Question

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answer the question 1) Gross domestic product is calculated by summing up A the total market value of goods and services in the economy. the total market value of final goods and services produced in the economy during a period of time. C) the total quantity of goods and services in the economy. Dy the total quantity of goods and services produced in the economy during a period of time 2) Which of the following goods is directly counted in GDP? A) the bread that Subway purchases for its sandwiches B) the plastic bags that Subway purchases to wrap its sandwiches a 12-inch Subway sandwich purchased by a student D) the lettuce that Subway purchases for its sandwiches L 3) Which of the following transactions represents the purchase of a final good? M Your father buys a new John Deere riding lawn mower. B) Starbucks purchases coffee beans. C) Delta buys a new European-made jetliner. D) Apple computer buys computer processors from Intel. 4) Which of the following is not directly counted in GDP? intermediate goods B) government purchases C) consumer goods D) investment expenditures 5) Which of the following would be directly counted in GDP in 2018? A) kitchen cabinets purchased from Home Depot in 2018 to be installed in a house built in 1997 B) kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a farm house built in 1950 C) kitchen cabinets built in 1887, extracted from the 1887 home, and installed in a brand new country-style home Dy none of the above Table ! Quantity 50 Product Sweatshirts Dental examinations Coffee drinks Coffee beans 40 Price $35.00 95.00 14.00 10.50 1.000 6) Refer to Table 1. Suppose that a simple economy produces only four goods and services, sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals A) 3,090 units. B) $7.250. C) $8,750. 59,750. 7) The nominal GDP of the U.S. in 2016 was approximately $18.6 trillion. This means that A) total income in 2016 was around $18.6 trillion. B) the value of output in 2016 was around $18.6 trillion. C) total spending in 2016 was around $18.6 trillion. D) all the above are true. 8) Which of the following is not an example of a transfer payment? A) social security payments to retirees B) unemployment insurance payments C) social security payments to disabled persons D) health insurance payments to an army private 9) Which of the following is not a durable good? Mclothing B) furniture C) refrigerator D) automobile

Answer 1

1) option B)

2) option C)

3) option A)

4) option A)

Intermediate goods are not counted in GDP, bcoz only final goods & services are included

5) option D)

6) option D)

GDP = 50*35 + 40*75 + 1000*4 + 2000*.5

= 1750 + 3000 + 4000+ 1000

= 9750

7) option D)

All are true

8) option D)

9) option A)