Macroeconomics-Week1_ver2_AI66B

For an economy as a whole,

• wages must equal profit.

• consumption must equal saving.

• income must equal expenditure.

• the number of buyers must equal the number of sellers.

Sandy bakes a cake and sells it to Norm for $10. Sam pays Diane $30 to tutor him. In the economy, GDP is

• $10

• $20

• $30

• $40

To compute GDP, we

• add up the wages paid to all workers.

• add up the costs of producing all final goods and services.

• add up the market values of all final goods and services.

• take the difference between the market values of all final goods and services and the costs of producing those final goods and services

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

• the quality of these items is not high enough to contribute value to GDP

• measuring them is so difficult

• the government wants to discourage the production and consumption of these items.

• these items are not reported on income tax forms

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move

• necessarily raises GDP

• necessarily decreases GDP

• doesn't change GDP because gambling is never included in GDP.

• doesn't change GDP because in either case his income is included.

Marijuana is an illegal good and broccoli is a legal good. Which of the following statements is true?

• Darin grows and sells marijuana to Lisa. When Darin and Lisa get married, GDP falls.

• Darin grows and sells marijuana to Lisa. When Darin and Lisa get married, GDP rises.

• Darin grows and sells broccoli to Lisa. When Darin and Lisa get married, GDP falls.

• Darin grows and sells broccoli to Lisa. When Darin and Lisa get married, GDP rises.

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

• $150 to GDP

• $250 to GDP.

• between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle

• $400 to GDP.

Consider two cars manufactured by Chevrolet in 2024. During 2024, Chevrolet sells one of the two cars to Sean for $24,000. Later in the same year, Sean sells the car to Kati for $19,000. The second car, with a market value of $30,000, is unsold at the end of 2024 and it remains in Chevrolet’s inventory. The transactions just described contribute how much to GDP for 2024?

• $24,000

• $43,000

• $54,000

• $73,000

Sonny, a the US citizen, works only in Vietnam as an English teacher. He earn $10,000 for the services he provides. In the same year, he transfers $4,000 to his wife in the US. How does this transaction affect the GDP of Vietnam and the US

• Vietnam's GDP increases by $10,000; U.S. GDP is unaffected

• Vietnam's GDP increases by $6,000; U.S. GDP increases by $4,000

• Vietnam's GDP increases by $10,000; U.S. GDP increases by $4,000

• Vietnam's GDP increases by $6,000; U.S. GDP is unaffected

A car dealer bought a brand-new car from domestic manufacturer for $18,000 dolars. Later that year, the dealer sold the car to Espreso for $20,000. Shortly afterward, Espreso resells the car to Capuchino for $17,000. By how did these transactions contribute to the country GDP for the year?

• $18,000

• $20,000

• $38,000

• 55,000