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71. An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?
a.
The value of the goods and services produced by the restaurant is included in both French GDP and U.S. GDP.
b.
The value added by American workers and equipment in France is included in U.S. GDP and the value added
by French workers and equipment is added to French GDP.
c.
The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S.
GDP.
d.
The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in French
GDP.
72. Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it
purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but
commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?
a.
$12 million
b.
$11 million
c.
$10 million
d.
$9 million
73. Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in
American plants. In 2010 Quality Motors produced $30 million worth of automobiles, with $17 million in sales to
Americans, $9 million in sales to Canadians, and $4 million worth of automobiles added to Quality Motors’ inventory.
The transactions just described contribute how much to U.S. GDP for 2010?
a.
$17 million
b.
$21 million
c.
$26 million
d.
$30 million
74. Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in
American plants. In 2008, Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S.
and $13 million in Mexico. In addition, it sold $2 million from the previous year’s inventory in the U.S. The transactions
just described contribute how much to U.S. GDP for 2008?
a.
$12 million
b.
$14 million
c.
$25 million
d.
$27 million
75. Which of the following items is included in U.S. GDP?
a.
goods produced by foreign citizens working in the United States
b.
the difference in the price of the sale of an existing home and its original purchase price
c.
known illegal activities
d.
None of the above is included in U.S. GDP.
76. Which of the following items is included in U.S. GDP?
a.
final goods and services that are purchased by the U.S. federal government
b.
intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period
c.
goods and services produced by foreign citizens working in the U.S.
d.
All of the above are included in U.S. GDP.
77. Which of the following items is included in U.S. GDP?
a.
the estimated value of production accomplished at home, such as backyard production of fruits and vegetables
b.
the value of illegally-produced goods and services
c.
the value of cars and trucks produced in foreign countries and sold in the U.S.
d.
None of the above is included in U.S. GDP.
78. Which of the following is not included in U.S. GDP?
a.
The market value of an oil change that Ben performs on his own car.
b.
The market value of an oil change at Speedy Lube.
c.
The market value of oil purchased by Ben.
d.
Production of foreign citizens living in the United States that work in an oil packaging facility.
79. Which of the following is not included in U.S. GDP?
a.
additions of newly produced output to inventory
b.
production of U.S citizens working in foreign countries.
c.
the estimated rental value of owner-occupied housing
d.
the value of food purchased from a grocery store to make meals at home without pay
80. Which of the following values would be included in U.S. GDP for 2015?
a.
the rent that Sam, an American citizen, would have paid on his home in Houston in 2015 had he not owned
that home.
b.
the rent that Jim, an American citizen, paid on his apartment in San Francisco in 2015.
c.
the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in San Antonio
and practiced law there in 2015
d.
All of the above would be included in U.S. GDP for 2015.
81. Which of the following examples of production of goods and services would be included in U.S. GDP?
a.
Sally, a Canadian citizen, works on a drilling crew in North Dakota for Northland Gas Services, and Northland
sells the natural gas to a utility company in Canada.
b.
Jim grows pecans for his family in the yard of their San Antonio home.
c.
Joe grows marijuana in his Kansas City home and sells it to his friends and neighbors.
d.
None of the above examples of production would be included in U.S. GDP.
82. Which of the following transactions adds to U.S. GDP for 2015?
a.
In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000.
b.
An American management consultant works in Canada during the summer of 2015 and earns the equivalent of
$40,000 during that time.
c.
When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and
Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates,
could be rented for $1,700 per month.
d.
None of the above transactions adds to U.S. GDP for 2015.
83. Which of the following transactions adds to U.S. GDP for 2015?
a.
In 2015, Frank’s Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores. The
2000 pounds of cheese remains in Frank’s inventory at the end of 2015.
b.
An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that
time.
c.
When Len and Mika were both single, they lived in separate apartments and each paid $700 in rent. Len and
Mika got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates,
could be rented for $1,500 per month.
d.
All of the above transactions add to U.S. GDP for 2015.
84. The government of a country, which has adopted American GDP accounting conventions, reported that seasonally
adjusted GDP in quarter 3 was $48 billion at an annual rate. This means that the seasonally-adjusted market value of all
final goods and services produced within this country in quarter 3 was
a.
$4 billion.
b.
$12 billion.
c.
$16 billion.
d.
$48 billion.
GDP
85. The government of country A, which has adopted American GDP accounting conventions, has calculated that the
seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion.
The government will report that GDP in quarter 1 was
a.
