MACRO ECONOMICS EXAM QUESTIONS
AND ANSWERS ALL CORRECT
What does GDP stand for? - Answer-Gross Domestic Product
What is value production? - Answer-It uses market prices to value production.
Intermediate goods and services? - Answer-Goods and services that are produced by
one firm and bought by another; used as a component of a final good or service.
Investment? - Answer-Purchases of new capital goods, tools, instruments, machines,
buildings and other constructions in addition to inventory
Government expenditure - Answer-All levels of government on goods and services
Net exports - Answer-Value of exports of goods and services minus the value of imports
of goods and services.
GDP is measured by - Answer-Expenditure Approach and Income Approach
Expenditure=C+I+G+NX - Answer-Consumption, Investment, Government and Net
Exports
Income includes - Answer-Labor earns wages, capital earns interest, land earns rent
and entrepreneurship earns profit
Wages - Answer-payment of labor services
Profit - Answer-Total revenue-Total Cost
Disposable personal income - Answer-income received by households - MINUS- the
personal income taxes paid
Real GDP - Answer-value of final goods and services produced in a given year
expressed by prices of base year
GDP is measured by: - Answer-adding the market value of total final production
If you make dinner for yourself: - Answer-only the market value of ingredients that you
purchased this year is added to GDP.
, Germany's GDP includes - Answer-China produced by the English owned Wedgewood
Company at a factory in Berlin. Germany
Expenditures on US produced steaks, shoes, and doctor visits - Answer-Consumption
Expenditures
Investment in GDP: - Answer-Cars produced during the year but unsold at the end of
the year and the new capital equipment produced and purchased during the year
Bob had 1,000 shirts in inventory, produced 10,000 shirts during the year and ended up
with 1,100 shirts in inventory. The 100 shirts added to his inventory is - Answer-
Investment
GDP is measured through - Answer-the expenditures on goods and services by all
levels of government included
Net exports of goods and services are defined as equal to - Answer-the value of exports
of goods and services minus the imports of goods and services
In calculating GDP, we must - Answer-add the market value of exports and subtract the
market value of imports
In 2007, Candamia's consumption expenditure was 13 billion, interest, rent, and profit
was 1.5 billion, government expenditures on goods and services were 3 billion, net
exports of goods and services amounted to 2 billion, and investment was 8 billion: the
total expenditure was - Answer-26 billion
If consumption was 70 percent of GDP and both investment and government
expenditure was 18 percent of each other than - Answer-exports must be less than
imports
The income approach measures GDP as - Answer-the incomes paid households for the
resources they own
To measure GDP, using the income approach, one of the adjustments made to net
domestic product at factor cost is - Answer-add depreciation
During 2008, net domestic product factor cost equals 3,300 billion. Indirect taxes minus
subsides equals 200 billion, depreciation equals 800 billion, statistical discrepancy
equals zero, and net operating surplus equals 150 billion. The country's GDP is -
Answer-4,300 billion
Real GDP is all final goods and services produced in a year within a country valued at -
Answer-base year prices
AND ANSWERS ALL CORRECT
What does GDP stand for? - Answer-Gross Domestic Product
What is value production? - Answer-It uses market prices to value production.
Intermediate goods and services? - Answer-Goods and services that are produced by
one firm and bought by another; used as a component of a final good or service.
Investment? - Answer-Purchases of new capital goods, tools, instruments, machines,
buildings and other constructions in addition to inventory
Government expenditure - Answer-All levels of government on goods and services
Net exports - Answer-Value of exports of goods and services minus the value of imports
of goods and services.
GDP is measured by - Answer-Expenditure Approach and Income Approach
Expenditure=C+I+G+NX - Answer-Consumption, Investment, Government and Net
Exports
Income includes - Answer-Labor earns wages, capital earns interest, land earns rent
and entrepreneurship earns profit
Wages - Answer-payment of labor services
Profit - Answer-Total revenue-Total Cost
Disposable personal income - Answer-income received by households - MINUS- the
personal income taxes paid
Real GDP - Answer-value of final goods and services produced in a given year
expressed by prices of base year
GDP is measured by: - Answer-adding the market value of total final production
If you make dinner for yourself: - Answer-only the market value of ingredients that you
purchased this year is added to GDP.
, Germany's GDP includes - Answer-China produced by the English owned Wedgewood
Company at a factory in Berlin. Germany
Expenditures on US produced steaks, shoes, and doctor visits - Answer-Consumption
Expenditures
Investment in GDP: - Answer-Cars produced during the year but unsold at the end of
the year and the new capital equipment produced and purchased during the year
Bob had 1,000 shirts in inventory, produced 10,000 shirts during the year and ended up
with 1,100 shirts in inventory. The 100 shirts added to his inventory is - Answer-
Investment
GDP is measured through - Answer-the expenditures on goods and services by all
levels of government included
Net exports of goods and services are defined as equal to - Answer-the value of exports
of goods and services minus the imports of goods and services
In calculating GDP, we must - Answer-add the market value of exports and subtract the
market value of imports
In 2007, Candamia's consumption expenditure was 13 billion, interest, rent, and profit
was 1.5 billion, government expenditures on goods and services were 3 billion, net
exports of goods and services amounted to 2 billion, and investment was 8 billion: the
total expenditure was - Answer-26 billion
If consumption was 70 percent of GDP and both investment and government
expenditure was 18 percent of each other than - Answer-exports must be less than
imports
The income approach measures GDP as - Answer-the incomes paid households for the
resources they own
To measure GDP, using the income approach, one of the adjustments made to net
domestic product at factor cost is - Answer-add depreciation
During 2008, net domestic product factor cost equals 3,300 billion. Indirect taxes minus
subsides equals 200 billion, depreciation equals 800 billion, statistical discrepancy
equals zero, and net operating surplus equals 150 billion. The country's GDP is -
Answer-4,300 billion
Real GDP is all final goods and services produced in a year within a country valued at -
Answer-base year prices
