Economics, 10th Edition by William Boyes - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below 1. The national income accounting system provides a measure of: a. only the total amount of profits made by business firms. b. the total value of all inputs …
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Economics, 10th Edition by William Boyes – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
1. The national income accounting system provides a measure of:
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2. National income accounting can best be characterized as:
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3. Identify the correct statement.
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4. Which of the following would be included in the calculation of the GDP for the year 2010?
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5. Which of the following must be included in the calculation of GDP?
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6. Productive activity in the underground economy:
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7. Which of the following would not be included in the calculation of GDP?
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8. If the value of intermediate goods and services are included in GDP, then:
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9. Which of the following will be categorized as an intermediate good in national income accounting?
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10. To avoid double counting in the calculation of GDP,
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11. The term “value added” is used to describe:
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12. A soft-drink bottling company supplies six-packs of orange flavored soda to retailers for a price of $2 each. If the components in each six-pack costs the bottling company $1.50, the value added, to each six-pack, by the bottling company is:
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| The table given below reports the value of sales at each stage of production of an economics book. Table 5.1
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13. Refer to Table 5.1. What is the value-added by processing timber into paper?
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14. Refer to Table 5.1. What is the contribution to GDP from the production of an economics book?
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15. Refer to Table 5.1. Compute the market price of an economics book.
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| The table given below shows various stages of production of a Corvette, a sports car produced by General Motors Company (GMC): Table 5.2
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16. According to Table 5.2, the value added by the dealer is:
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17. According to Table 5.2, the contribution to GDP from the production of this car is:
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18. Identify the impact of an increase in the inventory stock during a year.
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19. When estimating GDP, changes in the level of inventory are calculated because:
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20. Which of the following accounts for the largest percentage of output in the United States?
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21. What is the approximate percent of GDP produced by private firms in the United States?
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| The table given below reports the sales value at each stage of production of the soft drink, Pepsi. Table 5.3
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22. Refer to Table 5.3. The value added by the wholesaler is equal to:
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23. Refer to Table 5.3. If Pepsi was the only good produced in the economy, then what would be the value of GDP, according to the expenditures approach?
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24. Refer to Table 5.3. Compute GDP according to the income approach if Pepsi is assumed to be the only good produced in the economy.
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25. Consider GDP calculated according to the expenditures approach. Which of the following components of GDP would need to decrease for GDP to increase?
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26. Consider a hypothetical economy, whose GDP was $10,000, consumption equaled $9,800, investment equaled $125, goods exported equaled $255, and goods imported equaled $500, in 2010. Calculate the government spending in this economy during the year.
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27. Which of the following components of GDP accounts for the bulk of national expenditures in the United States?
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28. Bill Gates’ recent purchase of a new Rolls-Royce automobile produced in Great Britain will:
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29. GDP, according to the income method, is the sum of:
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30. The stock of unused goods held by a firm is called a(n):
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31. The total expenditure on goods and services in a country must be the same as the total income earned from selling goods and services because:
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32. If ‘C’ denotes consumption expenditure, ‘I’ denotes investment expenditure, ‘G’ denotes government expenditure and ‘X’ denotes net exports, then C + I + G + X equals:
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33. A reduction in the value of capital goods over time due to their use in production is called:
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34. Which of the following is included in GDP computation according to the income method?
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35. The term capital consumption allowance is defined as:
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36. The difference between gross and net investment is referred to as:
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37. The purchase of a new machine to replace the one that is worn out is:
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38. Which of the following is true of indirect business taxes?
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39. Which of the following can be a valid reason for Canada’s GDP exceeding its GNP in 2001?
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40. Which of the following is subtracted from GNP when calculating net national product?
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41. The difference between GNP and NNP is equal to:
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42. If net investment spending in a nation is zero, we can conclude that:
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43. National income is the sum of:
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44. Which of the following is not included in national income?
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| Scenario 5.1 Suppose that personal income is $250 billion. Furthermore, assume that retained corporate earnings are $2 billion, social security taxes are $15 billion, social security benefit checks equal $16 billion, the capital consumption allowance is $32 billion, and corporate taxes amount to $40 billion. |
45. Refer to Scenario 5.1. Gross national product of this nation will be:
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46. Refer to Scenario 5.1. What will be the value of net national product in this country?
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47. Refer to Scenario 5.1. The national income of this nation will be:
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| The table given below reports the value of different economic variables of a country during a year. Table 5.4
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48. Refer to Table 5.4. Compute the GNP of the country.
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49. Refer to Table 5.4. Calculate the NNP for this country.
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50. Refer to Table 5.4. What will be the value of gross investment?
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51. Refer to Table 5.4. Calculate the national income of this country.
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52. Personal income is equal to:
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53. Which of the following would not be included as part of personal income?
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54. Personal income is equal to:
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55. Which of the following represents the amount of income that is actually available to people for consumption and saving?
