{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

AP Eco Test 7

# AP Eco Test 7 - *H 7 TAKE-HOME 7 Test Title AP Macro...

This preview shows pages 1–7. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: *H 7 TAKE-HOME 7 *** Test Title: AP Macro, Chapter 7 (Measuring Domestic Output & National Income), Take—Home Test Version: na 1. Suppose Smith pays \$100 to Jones. A) We can say with certainty that the GDP has increased by \$100. B) We can say with certainty that the GDP has increased, but we cannot determine the amount. C) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. D) We need more information to determine whether GDP has changed. 2. Suppose the total market value of all ﬁnal goods and services produced in a particular country in 2004 is \$500 billion and the total market value of ﬁnal goods and services sold is \$450 billion. We can conclude that: A) GDP in 2004 is \$450 billion. B) NDP in 2004 is \$450 billion. C) GDP in 2004 is \$500 billion. D) inventories in 2004 fell by \$50 billion. 3. By summing the dollar value of all market transactions in the economy we would: A) be determining the market value of all resources used in the production process. B) obtain a sum substantially larger than the GDP. C) be determining value added for the economy. D) be measuring GDP. 4. Which of the following is an intermediate good? A) the purchase of gasoline for a ski trip to Colorado B) the purchase of a pizza by a college student. C) the purchase of baseball uniforms by a professional baseball team. D) the purchase of jogging shoes by a professor 5. Gross investment refers to: A) private investment minus public investment. B) net investment plus replacement investment. C) net investment after it has been "inﬂated" for changes in the price level. D) net investment plus net exports. olndCB-07, Measuring National Output & Income, Take-Home Page 1 6. Government purchases include government spending on: 10. A) B) C) D) A) B) C) D) government consumption goods and public capital goods. government consumption goods only. public capital goods only. government consumption goods, public capital goods, and transfer payments. . Transfer payments are: excluded when calculating GDP because they only reﬂect inﬂation. excluded when calculating GDP because they do not reﬂect current production. included when calculating GDP because they are a category of investment spending. included when calculating GDP because they increase the spending of recipients. The value of US. imports is: A) B) C) D) added to exports when calculating GDP because imports reﬂect spending by Americans. subtracted from exports when calculating GDP because imports do not constitute spending by Americans. subtracted from exports when calculating GDP because imports do not constitute production in the United States. added when calculating GDP because imports do not constitute production in the United States. . The ZZZ Corporation issued \$25 million in new common stock in 2004. It used \$18 million of the proceeds to replace obsolete equipment in its factory and \$7 million to repay bank loans. As a result, investment: A) B) C) D) of \$7 million has occurred. of \$25 million has occurred. of \$1 8 million has occurred. has not occurred. The concept of net domestic investment refers to: A) B) C) D) the amount of machinery and equipment used up in producing the GDP in a speciﬁc year. the difference between the market value and book value of outstanding capital stock. gross domestic investment less net exports. total investment less the amount of investment goods used up in producing the year's output. olndCB-O7, Measuring National Output & Income, Take-Home Page 2 Use the following to answer questions 11-14: Answer the next question(s) on the basis of the following national income data for the economy. All ﬁgures are in billions. Personal consumption expenditures \$400 Government purchases 128 Gross private domestic investment 88 Net exports 7 Net foreign factor income earned in the US. 0 Consumption of ﬁxed capital 43 Indirect business taxes 50 Compensation of employees 369 Rents 12 Interest 15 Proprietors' income 52 Corporate income taxes 36 Dividends 24 Undistributed corporate profits 22 11. The gross domestic product for the above economy is: A) \$584. B) \$592. C) \$609. D) \$623. 12. Refer to the above data. Net domestic product is: A) \$520. B) \$580. C) \$623. D) \$573. 13. Refer to the above data. The national income is: A) \$561. B) \$573. C) \$5 80. D) \$530. 