Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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The production of an Intel factory in Ireland
a. | counts in the U.S. GDP. | b. | counts in the Irish GDP. | c. | counts in both
GDPs. | d. | is subtracted from Intel's U.S. production for U.S.GDP
calculations. |
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2.
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Net exports are
a. | exports divided by population. | b. | exports minus marginal
product. | c. | exports minus imports. | d. | exports minus
debt. |
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3.
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GDP stands for
a. | gross domestic price. | b. | general domestic product. | c. | gross detailed
product. | d. | gross domestic product. |
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4.
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Which of the following does not count as personal consumption?
a. | Gambling losses. | b. | Spending on education. | c. | Bequests to a
hospital. | d. | Tax payments. |
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5.
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When companies reduce their inventories,
a. | the amount of the change gets added to the GDP. | b. | the amount of the
change gets subtracted from the GDP. | c. | the amount of the change has no effect on the
GDP. | d. | net exports go up. |
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6.
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Imports enter the GDP
a. | with a positive sign. | b. | with a negative sign. | c. | as an addition to
changes in private inventories. | d. | as a subtraction from
consumption. |
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7.
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Which of the following is the correct formula for net exports?
a. | Net exports = Imports - Exports. | b. | Net exports = Exports -
Imports. | c. | Net exports = Imports + Exports. | d. | Net exports = (- Imports) + (-
Exports). |
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8.
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Official GDP numbers do not include the activity of the __________ economy,
which includes illegal activities and off-the-book transactions.
a. | underground | b. | barter | c. | unofficial | d. | laissez-faire |
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9.
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Government employment (excluding wartime employment) peaked during the
a. | 1980s. | b. | 1930s. | c. | 1960s. | d. | 1970s. |
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10.
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Rent-seeking behavior means
a. | companies try to increase profit by cutting costs or improving
products. | b. | companies spend money on influencing government rather than on profit-increasing
strategies. | c. | consumer real estate studies that focus on renting versus buying. | d. | a transfer of
knowledge between private and public sectors. |
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