1. Why has Nominal GDP increased historically more rapidly than Real GDP in the United States?

because of deflation

because of statistical discrepancies

because of none of the above

because of inflation

because of high interest rates

2. In some rural regions of the United States, residents harvest much of their food supplies directly from nature by hunting, fishing, and gathering. With regard to these subsistence activities:

GDP will correctly estimate the true value of the nation's production of final goods and services.

GDP will overestimate the true value of the nation's production of final goods and services.

GDP will overestimate the true value of the nation's production of final goods and services only when the income approach is used.

GDP will underestimate the true value of the nation's production of final goods and services.

3. The underground economy includes:

both legal and illegal sources of unreported income.

both legal and illegal sources of reported income.

only illegal sources of reported income.

only illegal sources of unreported income.

4. Net exports are a ____ proportion of GDP and have recently been ____ for the United States.

large; positive

large; negative.

small; negative.

small; positive.

5. Which of the following is not considered "investment" in GDP accounting?

The purchase of 1000 shares of Microsoft stock.

The purchase of a tractor by XYZ company.

The accumulation of inventories in a shoe store's warehouse.

Building a new production factory.

6. The sum of the income received by the factors of production (CELL) in a country results in:

CPI

GDP

The GDP deflator

BEA

7. Which of the following is the best available measure of a country's standard of living?

Real GDP

Nominal GDP

CPI

GDP deflator

Real GDP per Capita

8. The "Balance of Payments" states that the sum of a nation's Current Account and Financial Account should equal:

GDP

$0

a positive dollar amount

a negative dollar amount

9. Which of the following is a credit ("money in") in the U.S. "Current Account?"

U.S. investors purchase U.S. government bonds.

A U.S. consumer buys a TV made in Malaysia.

Singapore Airlines buys a jumbo jet made in the United States.

An American citizen flies to Lithuania on the Lithuanian Airlines.

10. Which of the following would be included in the "Financial Account" section of the balance of payments?

net investment income

net transfers of money (gifts)

government bond purchases

imports and exports of goods