Multiple Choice Questions:
1. GDP is defined as the?
a. Value of all final goods and services produced in a country in a period of time.
b. Value of all final goods produced in a country in a period of time.
c. Value of all goods and services produced in a country in a period of time.
d. Value of all final services produced in a country in a period of time.
2. GDP measures?
a. The value of all intermediate goods produced domestically within a given period.
b. The value of all final goods and services sold in an economy within a given period.
c. The value of all final goods and services produced domestically within a given period.
d. The government’s domestic product.
3. An example of an intermediate product is?
a. The purchase of tires by Ford Motor Company to put on its Ford Explorers.
b. The purchase of wood by a home construction firm.
c. The purchase of leather by a shoe manufacturer.
d. All of the above are examples of intermediate products.
4. Which of the following is not included in the calculated gross domestic product?
a. A new Ford Expedition sport-utility vehicle.
b. dinner at Burger King.
c. A construction firm’s purchase of lumber to build a four-bedroom home.
d. The purchase of a newly constructed home.
5. GDP is calculated including?
a. Intermediate products but not final products.
b. Manufactured goods but not services.
c. Final products but not intermediate products.
d. Only goods purchased by consumers in a given year.
6. The expenditure measure of GDP accounting adds together?
a. Consumption, interest, government purchases, and net exports.
b. Consumption, government purchases, wages and salaries, and net exports.
c. Consumption, investment, government purchases, and net exports.
d. Wages and salaries, rent, interest, and profits.
e. Wages and salaries, rent, investment, and profits.
7. Which category of consumption spending tends to be the most unstable over the business cycle?
a. Nondurable consumer goods.
b. Durable consumer goods.
c. Services.
d. All of these categories of consumer spending are highly unstable over the business cycle.
8. Which of the following are most likely to be classified by economists as consumer durable goods?
a. Stocks, bonds, EE savings bonds, CDs (certificates of deposit).
b. Automobiles, furniture, CD players.
c. Drugs, toys, magazines, books.
d. Food, clothing, shelter.