$1.25 billion at an annual rate.
b.
$4 billion at an annual rate.
c.
$5 billion at an annual rate.
d.
$20 billion at an annual rate.
86. The statistical discrepancy that regularly arises in national income accounting refers to the slight difference between
a.
personal income and personal disposable income.
b.
estimates of GDP and actual GDP.
c.
the income and expenditure approaches to the calculation of GDP.
d.
the quarterly and annual approaches to the calculation of GDP.
87. A statistical discrepancy
a.
exists because data sources are not perfect, so measures of expenditures and income are not equal.
b.
insures that GDP will approximately equal GNP.
c.
explains the close association between GDP and quality of life measures such as literacy and life expectancy.
d.
explains the inadequacy of GDP in capturing the value of leisure and the value of a clean environment.
88. Which government entity computes U.S. GDP every three months?
a.
the Council of Economic Advisers
b.
the Department of Commerce
c.
the Department of Treasury
d.
the Federal Reserve
89. Which of the following correctly orders U.S. income measures from largest to smallest?
a.
disposable personal income, gross national product, national income, net national product, personal income
b.
personal income, net national product, national income, gross national product, disposable personal income
c.
gross national product, net national product, national income, personal income, disposable personal income
d.
disposable personal income, personal income, national income, net national product, gross national product
90. U.S. GDP and U.S. GNP are related as follows:
a.
GNP = GDP + Value of exported goods - Value of imported goods.
b.
GNP = GDP - Value of exported goods + Value of imported goods.
c.
GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad.
d.
GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.
91. U.S. GNP
a.
includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign
countries.
b.
includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in
foreign countries.
c.
excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in
foreign countries.
d.
excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign
countries.
92. How does U.S. gross domestic product (GDP) differ from U.S. gross national product (GNP)?
a.
GNP = GDP - 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 + transfer payments to households + - indirect sales taxes
d.
GNP = GDP - depreciation - retained earnings
93. If foreign citizens earn less income in the U.S. than U.S. citizens earn in foreign countries,
a.
U.S. net factor payments from abroad are positive, and its GDP is larger than its GNP.
b.
U.S. net factor payments from abroad are positive, and its GNP is larger than its GDP.
c.
U.S. net factor payments from abroad are negative, and its GDP is larger than its GNP.
d.
U.S. net factor payments from abroad are negative, and its GNP is larger than its GDP.
94. The residents of Ireland earn $200 million of income from abroad. Residents of other countries earn $300 million in
Ireland. Therefore, Ireland’s
a.
net factor payments from abroad are positive, and its GDP is larger than its GNP.
b.
net factor payments from abroad are positive, and its GNP is larger than its GDP.
c.
net factor payments from abroad are negative, and its GDP is larger than its GNP.
d.
net factor payments from abroad are negative, and its GNP is larger than its GDP.
95. The residents of country A earn $500 million of income from abroad. Residents of other countries earn $200 million
in country A. These earnings are accounted for in country A’s
a.
GNP which is larger than GDP in country A.
b.
GNP which is smaller than GDP in country A.
c.
GDP which is larger than GNP in country A.
d.
GDP which is smaller than GNP in country A.
96. Jackie, a Canadian citizen, works only in the United States. The value of the output she produces is
a.
included in both U.S. GDP and U.S. GNP.
b.
included in U.S. GDP, but it is not included in U.S. GNP.
c.
included in U.S. GNP, but it is not included in U.S. GDP.
d.
included in neither U.S. GDP nor U.S. GNP.
97. Thomas, a U.S. citizen, works only in Canada. The value of the output he produces is
a.
included in both U.S. GDP and U.S. GNP.
b.
included in U.S. GDP, but it is not included in U.S. GNP.
c.
included in U.S. GNP, but it is not included in U.S. GDP.
d.
included in neither U.S. GDP nor U.S. GNP.
98. A Mexican oil field service company works on oil rigs in the U.S. The value of the company’s services produced by
Mexican citizens and the equipment they own is included in
a.
Mexican GNP and U.S. GNP.
b.
Mexican GDP and U.S. GNP.
c.
Mexican GNP and U.S. GDP.
d.
Mexican GDP and U.S. GDP.
99. Gina, a U.S. citizen, works only in Bermuda. The value of Gina’s production is included in
a.
U.S. GDP and Bermudan GDP.
b.
U.S. GDP and Bermudan GNP.
c.
U.S. GNP and Bermudan GDP.
d.
U.S. GNP and Bermudan GNP.
