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ECON 104 Goffe Final Questions, Answers, Rationales
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ECON 104 Goffe Final Questions, Answers, Rationales
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ECON 104 Goffe FinalStudy online at https://quizlet.com/_ek6t6g
1. True or False: The business cycle is the same thing as False
economic growth
2. Which of the following is the best example of capital? C. a ship used
A. a family buying a newly produced house to carry oil across
B. a shoe store adding to its inventories the ocean
C. a ship used to carry oil across the ocean
D. the production and sale of a new delivery van for
UPS
3. How are pollution and GDP related? B. the value of pro-
A. only the harm from pollution is included in GDP duced goods that
B. the value of produced goods that lead to pollution lead to pollution
are counted in GDP and pollution is not counted are counted in
C. goods whose production creates pollution are not GDP and pollution
counted in GDP is not counted
4. GDP has various shortcomings in measuring well-be- D. the produc-
ing. Which of the following is not one of these? tion of intermedi-
A. the value of leisure ate goods
B. the harm from pollution
C. the cost of crime and other social problems
D. the production of intermediate goods
5. True or False: When we look at real GDP since 1970 False
or so, we see that recessions are evenly spaced over
the years.
6. Which of the following would not be in real GDP when D. the production
measured by production? of steel that is in
A. a car produced by GM & sold in New York turn used to make
B. the government purchasing a new truck a car
C. a pencil manufactured in the U.S. that is sold in
Japan
D. the production of steel that is in turn used to make
a car
7. Which of the following is an example of an intermedi-
ate good as counted in GDP?
, ECON 104 Goffe Final
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A. a drill used by a professional carpenter C. lumber used in
B. a computer owned by Amazon that processes or- the construction of
ders a new home
C. lumber used in the construction of a new home
D. a delivery truck owned by FedEx
8. Which of the following is the least likely to be invest- B. a household
ment? saving for retire-
A. a household buying a new house ment
B. a household saving for retirement
C. GM building a new factory
D. a car dealer adding to its cars on hand
9. When you calculate GDP you need C. both the prices
A. the prices of goods and services and quantities of
B. the amount of goods and services produced produced goods
C. both the prices and quantities of produced goods and services
and services
D. none of the above
10. If you computed nominal GDP every year over a C. neither prices
decade, which is fixed or held constant over these nor quantities
years?
A. prices
B. quantities
C. neither prices nor quantities
11. Which is NOT part of the definition of capital, as used C. is used
by economists? It ___. up in production-
A. must be manufactured Which of the fol-
B. is used by firms lowing would not
C. is used up in production be in this quarter's
D. produces other goods and services real GDP?
12. Which of the following would not be in this quarter's B. a used truck
real GDP? that was sold to a
A. a new house that sold today business
B. a used truck that was sold to a business
C. a bookstore adding to books in its warehouse
, ECON 104 Goffe Final
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D. a book manufactured in the U.S. and then sold in
Mexico
13. Which of the following is not part of GDP? D. businesses
A. purchases of new goods by households paying bribes to
B. firms buying new machines government offi-
C. the government buying new schools cials
D. businesses paying bribes to government officials
14. Which of the following is NOT an example of invest- C. you paying your
ment? tuition at Penn
A. McDonalds building a new restaurant State
B. Amazon adding books for consumers in its ware-
houses
C. you paying your tuition at Penn State
D. your parents purchasing a new house
15. If there is more production of final goods in the econ- C. will rise
omy, then income ___.
A. will fall
B. might fall
C. will rise
D. might rise
16. ___ GDP is used to track the economy since it ___ C. Real, does
correct for the impact of inflation (rising prices).
A. Nominal, does
B. Nominal, does not
C. Real, does
D. Real, does not
17. True or False: When we measure GDP by income, False
production, or spending, one is certain to be larger
than the others
18. The current value of real GDP is D. more than $18
A. less than $10 trillion trillion
B. between $10 trillion and $14 trillion
C. between $14 trillion and $18 trillion
D. more than $18 trillion
, ECON 104 Goffe Final
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19. Transfer payments ___ counted in GDP. Also, they D. are not, are not
___ a payment for a good or service the government
received.
A. are, are
B. are, are not
C. are not, are
D. are not, are not
20. True or False: Capital goods are final goods, but their False
production is NOT part of GDP.
21. If nominal GDP is growing more quickly than real A. rising prices
GDP, which is most likely?
A. rising prices
B. falling prices
C. an expansion
D. a recession
22. Which of the following would NOT be investment? D. a household
A. a baking company buying a new oven buying stock in a
B. a car dealership adding to the number of cars it has company
to sell to its customers
C. a just-completed home is sold to a household
D. a household buying stock in a company
23. Say that after graduation you live in Manhattan and C. rise
you walk to work. Then, you got a raise and you take
a taxi most days. As a result, GDP would most likely
___.
A. fall
B. be unchanged
C. rise
24. Which is largest in an advanced economy like the D. the previous
U.S.? three have the
A. GDP measured by income same value
B. GDP measured by spending
C. GDP measured by production
D. the previous three have the same value
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