1.Which of the following is NOT included in U.S. GDP?

Multiple Choice

• toys produced by a U.S. firm located in China
• beer brewed in Colorado & purchased by a German tourist
• a car made by a Japanese auto producer in Kansas
• corn grown in Iowa and exported to Africa

2.Which of the following statements is true?

Multiple Choice

• Nominal GDP is a good measure of social welfare.
• GDP per capita is a complete measure of social welfare.
• Crime and pollution reduce social welfare which reduces GDP.
• GDP is not necessarily the best measure of social welfare.

3.Suppose during a year an economy produces $10 trillion of consumer goods, $4 trillion of investment goods, $6 trillion in government services, and has $4 trillion of exports and $5 trillion of imports. GDP would be

Multiple Choice

• $19 trillion.
• $21 trillion.
• $24 trillion.
• $29 trillion.

4.Which of the following is an example of investment, as a component of GDP?

Multiple Choice

• the purchase of a truck by a delivery company
• the purchase of Ford stock by an individual saving for retirement
• the purchase of land by an individual
• the purchase of bridges and dams by the government

5.Which of the following situations is sufficient to represent current demand for a car?

Multiple Choice

• You have plenty of money to buy it, but you can't decide if you want a motorcycle or a car.
• You have enough money to buy it and you are willing to spend the money on the car.
• You've decided you want a car and you can possibly borrow the money from a bank.
• You want to buy a motorcycle and a car and you'll have enough money for both in two years.

6.Which of the following is not a determinant of demand?

Multiple Choice

• income
• available technology
• the price of other goods
• expectations of income

7.A market shortage occurs when

Multiple Choice

• the quantity demanded is less than the quantity supplied at a given price.
• the market price is below equilibrium.
• sellers produce a lot of the product and consumers like it a lot.
• a new product is introduced at the equilibrium price.