Sample Quiz 2

Sample Quiz 2 - Sample Quiz 3 Multiple Choice Identify the...

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Sample Quiz 3 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. If a state made a previously-illegal activity such as gambling or prostitution legal, then, other things equal, GDP a. necessarily decreases. b. necessarily increases. c. doesn't change because both legal and illegal production are included in GDP. d. doesn't change because these activities are never included in GDP. Use the following table to answer the following questions. Table 23-1. The data pertain to the nation of Simplia for the year 2006. GDP $110 Income Earned by Citizens Abroad $ 5 Income Foreigners Earn here $ 15 Losses from Depreciation $ 4 Indirect Business Taxes $ 6 Business Subsidies $ 2 Statistical Discrepancy $ 0 Retained Earnings $ 5 Corporate Income Taxes $ 6 Social Insurance Contributions $ 10 Interest Paid to Households by Government $ 5 Transfer Payments to Households from Government $ 15 Personal Taxes $ 30 Non-tax payments to Government $ 5 ____ 2. Refer to Table 23-1 . NNP for this economy is a. $100. b. $96. c. $90. d. $88. ____ 3. How does U.S. gross domestic product (GDP) differ from U.S. gross national product (GNP)? a. GNP = GDP minus losses from depreciation b. GNP = GDP + income earned by U.S. citizens abroad - income that foreign citizens earned in the U.S. c. GNP = GDP + income earned by corporations d. GNP = GDP - indirect business taxes + business subsidies ____ 4. The component of GDP called consumption consists of a. household spending on durable goods, but not household spending on nondurable goods or on services. b. household spending on durable and nondurable goods, but not household spending on services. c. household spending on durable and nondurable goods as well as household spending on services. d. spending by households and business firms on durable and nondurable goods as well as
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spending by households and business firms on services. ____ 5. During the third quarter of 2006, a firm produces consumer goods and adds some of those goods to its inventory. During the fourth quarter of that year, the firm sells the goods at a retail outlet, with the result that the value of its inventory at the end of the fourth quarter is smaller than the value of its inventory at the end of the third quarter. These actions affect which component(s) of fourth-quarter GDP? a. These actions affect only consumption, and they affect consumption positively. b. These actions affect only investment, and they affect investment positively. c. These actions affect consumption positively and investment negatively. d. These actions affect both consumption and investment positively. ____ 6. A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result, a. U.S. investment and GDP increase, but German GDP is unaffected. b.
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Sample Quiz 2 - Sample Quiz 3 Multiple Choice Identify the...

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