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INTERNATIONAL ECONOMICS: THEORY AND POLICY, 11E
(KRUGMAN ET AL.) QUESTIONS AND CORRECT ANSWERS
2024-2025|100% PASS
CHAPTERS 13-19 REVEL PRACTICE QUESTIONS
International Economics: Theory and Policy, 11e (Krugman et al.)
Chapter 13 National Income Accounting and the Balance of Payments
13.1 The National Income Accounts
1) A country's gross national product (GNP) is
A) the value of all final goods and services produced by its factors of production and sold on the
market in a given time period.
B) the value of all intermediate goods and services produced by its factors of production and sold
on the market in a given time period.
, lOMoAR cPSD| 37668344
C) the value of all final goods produced by its factors of production and sold on the market in a
given time period.
D) the value of all final goods and services produced by its factors of production and sold on the
market.
E) the value of all final goods and services produced by its factors of production, excluding land,
and sold on the market in a given time period.
Answer: A
Page Ref: 323
Difficulty: Easy
2) For most macroeconomists
A) national income accounts is much more important than national output accounts.
B) it is impossible to tell whether national income accounts equal to national output accounts.
C) national output accounts exceed national income accounts.
D) national income accounts exceed national output accounts.
E) national income accounts and national output accounts are equal to each other.
Answer: E
Page Ref: 323-325
Difficulty: Easy
3) For most macroeconomists
A) gross national income exceeds gross national product.
B) it is hard to tell whether gross national income equals gross national product.
C) gross national product exceeds gross national income.
D) gross national product is much more important than gross national income.
E) gross national income and gross national product are the same.
Answer: E
Page Ref: 323-325
Difficulty: Easy
, lOMoAR cPSD| 37668344
4) The largest component of GNP is
A) the current account.
B) investment.
C) government purchases.
D) consumption.
E) trade.
Answer: D
Page Ref: 326
Difficulty: Easy
5) An example of how GNP accounts for services provided by foreign-owned capital (and GDP
does not) is
A) earnings of a Spanish factory with British owners counts only in Spain's GDP.
B) earnings of a Spanish factory with British owners counts only in Britain's GNP.
C) earnings of a Spanish factory counts in Spain's GNP but are part of Britain's GDP.
D) earnings of a Spanish factory counts in Spain's GDP but are part of Britain's GNP.
E) earnings of a Spanish factory counts in Spain's GNP but not in Britain's GDP or GNP.
Answer: D
Page Ref: 326
Difficulty: Easy
6) The sale of
A) a used textbook does enter GNP.
B) a used textbook does not enter GNP, but the sale of a used house does.
C) both a used textbook and a used house do not enter GNP.
D) a used house does not enter GNP, but the sale of a used book does.
E) the GNP does not include sale of used items priced below $1000.
Answer: C
Page Ref: 325
Difficulty: Easy
7) Which one of the following statements is the MOST accurate?
A) The sale of a used textbook does generate income for factors of production.
B) The sale of a used textbook does not generate income for any factor of production.
C) The sale of a used textbook sometimes does and sometimes does not generate income for
factors of production.
D) It is hard to tell whether a sale of a used textbook does or does not generate income for factors
of production.
E) The sale of a used textbook is a part of the GNP.
Answer: B
Page Ref: 325
Difficulty: Easy
8) Which one of the following statements is the MOST accurate?
A) GNP plus depreciation is called net national product (NNP).
B) GNP less depreciation is called net national product (NNP).
C) GNP less depreciation is called net factor product (NFP).
D) GDP plus depreciation is called net national product (NNP).
E) GDP less depreciation is called net national product (NNP).
Answer: B
Page Ref: 325
Difficulty: Easy
9) National income equals GNP
A) less depreciation, less net unilateral transfers.
B) less depreciation or net unilateral transfers.
C) plus depreciation, less net unilateral transfers.
D) plus depreciation, plus net unilateral transfers.
E) less depreciation, plus net unilateral transfers.
Answer: E
Page Ref: 325
Difficulty: Easy
10) The United States began to report its gross domestic product (GDP) only since
A) 1900.
B) 1921.
C) 1931.
D) 1941.
E) 1991.
Answer: E
Page Ref: 325
Difficulty: Easy
11) GDP is supposed to measure
A) the volume of production within a country's borders.
B) the volume of services generated within a country's borders.
C) the volume of production of a country's output.
D) GNP plus depreciation.
E) net unilateral transfers from foreigners.
Answer: A
Page Ref: 325
Difficulty: Easy
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