Question 1

Which of the following is included in gross domestic product for an economy in a given year?

Accepted Answer

Gross domestic product only includes the value of final goods produced in a given year, as intermediate goods are already accounted for within the value of final goods, and used goods were already counted in GDP in the year they were initially produced.

Question 2

A final good is one that

Accepted Answer

A final good is a good that is purchased by its final user for consumption or use, rather than for further processing or resale. This means that it is not used as an input in the production of another good, and it is not a natural resource used to produce a good. Final goods are also referred to as consumer goods or end products.

Question 3

Gross domestic product in the economy is measured by the

Accepted Answer

Gross domestic product (GDP) is the dollar value of all final goods and services produced within a country's borders in a given period of time (usually a year). It includes both goods and services, but only final products (products that are purchased by the end user for consumption, investment, or government use). Therefore, choice B is the correct answer.

Question 4

An example of a final good would be

Accepted Answer

A final good is a product that is sold to the end consumer for their personal use or consumption. Option C is the only product that fits this definition as it is a drink sold by Starbucks to a consumer for their personal consumption. The other options are intermediate goods as they are raw materials or products used in the production of the final goods.

Question 5

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Accepted Answer

In the circular flow diagram, households supply the factors of production such as labor, land, and capital to firms, while firms use these factors to produce goods and services which households then purchase. Therefore, households "buy" goods and services from firms, making choice B the correct answer.

Question 6

A car that is produced in 2016 is not sold until 2017.According to the definition of GDP,in which year's GDP should it be counted?

Accepted Answer

GDP is calculated based on the year of production, not the year of sale. Therefore, the car should be counted in the GDP for 2016, the year it was produced.

Question 7

An example of a transfer payment is

Accepted Answer

Transfer payments are payments made by the government to individuals or groups without the expectation of receiving any goods or services in return. Welfare payments are one example of transfer payments, as they are made to eligible individuals to support their basic needs. A teacher's paycheck (A) or a paycheck for a member of the National Guard (B) would not be considered transfer payments as they are payments for services rendered. The purchase of a new bridge in Alaska (D) is a government expenditure and not a transfer payment.

Question 8

Which of the following is not true about the composition of GDP in 2014?

Accepted Answer

According to the Bureau of Economic Analysis, in 2014, durable goods made up around 7.4% of consumer spending, while non-durable goods made up around 25.5% and services made up around 67.1%. Therefore, A is not true as non-durable goods and services make up the majority of consumer spending. B, C, and D are all true statements about the composition of GDP in 2014.

Question 9

An example of an intermediate good would be

Accepted Answer

An intermediate good is a product that is used as an input to produce a final good. In this case, the bread that goes into a sub sandwich is an intermediate good, because it is not sold directly to consumers but rather used to make the final product (the sub sandwich) that is sold. The other choices (soda pop, sub sandwich, potato chips) are all final goods that are sold directly to consumers.

Question 10

Table 19-5
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Stage of Production } & \text { Seller } & \text { Buyer } & \text { Price } \
\hline 1 & \text { Steelmill } & \text { Auto manufacturer } & \$ 10,000 \
\hline 2 & \text { Auto manufacturer } & \text { Auto dealer } & 18,000 \
\hline 3 & \text { Auto dealer } & \text { Consumer } & 25,000 \
\hline
\end{array}$$ Consider the table above showing three stages of production of an automobile.
-Refer to Table 19-5.The value added by the automobile dealer equals

Accepted Answer

The answer of Table 19-5
 \[\begin{array} { | c |...

Question 11

Table 19-5
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Stage of Production } & \text { Seller } & \text { Buyer } & \text { Price } \
\hline 1 & \text { Steelmill } & \text { Auto manufacturer } & \$ 10,000 \
\hline 2 & \text { Auto manufacturer } & \text { Auto dealer } & 18,000 \
\hline 3 & \text { Auto dealer } & \text { Consumer } & 25,000 \
\hline
\end{array}$$ Consider the table above showing three stages of production of an automobile.
-Refer to Table 19-5.The value of each automobile in gross domestic product equals

Accepted Answer

The answer of Table 19-5
 \[\begin{array} { | c |...

Question 12

Which of the following transactions would be included in the official calculation of GDP?

Accepted Answer

The answer of Which of the following transactions would be...

Question 13

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Accepted Answer

By definition, GDP is the sum of the value added of every firm involved in producing all final goods and services. Therefore, the answer is that it "equals" GDP.

Question 14

Scenario 19-1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 19-1.The value added of CANOES-R-US for each canoe equals

Accepted Answer

Value added is calculated by subtracting the cost of intermediate goods from the final selling price. In this scenario, CANOES-R-US buys the shell of the canoe for $300 and sells the finished canoe to the retail store for $800, resulting in a value added of $500 ($800 - $300). Therefore, we choose option C as the correct answer.

Question 15

A transfer payment is a payment by the government to an individual

Accepted Answer

A transfer payment is a payment made by the government to an individual for which the government does not receive a corresponding good or service in return. Examples of transfer payments include welfare benefits, social security, and unemployment compensation.

Question 16

An example of an intermediate good would be

Accepted Answer

Intermediate goods are goods that are used by firms as inputs in the production of final goods. The rims on a new car would be considered an intermediate good since they are used in the production of the final good (the new car). A new car (option A) would be considered a final good since it is sold directly to consumers. A used car (option B) is also a final good, as it has already been sold to a consumer and is no longer being used in the production process. Option D would also be an intermediate good, as the new rims are being used in the production of a final good (the used car being repaired or upgraded).

Question 17

In comparing China to Canada,China's relatively ________ growth rate in GDP would make you more likely to take a job in China,and China's relatively ________ level of GDP would make you less likely to take a job in China.

Accepted Answer

China's high growth rate in GDP indicates a potentially expanding job market and economic opportunities, which may make someone more likely to take a job in China. However, China's relatively low level of GDP compared to Canada may make someone less likely to take a job in China due to concerns about lower salaries or lower standards of living.

Question 18

Scenario 19-1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 19-1.The value of each canoe in gross domestic product equals

Accepted Answer

The answer of Scenario 19-1
CANOES-R-US makes canoes.It buys the shell...

Question 19

How are intermediate goods treated in the calculation of GDP?

Accepted Answer

Intermediate goods are not counted separately in the calculation of GDP. Their value is included as part of the value of the final good for which they are an input. This is done to avoid double-counting the value of the intermediate goods in the calculation of GDP.

Question 20

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Accepted Answer

The answer of Home Depot sells new and used doors...

Quiz 19: Gdp: Measuring Total Production and Income

Which of the following is included in gross domestic product for an economy in a given year?

A final good is one that

Gross domestic product in the economy is measured by the

An example of a final good would be

In the circular flow diagram, supply the factors of production,and goods and services.

A car that is produced in 2016 is not sold until 2017.According to the definition of GDP,in which year's GDP should it be counted?

An example of a transfer payment is

Which of the following is not true about the composition of GDP in 2014?

An example of an intermediate good would be

Which of the following transactions would be included in the official calculation of GDP?

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

A transfer payment is a payment by the government to an individual

An example of an intermediate good would be

In comparing China to Canada,China's relatively growth rate in GDP would make you more likely to take a job in China,and China's relatively level of GDP would make you less likely to take a job in China.

How are intermediate goods treated in the calculation of GDP?

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?