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| The table given below reports the value of the different economic variables of a nation during a year. Table 5.5
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56. Refer to Table 5.5. For the economy described in the table above, personal income is:
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57. Refer to Table 5.5. For the economy described in the table above, disposable personal income is:
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58. Which of the following is true of nominal GDP?
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59. Which of the following is true of real GDP?
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60. If nominal GDP of a country increased and real GDP remained unchanged in a particular year, which of the following is most likely to have taken place?
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61. If both real GDP and nominal GDP of a country increased at the same rate in a particular year, which of the following is most likely to have taken place?
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62. Consider a small country producing only two commodities (coffee beans and corn). Following are the price and output of these two commodities in the year 2008:
Assuming the price level in the economy remains same while the output of both these products increase by 10 percent in 2009, calculate the value of real GDP in this country for the year 2009?
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63. Consider a small country producing only two commodities (coffee beans and corn). Following are the price and output of these two commodities in the year 2008:
Assuming that the output of these two commodities remains constant, while the price of each rises by 10 percent in 2009, compute the value of real GDP in 2009.
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64. Which of the following industrial countries experienced a relatively slower growth of real GDP in the latter half of the 1990s?
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| The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a nation) for the years 1995 and 2003. Table 5.6
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65. Refer to Table 5.6. Calculate the nominal GDP for 1995.
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66. Refer to Table 5.6. What is the nominal GDP for 2003?
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67. Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 1995 as the base year?
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68. Refer to Table 5.6. What is the constant-dollar real GDP growth from 1995 to 2003 using 2003 as the base year?
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69. The price index for the current year is 180. This means that, on average, prices in the current year are:
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70. Suppose the price index is 100 in the base year and the price of a pound of oranges in that year is $1.96. Now, if the price index changes to 105 in the following year, how much would a pound of oranges cost?
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71. Suppose the current price of DVDs is $16, while its base-year price is $11.50. The value of the price index for the current year is approximately:
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| The table given below reports the price of soda over four consecutive years. Table 5.7
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72. Refer to Table 5.7. Compute the price index for the base year.
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73. Refer to Table 5.7. Compute the price index for the third year.
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74. Refer to Table 5.7. By what percentage did the price of soda increase from the third to the fourth year?
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75. In terms of price indexes, what is a COLA?
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76. The consumer price index:
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77. The producer price index was earlier known as _____.
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78. National income accounting fills in the dollar values in the circular flow of income.
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79. The circular flow diagram validates the fact that the different sectors in the economy are independent.
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80. The circular flow diagram shows the flow of money and goods and services between households, firms, government, and foreign countries.
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81. GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services.
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82. In-kind wages are not included in GDP.
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83. The services of a husband or wife as a homemaker and cash gains from a lottery are included in the calculation of gross domestic product.
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84. The sale of live cattle to a slaughterhouse constitutes a final transaction that is counted as part of the gross domestic product.
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85. The value added approach involves adding up the value of the final product and the value of intermediate goods used in the production process.
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86. According to the expenditures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investment.
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87. Other things remaining unchanged, a decline in imports is associated with an increase in gross domestic product.
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88. Wheat produced in the U.S. but sold in Japan would not be included while calculating the U.S. GDP.
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89. Depreciation must be subtracted from the calculation of gross domestic product.
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90. Personal income and property taxes paid by individuals are not included in the income approach of gross domestic product calculation.
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91. Gross national product in terms of the income method is equal to national income plus indirect business taxes minus the capital consumption allowance.
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92. The output produced by domestically owned firms in foreign countries is included in the U.S. GDP but not in the U.S. GNP.
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93. When indirect business taxes are subtracted from GDP we get net national product of a nation.
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94. FICA taxes and corporate retained earnings are subtracted from national income when personal income is computed.
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95. The income that is available to individuals for consumption or investment is called disposable income.
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96. To arrive at a more accurate measure of real output changes in an economy, nominal GDP figures should be adjusted for inflation.
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97. A price index is a measure of the average level of prices in an economy.
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98. If the price level in any country increases by 15 percent during a year, then the price index for that year will be 85 as compared to the base year.
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99. The value of a price index in the base year will always be zero.
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100. The market basket of goods and services used to calculate the consumer price index [CPI] by the Department of Labor in the U.S. changes only every two years.
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101. The consumer price index [CPI] is considered the best measure of the cost of living of individuals in a country.
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102. The consumer price index [CPI] measures price changes at an earlier stage of production than the producer price index [PPI], hence, increases in the CPI are usually followed by increases in the PPI.
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103. Since there are smaller fluctuations in the equilibrium prices of final goods than in the prices of intermediate goods, the producer price index is more volatile than the consumer price index.
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104. Most countries tend to follow only one price index to measure the price level in an economy because all prices rise or fall at the same time or by the same amount.
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1. Which of the following is a basic assumption of an economic analysis?
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2. What do you mean by the term ‘free market’?
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3. Which of the following is a step that economists take in order to examine a real-world issue?
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4. Which of the following is likely to cause an outward shift of a production possibility curve?
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5. Which of the following is a possible advantage of a free market condition?