14. Refer to the above data. Disposable income: A) cannot be determined from the data given. B) is \$484. C) is \$416. D) is \$502. olndCB-07, Measuring National Output & Income, Take-Home Page 3 Use the following to answer questions 15-16: Answer the next question(s) on the basis of the following data. All ﬁgures are in billions of dollars. Proprietors’ income 35 20 Compensation of employees 300 Consumption of ﬁxed capital 15 Gross investment 80 Rents 10 Interest 20 Exports 30 Imports 50 Corporate proﬁts 25 Indirect business taxes 5 Net foreign factor income 0 15. Refer to the above data. National income is: A) \$395. B) \$380. C) \$375. D) \$360. 16. Refer to the above data. Gross domestic product is: A) \$395. B) \$380. C) \$375. D) \$360. 17. When an economy's production capacity is expanding: A) nominal GDP, but not necessarily real GDP, is rising. B) net exports is always a positive amount. C) DI exceeds PI. D) domestic investment exceeds depreciation. 18. Consumption of ﬁxed capital (depreciation) can be determined by: A) adding indirect business taxes to NDP. B) subtracting NDP from GDP. C) subtracting net investment from GDP. D) adding net investment to gross investment. olndCB-07, Measuring National Output & Income, Take-Home Page 4 19. GDP excludes: 20. 21. 22. 23. A) B) C) D) the market value of unpaid work in the home. the production of services. the production of nondurable goods. positive changes in inventories. Value added refers to: A) B) C) D) any increase in GDP that has been adjusted for adverse environmental effects. the excess of gross investment over net investment. the difference between the value of a ﬁrm's output and the value of the inputs it has purchased from others. the portion of any increase in GDP that is caused by inﬂation as opposed to an increase in real output. National income measures: A) B) C) D) nominal GDP after it has been inﬂated or deﬂated for changes in the value of the dollar. the after-tax income of resource suppliers. the market value or cost of the resources used in the production of the national output. the amount of wage, rent, interest, and proﬁts income actually received by households. Transfer payments are included in: A) B) C) D) NI. PI. GDP. NDP. In a typical year which of the following measures of aggregate output and income is likely to be the smallest? A) B) C) D) gross domestic product national income disposable income personal income olndCB-07, Measuring National Output & Income, Take-Home Page 5 24. Nominal GDP is: A) the sum of all monetary transactions that occur in the economy in a year. B) the sum of all monetary transactions involving ﬁnal goods and services that occur in the economy in a year. C) the amount of production that occurs when the economy is operating at full employment. D) money GDP adjusted for inﬂation. 25. A price index is: A) a comparison of the price of a market basket from a ﬁxed point of reference. B) a comparison of real GDP in one period relative to another. C) the cost of a market basket of goods and services in a base period divided by the cost of the same market basket in another period. D) a ratio of real GDP to nominal GDP. Use the following to answer questions 26-27: Use the following table for a hypothetical single-product economy. Price Price Units of of bagel index Year Output per unit (year 1 = 109) 1 10 \$10 100 2 12 20 200 3 15 30 300 4 20 40 400 26. Refer to the above data. Nominal GDP in year 4 is: A) \$320. B) \$450. C) \$225. D) \$800. 27. Refer to the above data. Real GDP in year 4 is: A) \$320. B) \$450. C) \$200. D) \$800. olndCB-07, Measuring National Output & Income, Take-Home Page 6 28. 29. 30. Real GDP is: A) the nominal value of all goods and services produced in the economy. B) the nominal value of all goods and services produced in the domestic economy corrected for inﬂation or deﬂation. C) that aggregate output that is produced when the economy is operating at full employment. D) always greater than nominal GDP. A large underground economy results in an: A) understated GDP. B) overstated GDP. C) understated GDP price index. D) overstated GDP price index. GDP data are criticized as being inaccurate measures of economic welfare because: A) they do not take into account changes in the amount of leisure. B) they do not take into account all changes in product quality. C) they do not take into account the adverse effects of economic activity on the environment. D) of all of the above considerations. olndCB-07, Measuring National Output & Income, Take-Home Page 7 ...
View Full Document

{[ snackBarMessage ]}

### Page1 / 7

AP Eco Test 7 - *H 7 TAKE-HOME 7 Test Title AP Macro...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online