Chapter 11 Measuring a Nation’s Production and Income

| November 9, 2018

16)
Which of the following is an example of a consumption expenditure?
A)
the construction of a new public library
B)
the purchase of a ticket to a New Orleans Saints game
C)
the purchase of a new fire truck
D)
the salary paid to the mayor of Denver

17)
For the purpose of GDP accounting, consumption expenditures include
A)
only nondurable goods.
B)
only durable goods.
C)
both nondurable goods and services.
D)
durable goods, nondurable goods, and services.

18)
What is the fastest growing component of consumption in the United States?
A)
new home construction
B)
nondurable goods
C)
durable goods
D)
services

19)
What type of spending is the largest component of the GDP?
A)
consumption
B)
government purchases
C)
net exports
D)
investment

20)
Blu-ray disc players, iPhones, and hybrid cars are generally considered to be
________ goods.
A)
durable
B)
nondurable
C)
intermediate
D)
service

21)
Bananas, chocolate bars, chewing gum, orange juice and yogurt are considered to
be ________ goods.
A)
durable
B)
nondurable
C)
essential
D)
service

22)
Going to the dentist would be counted in GDP as
A)
crowns and fillings.
B)
insurance utilization.
C)
a service.
D)
a measure of welfare.

23)
Suppose that a sporting goods store had $800 of golf balls on its shelves at
the beginning of 2012 and $1,300 at the end of 2012. The amount of inventory
investment included in GDP would be
A)
$500.
B)
$800.
C)
$1,300.
D)
$2,100.

24)
Which of the following is NOT a component of private investment, for purposes
of GDP accounting?
A)
newly produced housing
B)
additions to firms’ stock of inventories
C)
purchases by firms of used machinery
D)
newly built factories

25)
Gross investment is
A)
what is left over from total new private investment after depreciation.
B)
the total amount of private investment purchases, whether new or previously
existing.
C)
the total amount of new private investment purchases.
D)
the wear and tear on private investment.

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