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GDP: A Measure of Total
Production and Income
21
CLICKER QUESTIONS
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Checkpoint 21.1
Checkpoint 21.2
Appendix Checkpoint
Question 1
Question 5
Question A1
Question 2
Question 6
Question A2
Question 3
Question 7
Question A3
Question 4
Checkpoint 21.3
Question 8
Question 9
Question 10
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CHECKPOINT 21.1
Question 1
Which of the following goods is not a final good?
A.
B.
C.
D.
E.
Flour used by the baker to make cup cakes.
Bread eaten by a family for lunch.
Pencils used by a 6th grader in class.
Nike shoes used by a basketball player.
A computer used by Intel to design new computer chips.
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CHECKPOINT 21.1
Question 2
Investment includes ________.
A.
B.
C.
D.
E.
the purchase of a stock or bond
an increase in financial capital
what consumers do with their savings
the purchase of new capital goods by firms
spending on capital goods by governments
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CHECKPOINT 21.1
Question 3
GDP is equal to the ____ value of ____ goods and services
produced within a country in a given period of time.
A.
B.
C.
D.
E.
production; all
market; all final
wholesale; all intermediate
retail; all
market; all
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CHECKPOINT 21.1
Question 4
In 2012, one firm increases its production by $9 million and
its sales increases by $8 million. With other things remaining
the same, in 2010 ________.
A. GDP increases by $8 million, and inventory investment
decreases by $1 million
B. GDP increases by $9 million, and inventory investment
increases by $1 million
C. inventory investment decreases by $1 million
D. GDP increases by $8 million, and investment increases
by $1 million
E. GDP increases by $17 million
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CHECKPOINT 21.2
Question 5
Using the expenditure approach, GDP is the sum of _____.
A. wages, interest, rent, and profit
B. all industry production
C. the value of all final and intermediate goods and
services.
D. consumption expenditure, investment, government
expenditure on goods and services, and net exports
E. consumption expenditure, investment, government
expenditure, and the change in financial assets
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CHECKPOINT 21.2
Question 6
The income approach to measuring GDP does not include
______.
A.
B.
C.
D.
E.
wages paid workers
rent received by landlords
interest earned by savers
income taxes paid by persons
profit made by firms
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CHECKPOINT 21.2
Question 7
The difference between nominal GDP and real GDP is ___.
A. the indirect taxes used in their calculations
B. the prices used in their calculations
C. that nominal GDP includes the depreciation of capital
and real GDP does not
D. that nominal GDP includes net exports and real GDP
does not
E. that real GDP includes the depreciation of capital and
nominal GDP does not
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CHECKPOINT 21.3
Question 8
Real GDP ____ potential GDP when the economy ____ of
the business cycle.
A.
B.
C.
D.
is less than; is at the peak
exceeds; is in a recession and near to the trough
is less than; begins an expansion phase
exceeds; leaves the trough and an expansion phase
starts
E. equals; is in the expansion phase
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CHECKPOINT 21.3
Question 9
You hire some friends to help you move to a new house. You
pay them $200 and buy them dinner at Pizza Hut.
A. The $200 should be counted as part of GDP but not the
dinner
B. If your friends do not declare the $200 as taxable
income, it becomes part of the underground economy.
C. The dinner is counted as part of GDP but the $200
should not be.
D. The $200 paid to friends should not be counted in GDP.
E. Both the $200 and the dinner should be counted in GDP
because they are part of household production.
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CHECKPOINT 21.3
Question 10
The value of leisure time is ________.
A. included in GDP and, in recent years, has become an
increasing large part of GDP
B. personal and has no economic value
C. excluded from GDP
D. directly included in GDP but, in recent years, has
become a decreasing large part of GDP
E. directly included in GDP and, in recent years, has not
changed much as a fraction of GDP
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APPENDIX CHECKPOINT
Question A1
Real GDP measures the value of goods and services
produced in a given year valued using ________.
A.
B.
C.
D.
E.
base year prices
prices of that same year
no prices
future prices
government-approved prices
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APPENDIX CHECKPOINT
Question A2
In a country using prices of 2010, GDP in 2010 was $100,
and GDP in 2011 was $110. Using prices of 2011, GDP in
2010 was $200, and GDP in 2011 was $210. The country’s
BEA will report that real GDP grew by ______ in 2011 .
A. 10 percent
B. 5 percent
C. 15 percent
D. 7.5 percent
E. more than 20 percent
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APPENDIX CHECKPOINT
Question A3
In the base year 2009, real GDP was $10 trillion. Using 2009
prices, GDP in 2010 grew by 10 percent; using 2011 prices,
GDP in 2010 grew by 8 percent. To link to the base year, the
BEA will use ____ percent as the growth in real GDP in
2010 and report real GDP in 2010 as _______.
A.
B.
C.
D.
E.
10; $11 trillion
8; $11 trillion
2; $10.2 trillion
18; $11.8 trillion
9; $10.9 trillion
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