Description
Principles of Economics International Edition 9th Edition By Michael – Test Bank
Chapter 05 National Income Accounting
MULTIPLE CHOICE
1.The national income accounting system provides a measure of:
|
a. |
only the total amount of profits made by the business firms. |
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b. |
the total value of all inputs used in production. |
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c. |
government budget surplus and deficit. |
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d. |
the net exports of a nation. |
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e. |
the output of an entire economy. |
ANS: E DIF: Easy REF: 1 OBJ: ch. 05, 1
NAT: Analytic | Measuring the Economy TOP: Measures of Output and Income
MSC: Knowledge
2.National income accounting can best be characterized as:
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a. |
a set of rules used to summarize economic activity over a given period of time. |
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b. |
a method for comparing different political systems. |
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c. |
a microeconomic model of the economy used by the Federal Reserve bank. |
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d. |
a statistical measure of the income received by consumers as opposed to businesses. |
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e. |
a standardized economic report authored by politicians. |
ANS: A DIF: Easy REF: Ch 5, 1 OBJ: ch. 05, 1
NAT:Reflective Thinking | Measuring the Economy
TOP:Measures of Output and IncomeMSC:Comprehension
3.Identify the correct statement.
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a. |
National income accounting measures only the flow of output between the different sectors of the economy. |
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b. |
National income accounting summarizes the level of production in an economy over a decade. |
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c. |
National income accounting explains diagrammatically the flows of goods and services and of money expenditures (income). |
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d. |
National income accounting summarizes and categorizes the productive activity in an economy over a year. |
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e. |
National income accounting measures the total money supply in the economy. |
ANS: D DIF: Moderate REF: 1 OBJ: ch. 05, 1
NAT: Analytic | Measuring the Economy TOP: Measures of Output and Income
MSC: Knowledge
4.Which of the following would be included in the calculation of the GDP for the year 2010?
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a. |
Purchase of a 2004 model Volkswagen sedan in 2010 |
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b. |
Swapping of baseball cards among two college students |
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c. |
Car repairs done by a person on his/her own |
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d. |
Fresh lemonade sold at a local diner |
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e. |
A lamp sold at a garage sale |
ANS: D DIF: Moderate REF: 1.a OBJ: ch. 05, 1
NAT:Reflective Thinking | Measuring the Economy
TOP: Measures of Output and Income MSC: Application
5.Which of the following must be included in the calculation of GDP?
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a. |
The sale of a used car to an auto dealer |
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b. |
Bartering lawn care services for car washes |
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c. |
A father staying at home to attend to his child |
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d. |
The sale of an illegal cable box |
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e. |
Payment made for a SAT preparation class |
ANS: E DIF: Moderate REF: Ch 5, 1.a OBJ: ch. 05, 1
NAT: Reflective Thinking | Measuring the Economy
TOP:Measures of Output and IncomeMSC:Comprehension
6.Productive activity in the underground economy:
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a. |
results in an overstatement of actual income and production in the national accounting system. |
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b. |
consists of unrecorded cash transactions. |
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c. |
is estimated and included in the national income accounting system. |
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d. |
poses no problem for the measurement of gross domestic product. |
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e. |
does not affect GDP but is included in the value-added computations. |
ANS: B DIF: Easy REF: 1.a OBJ: ch. 05, 1
NAT:Reflective Thinking | Measuring the Economy
TOP:Measures of Output and IncomeMSC:Comprehension
7.Which of the following would not be included in the calculation of GDP?
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a. |
Vegetables grown and consumed by a nonfarm family |
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b. |
The purchase of a new Porsche |
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c. |
The sale of meat at the local grocery store |
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d. |
The government purchase of an F-14 fighter plane |
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e. |
The payment made to an accountant for the preparation of tax forms |
ANS: A DIF: Moderate REF: Ch 5, 1.a OBJ: ch. 05, 1
NAT: Reflective Thinking | Measuring the Economy
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