ECO 3

QN=51 (17770) Refer to Table 23-5. In 2007, Batterland's nominal GDP was

• a. $300.

• .b. $390

• c. $400.

• d. $540.

QN=52 (17765) The consumption component of GDP includes spending on

• a. durable goods and nondurable goods, but not spending on services

• b. durable goods and services, but not spending on nondurable goods.

• c. nondurable goods and services, but not spending on durable goods.

• d. durable goods, nondurable goods, and services.

QN=53 (17768) Suppose an economy's production consists only of corn and soybeans. In 2005, 20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel. In 2004, the price of corn was $2 per bushel and the price of soybeans was $1 per bushel. Using 2004 as the base year, it follows that, for 2005,

• a. nominal GDP is $50, real GDP is $100, and the GDP deflator index is 50

• b. nominal GDP is $50, real GDP is $100, and the GDP deflator index is 200

• c. nominal GDP is $100, real GDP is $50, and the GDP deflator index is 50.

• d. nominal GDP is $100, real GDP is $50, and the GDP deflator index is 200.

QN=54 (17788) Which of the following statements is correct?

• a. The value of intermediate goods is always included in GDP

• b. The value of intermediate goods is included in GDP only if those goods were produced in the previous year.

• c. The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date.

• d. The value of intermediate goods is never included in GDP.

QN=55 (17775) A good is produced by a firm in 2010, added to the firm's inventory in 2010, and sold to a household in 2011. It follows that

• a. the value of the good is added to the investment category of 2010 GDP and added to the investment category of 2011 GDP

• b. the value of the good is added to the investment category of 2010 GDP and subtracted from the investment category of 2011 GDP.

• c. the value of the good is subtracted from the investment category of 2010 GDP and added to the investment category of 2011 GDP

• d. the value of the good is subtracted from the investment category of 2010 GDP and subtracted from the investment category of 2011 GDP.

QN=56 (17782) GDP is defined as

• a. the market value of all goods and services produced within a country in a given period of time

• b. the market value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

• c. the market value of all final goods and services produced within a country in a given period of time.

• d. the market value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

QN=57 (17784) In the economy of Wrexington in 2008, consumption was 60% of GDP, government purchases were $212, imports were $67 and 67% of the value of exports, investment was one-half of the value of consumption. What was Wrexington's GDP in 2008?

• a. $1450

• b. $1790

• c. $2450

• d. $2790

QN=58 (17790) Net exports equal

• a. exports plus imports

• b. exports minus imports.

• c. imports minus exports.

• d. GDP minus imports.

QN=59 (17791) A German citizen buys an automobile produced in the United States by a Japanese company. As a result,

• a. U.S. net exports increase, U.S. GDP is unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected.

• b. U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GNP is unaffected, and German GDP decreases.

• c. U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected

• d. U.S. net exports and GDP are unaffected, Japanese GNP increases, and German net exports, GNP, and GDP decrease.

QN=60 (17769) Refer to Table 23-5. In 2008, Batterland's real GDP was

• a. $100

• b. $390

• c. $400.

• d. $540.