Real
GDP equals:
a. nominal GDP times the implicit price
level. c. the current dollar value of all goods and services produced
in an economy during a particular time period.
b. nominal GDP divided by the implicit
price level. d. real GDP time the implicit price level.
7. The
implicit price level is:
a. the ratio of nominal to real GDP. c. the
ratio of real to nominal GDP
b. the product of real and nominal GDP. d. the
difference between real and nominal GDP.
8. If
real GDP is 120 and nominal GDP is 180, then the implicit price level is:
a. .56. c. 60.
b. 1.5. d. 21600.
9. If
real GDP is 200 and nominal GDP is 160, then the implicit price level is:
a. 0.8 c. 40.
b. 1.25 d. 32000.
10. GDP
does not:
a. consider changes in the distribution of
income. c. assign value to leisure time.
b. include most nonmarket goods. d. all
of the above.
11. Personal
consumption expenditure includes:
a. services. c. imports.
b. residential structures. d. all
of the above.
12. Gross
private domestic expenditure includes:
a. fixed investment. c. residential
structures.
b. change in business inventory. d. all
of the above.
13. Net
exports of goods and services equals:
a. imports times exports. c. imports
minus exports.
b. exports minus imports. d. all
of the above.
14. Personal
Consumption expenditure includes:
a. changes in business inventories. c. imports.
b. nondurables. d. all of the above.
15. Gross
private domestic investment includes
a. durable goods. c. financial
assets.
b. residential structures. d. all
of the above.
16. Government
purchases include:
a. state and local government purchases. c. federal
government debt.
b. tax receipts. d. all of the
above.
Table
2.1
Category
of Expenditure Trillions
of $
Personal
Consumption Expenditure 7.5
Gross
Private Domestic Investment 2.2
Government
Purchases 2.5
Net
Exports of Goods and Services -1.0
Depreciation
of capital 0.5
17. Based
on the data in Table 2.1, Gross Domestic Product is:
a. $11.7 trillion. c. $11.2 trillion.
b. $10.7 trillion. d. none of the above.
18. Based
on the data in Table 2.1, net domestic private investment is:
a. $1.7 trillion. c. $11.0 trillion.
b. $2.7 trillion. d. none of the
above.
19. Depreciation
is:
a. when the price level falls. c. the
capital used up producing this period’s output.
b. the economy goes into recession. d. all
of the above.
Table 2.2
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