23 - Chapter 23 Measuring a Nation's Income Multiple Choice...

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Chapter 23 Measuring a Nation's Income Multiple Choice 1. Which of the following statements about GDP is correct? a. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate. b. Money continuously flows from households to government and then back to households, and GDP measures this flow of money. c. GDP is to a nation’s economy as household income is to a household. d. All of the above are correct. TOP: Gross domestic product MSC: Interpretive 2. Which of the following statements about GDP is correct? a. GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services. b. Money continuously flows from households to firms and then back to households, and GDP measures this flow of money. c. GDP is generally regarded as the best single measure of a society’s economic well-being. d. All of the above are correct. TOP: Gross domestic product MSC: Interpretive 3. If a nation’s GDP rises, then it must be the case that the nation’s a. income and expenditure both rise. b. income and saving both rise. c. income rises, but expenditure may rise or fall. d. saving rises, but income may rise or fall. TOP: Gross domestic product | Income | ExpendituresMSC: Interpretive 4. 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. TOP: Gross domestic product MSC: Definitional 5. In computing GDP, market prices are used to value final goods and services because a. market prices reflect the values of goods and services. b. market prices do not change much over time, so it is easy to make comparisons between years. c. if market prices are out of line with how people value goods, the government sets price ceilings and price floors. d. None of the above is correct; market prices are not used in computing GDP. TOP: Gross domestic product | Value MSC: Interpretive 6. Which of the following is not included in GDP? a. unpaid cleaning and maintenance of houses b. services such as those provided by lawyers and hair stylists c. the estimated rental value of owner-occupied housing d. production of foreign citizens living in the United States TOP: Gross domestic product MSC: Definitional 212
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213 Chapter 23/Measuring a Nation's Income 7. The value of the housing services provided by the economy's owner-occupied houses is a. included in GDP and the estimated rental values of the houses is used to place a value on these housing services. b. included in GDP and the actual mortgage payments made on the houses is used to estimate the value of these
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This note was uploaded on 03/02/2010 for the course ECON 04D4 taught by Professor Huahea during the Spring '10 term at Embry-Riddle FL/AZ.

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23 - Chapter 23 Measuring a Nation's Income Multiple Choice...

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