1. GDP is:

a. the sum of all currency and coins in circulation.

b. the value of all final goods and services produced by a government.

c. the value of all final good and services produced anywhere in the world by a nation's firms.

d. the value of all final goods and services produced domestically.

2. The demand measure of GDP accounting adds together:

a. wages and salaries, rent, interest, and profit.

b. consumption, investment, government purchases, and trade balance.

c. consumption, government purchases, wages and salaries, and trade balance.

d. consumption, interest, government purchases, and trade balance.

3. Consumption is the purchase of goods and services by:

a. business firms.

b. government.

c. households

d. foreign buyers.

4. In order to avoid double counting, statisticians just count the __________________.

a. final inventories

b. intermediate goods and services

c. final goods and services

d. durable goods and nondurable goods

5. Which of the following is included in the calculated Gross Domestic Product?

a. Farmer Freddie sells his second tractor to his son.

b. Suzanne buys a love seat and chair for $85 at the yard sale on the corner.

c. A local ice cream store sells $17,000 worth of cones and sundaes on July 1.

d. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle.

6. Which of the following is not counted as a part of GDP?

a. the purchase of 100 shares of AT&T stock by your grandfather.

b. the purchase of a snow plough by the city of Minneapolis.

c. the unsold additions to inventory at an appliances store

d. the purchase of a loaf of bread by a consumer

7.GDP does not directly include:

a. the value of goods produced domestically and sold abroad.

b. the value of final goods and services produced, but not sold, during a period.

c. the value of services rendered during a period.

d. the value of intermediate goods sold during a period.

8. Investment (I) includes:

a. the amount spent on new factories and machinery

b. the amount spent on stocks and bonds.

c. the amount spent on consumer goods that last more than one year.

d. the amount spent on purchases of art.

9. A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are:

a. trough, expansion, recession, peak

b. contraction, recession, expansion, boom

c. expansion, trough, recession, peak

d. expansion, peak, recession, trough

10. If imports exceed exports, as in recent years, then __________ exists.

a. a trade surplus

b. a trade imbalance

c. a trade deficit

d. trade disequilibrium