Question 1

Assuming that Australia is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

Accepted Answer

A)   exports; foreign countries; Australia
B)   exports; Australia; Australia
C)   imports; foreign countries; foreign countries
D)   imports; foreign countries; AustraliaE) A) and C)
F) None of the above

Question 2

Explain why the increase in GDP per capita understates the whole effect of economic growth on the standard of living.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Economic growth has led not ju...

Question 3

A company named Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Accepted Answer

A)   The sale of a used door to a homeowner
B)   The sale of a new door to a homeowner
C)   The sale of a used door for installation into a new home
D)   The sale of a new door for installation into a new homeE) C) and D)
F) All of the above

Question 4

Economic growth depends more on technological change than on increases in capital per hour worked.

Accepted Answer

A) True 
 B)False

Question 5

In a small economy,gross investment in 2018 is $2 500,consumption spending is $6 000,net investment is $200,government spending is $1 500,exports are $2 000,and imports are $1 000.What is GDP for this economy in 2018?

Accepted Answer

A)   $10 700
B)   $10 300
C)   $10 200
D)   $11 000E) None of the above
F) B) and C)

Question 6

The measure of production that values output using a base year is called

Accepted Answer

A)   value-added GDP.
B)   nominal GDP.
C)   real GDP.
D)   underground GDP.E) A) and B)
F) A) and C)

Question 7

What is 'human capital'?

Accepted Answer

A)   A term used to describe the underground labour market
B)   Manufactured goods that are used to produce other goods
C)   Accumulated knowledge and skills acquired by a worker
D)   The manager or owner of a businessE) C) and D)
F) None of the above

Question 8

The economic growth rate between 2017 and 2018 is calculated by

Accepted Answer

A)   the change in real GDP between the two years divided by real GDP in 2017, multiplied by 100.
B)   real GDP in 2018 minus real GDP in 2017, multiplied by 100.
C)   the change in real GDP between the two years divided by real GDP in 2018, multiplied by 100.
D)   real GDP in 2018 plus real GDP in 2017, divided by 2, and multiplied by 100.E) A) and B)
F) A) and C)

Question 9

China's current rate of GDP growth is quite rapid.Its growth rate is much higher than that of Australia.However,the levels of pollution are much higher than in Australia.Would you consider China to be better off than Australia given this information? Why or why not?
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_____________________________________________________________________________________________

Accepted Answer

China is not better off because of highe...

Question 10

If the per-worker production function shifts up,

Accepted Answer

A)   it now takes more capital per hour worked to get the same amount of real GDP per hour worked.
B)   an economy can increase its real GDP per hour worked without changing the level of capital per hour worked.
C)   the per-worker production function becomes flatter.
D)   negative technological change has occurred in the economy.E) A) and B)
F) A) and C)

Question 11

Which of the following transactions would take place in the 'underground economy'?

Accepted Answer

A)   Elizabeth tells her mother she's going to work but really goes to see a movie.
B)   Paul buys 15 litres of petrol for $1.45 per litre, not realising that 40 cents per litre of that price goes to the government as tax revenue.
C)   John makes chain-link belts and necklaces and sells them at a local market for cash to avoid paying taxes.
D)   Matt bought an iPhone for $400 but decided to sell it on eBay instead of keeping it.E) A) and B)
F) All of the above

Question 12

What is the 'economic growth model'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

A model that explain...

Question 13

The measure of production that values production using current prices is called

Accepted Answer

A)   value-added GDP.
B)   nominal GDP.
C)   real GDP.
D)   underground economy GDP.E) A) and B)
F) A) and C)

Question 14

If real GDP increases,we know for sure that

Accepted Answer

A)   prices have risen.
B)   output has risen.
C)   prices have risen but output has remained constant.
D)   prices have remained constant.E) A) and B)
F) A) and C)

Question 15

According to 'new growth theory',the accumulation of ________ capital is subject to diminishing returns at the ________ level,but not at the level of the economy as a whole.

Accepted Answer

A)   physical; firm
B)   technological; personal
C)   knowledge; firm
D)   physical; productionE) A) and B)
F) None of the above

Question 16

'Transfer payments' are not included in GDP because

Accepted Answer

A)   they are not purchases of goods or services.
B)   their value is included in government expenditure.
C)   they do not generate income.
D)   their market value is difficult to measure.E) A) and D)
F) B) and C)

Question 17

What is the largest component of GDP in Australia,as measured by the 'expenditure method'?

Accepted Answer

A)   Net exports
B)   Government expenditure
C)   Consumption expenditure
D)   Investment expenditureE) None of the above
F) A) and D)

Question 18

Explain the shortcomings of GDP as a measure of total production in an economy,and as a measure of economic well-being.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The measure of GDP leaves out production...

Question 19

'Long-term economic growth' is a term used to describe the

Accepted Answer

A)   falling unemployment rates over time.
B)   rising price level over time.
C)   more rapid growth in population than of real output.
D)   increasing trend in real GDP per capita.E) A) and B)
F) A) and C)

Question 20

'Current-dollar' GDP is another term for

Accepted Answer

A)   inflation-adjusted GDP.
B)   real GDP.
C)   constant-dollar GDP.
D)   nominal GDP.E) B) and D)
F) B) and C)

Exam 13: Gdp: Measuring Total Production, income and Economic Growth

The measure of production that values production using current prices is called

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What is the 'economic growth model'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Correct AnswerverifiedA model that explain...View AnswerShow Answer

The economic growth rate between 2017 and 2018 is calculated by

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Correct AnswerverifiedThe measure of GDP leaves out production...View AnswerShow Answer

If the per-worker production function shifts up,

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What is 'human capital'?

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According to 'new growth theory',the accumulation of ________ capital is subject to diminishing returns at the ________ level,but not at the level of the economy as a whole.

Correct AnswerverifiedShow Answer

'Current-dollar' GDP is another term for

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'Long-term economic growth' is a term used to describe the

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Economic growth depends more on technological change than on increases in capital per hour worked.

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The measure of production that values output using a base year is called

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A company named Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

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Correct AnswerverifiedChina is not better off because of highe...View AnswerShow Answer

'Transfer payments' are not included in GDP because

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If real GDP increases,we know for sure that

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Which of the following transactions would take place in the 'underground economy'?

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Assuming that Australia is the domestic economy,________ are goods and services produced by ________ and purchased by ________.

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What is the largest component of GDP in Australia,as measured by the 'expenditure method'?

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In a small economy,gross investment in 2018 is $2 500,consumption spending is $6 000,net investment is $200,government spending is $1 500,exports are $2 000,and imports are $1 000.What is GDP for this economy in 2018?

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Correct AnswerverifiedEconomic growth has led not ju...View AnswerShow Answer

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What is the 'economic growth model'? _ _

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A model that explain...
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The measure of GDP leaves out production...
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According to 'new growth theory',the accumulation of capital is subject to diminishing returns at the level,but not at the level of the economy as a whole.

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China is not better off because of highe...
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Assuming that Australia is the domestic economy, are goods and services produced by and purchased by .

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Economic growth has led not ju...
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