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6. Which of the following is true?
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7. Which of the following will possibly cause a leftward shift in the production possibility curve, representing good X and good Y?
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| Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries. |
8. Refer to figure 5.1. What does the movement from point A to point B on the production possibility curve indicate?
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9. Refer to figure 5.1. Assume that the economy is initially at point G on the production possibility curve. To consume an amount of luxury good, shown by the distance O to L, the country will have to give up a quantity of necessity good, indicated by the distance _____.
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10. Refer to figure 5.1. Suppose the country represented in the figure is a low income country. Given a voluntary choice, the country will choose to be:
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11. Refer to figure 5.1. Under which of the following conditions, would the residents of the country choose to consume luxury goods?
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12. Refer to figure 5.1. An increase in the country’s gross domestic product will cause:
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13. Refer to figure 5.1. A fall in the gross domestic product of the country will lead to:
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14. Which of the following is a possible drawback of horizontal fracking?
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15. A good or service is said to be scarce when:
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16. To say that “there is a scarcity of gold” means that:
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17. The term self-interest, as viewed by economists, means that:
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18. Individuals acting with self-interest:
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19. The phrase in the text, ‘human beings are self-interested, not selfish’ means that:
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20. Which of the following is a possible cause of an increase in profit from the sale of goods and services?
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21. When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction, they are said to be:
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| Figure 5.2. The figure shows the supply and demand curves of a firm. |
22. Refer to figure 5.2. Which of the following will cause a shift in the supply curve from S to S1?
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23. Refer to figure 5.2. An increase in the cost of production will lead to a(n):
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24. Refer to figure 5.2. A shift in the supply curve from S to S1leads to:
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25. Refer to figure 5.2. Which of the following is true?
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26. Which of the following is true?
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27. What do you mean by the term ‘market process’?
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28. Which of the following is a possible cause of a rightward shift in the supply of healthcare?
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29. Which of the following statements about health care is true?
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30. Which of the following is a possible difference between health care and other products?
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31. Which of the following is a possible reason for a comparatively steeper demand curve for health care?
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32. Which of the following statements is true?
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33. Which of the following statements is true?
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34. Which of the following is a possible cause of an increase in the demand for health care?
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35. In which of the following situations will the price of medical care decrease with an increase in its demand?
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36. Which of the following possibly determines the allocation of goods and services in a free market?
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37. Which of the following helps in determining whether health care cost rises because of government policy, or because of demand rising faster than supply?
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38. Which of the following is the purpose of a minimum wage?
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39. Which of the following statements is true?
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40. What do you mean by the term ‘equilibrium wage’?
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41. A wage that allows people to pay for the necessities of life is known as a(n):
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42. Which of the following is a possible outcome of a minimum wage imposed by a government?
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43. Which of the following statements is true?
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44. Which of the following is true with regard to minimum wages?
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45. Which of the following is true?
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| Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. |
46. Refer to figure 5.3. Which of the following is true?
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47. Refer to figure 5.3. Which of the following is a possible outcome of a fall in the wage rate from $6 to $4?
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48. Refer to figure 5.3. If people refuse to offer labor unless they receive a wage higher than the equilibrium wage, then:
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49. Refer to figure 5.3. Suppose the government imposes a minimum wage of $8. Which of the following is a possible outcome of the imposition of a minimum wage above the equilibrium wage rate?
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50. Refer to figure 5.3. The surplus or unemployment in the labor market is represented by:
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51. Economic growth is represented by an inward shift of the production possibility curve.
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52. One of the assumptions of an economic analysis is that market functions are controlled by the government.
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53. To examine a real-world issue, economists look at the real-world results to see how they differ from those of a free market.
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54. The production possibilities curve of a low income country lies outside the production possibilities curve of a high income country.
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55. People are compelled to make a choice because of the lack of time and money to buy everything they want.
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56. Scarcity impels an individual to make choices.
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57. Hydraulic fracking involves pumping millions of gallons of chemically treated water into the wells at pressures of 9,000 pounds per square inch or more.
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58. One of the drawbacks of horizontal fracking is that it drew workers from other industries to the fracking industry.
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59. Sellers are more willing to supply a good or service for which the profit is low than to supply a good or service for which the profit is high.
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60. The demand for health care is perfectly elastic.
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61. Medicare subsidizes or provides health care to the poor and medicaid provides health care to the elderly.
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62. Programs like Medicaid in the United States provide low-income households with medical care, because of the attitude of unfairness associated with the allocation of health care.
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63. The imposition of a minimum wage in the unskilled labor market creates labor surplus or unemployment.
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64. The market process ensures that, when all transactions are voluntary, resources get allocated to the use where they are valued the most.
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65. In the United States, there is a federal minimum wage that is followed by each state.
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66. The lowest of the federal or state minimum wage levels prevails in each state.
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67. The items held constant in the study of economic theory is known as the determinants of demand and the determinants of supply.
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68. Minimum wage adversely affects unskilled workers who do not have work, aged 16 to 19.
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Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
