Chapter 06 Test Bank
Multiple Choice Questions
1. GDP is:
A. the sum of all currency and coins in circulation.
B. the value of all final goods and services produced by a government.
C. the value of all final good and services produced anywhere in the world by a nation's firms.
D. the value of all final goods and services produced domestically.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
2. Final goods or services used to compute GDP refer to:
A. the sum of all wages paid to laborers.
B. the factors of production used to produce output.
C. goods and services purchased by the ultimate users.
D. the value of outstanding shares of stock of manufacturing firms.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
3. Consumption in the United States is about ____________ of GDP, and it moves relatively
little over time.
A. 10%
B. 33%
C. 68%
D. 90%
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
4. The demand measure of GDP accounting adds together:
A. wages and salaries, rent, interest, and profit.
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,B. consumption, investment, government purchases, and trade balance.
C. consumption, government purchases, wages and salaries, and trade balance.
D. consumption, interest, government purchases, and trade balance.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
5. Consumption is the purchase of goods and services by:
A. households.
B. government.
C. business firms.
D. foreign buyers.
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
6. Which of the following are most likely classified by economists as consumer durable goods?
A. food, clothing
B. drugs, toys, magazines, books
C. automobiles, furniture
D. stocks, bonds
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
7. Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment
equals $200 billion, and government spending equals $260 billion, then:
A. exports exceed imports by $50 billion.
B. imports exceed exports by $50 billion.
C. imports exceed exports by $150 billion.
D. exports exceed imports by $150 billion.
Answer: A
Reference:
Explanation:
This file is copyright 2023, Rice University. All Rights Reserved.
, Type: Multiple Choice Difficulty: Easy Category: Apply
8. The value of what businesses provide to other businesses is captured in the final products at
the end of the __________ chain.
A. service
B. value
C. production
D. supply
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
9. ___________ is a small category that refers to the goods produced by one business that
have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves.
A. Inventories
B. Services
C. Structures
D. Durable goods
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
10. In order to avoid double counting, statisticians just count the __________________.
A. final inventories
B. final goods and services
C. intermediate goods and services
D. durable goods and nondurable goods
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
11. Which of the following is included in the calculated Gross Domestic Product?
A. Farmer Freddie sells his second tractor to his son.
B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner.
This file is copyright 2023, Rice University. All Rights Reserved.
Multiple Choice Questions
1. GDP is:
A. the sum of all currency and coins in circulation.
B. the value of all final goods and services produced by a government.
C. the value of all final good and services produced anywhere in the world by a nation's firms.
D. the value of all final goods and services produced domestically.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
2. Final goods or services used to compute GDP refer to:
A. the sum of all wages paid to laborers.
B. the factors of production used to produce output.
C. goods and services purchased by the ultimate users.
D. the value of outstanding shares of stock of manufacturing firms.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
3. Consumption in the United States is about ____________ of GDP, and it moves relatively
little over time.
A. 10%
B. 33%
C. 68%
D. 90%
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
4. The demand measure of GDP accounting adds together:
A. wages and salaries, rent, interest, and profit.
This file is copyright 2023, Rice University. All Rights Reserved.
,B. consumption, investment, government purchases, and trade balance.
C. consumption, government purchases, wages and salaries, and trade balance.
D. consumption, interest, government purchases, and trade balance.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
5. Consumption is the purchase of goods and services by:
A. households.
B. government.
C. business firms.
D. foreign buyers.
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
6. Which of the following are most likely classified by economists as consumer durable goods?
A. food, clothing
B. drugs, toys, magazines, books
C. automobiles, furniture
D. stocks, bonds
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
7. Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment
equals $200 billion, and government spending equals $260 billion, then:
A. exports exceed imports by $50 billion.
B. imports exceed exports by $50 billion.
C. imports exceed exports by $150 billion.
D. exports exceed imports by $150 billion.
Answer: A
Reference:
Explanation:
This file is copyright 2023, Rice University. All Rights Reserved.
, Type: Multiple Choice Difficulty: Easy Category: Apply
8. The value of what businesses provide to other businesses is captured in the final products at
the end of the __________ chain.
A. service
B. value
C. production
D. supply
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
9. ___________ is a small category that refers to the goods produced by one business that
have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves.
A. Inventories
B. Services
C. Structures
D. Durable goods
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Understand
10. In order to avoid double counting, statisticians just count the __________________.
A. final inventories
B. final goods and services
C. intermediate goods and services
D. durable goods and nondurable goods
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
11. Which of the following is included in the calculated Gross Domestic Product?
A. Farmer Freddie sells his second tractor to his son.
B. Suzanne buys a love seat and chair for $85 at the yard sale on the corner.
This file is copyright 2023, Rice University. All Rights Reserved.
