Microeconomics Practice

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1)
Which of the following most correctly describes GDP? GDP is the sum of the market value of all A)
goods and services purchased within a country in a given time period. B)
final goods and services produced within a country in a given time period. C)
final goods and services purchased within a country in a given time period. D)
intermediate goods and services produced within a country in a given time period. E)
final goods and services produced by a country's citizens no matter where they are located in a given time period.

2)
Of the following, which best describes how GDP is computed?
A)
by adding the market value of everything produced
B)
by adding the market value of all final goods and services
C)
by asking all households what they produced during the current year D)
by multiplying the total number of hours worked by the average wage rate E)
by surveying households on what they purchased during the current year

8)
If you make dinner for yourself
A)
the market value of your dinner is added to GDP.
B)
your service in preparing the meal is valued at a cook's wage and added to GDP. C)
none of what you bought to prepare for dinner is included in GDP. D)
only the market value of ingredients that you purchased this year is added to GDP. E)
the difference between the cost of the ingredients that you purchased this year and the market value of the dinner is added to GDP.

4)
Honda has an assembly plant for Civics in Ohio. The production of U.S.-made Civics is A)
added to U.S. GDP.
B)
added to Japan's GDP because Honda is a Japanese company.
C)
not included in either the U.S. or Japanese GDP.
D)
added to U.S. GDP only if the Civic is sold in the United States in the year it is produced. E)
added to both U.S. GDP, because the car is produced in the United States, and to Japan's GDP, because Honda is a Japanese company.

5)
Which of the following is included in Germany's GDP?
i.BMWs produced in a German owned factory in South Carolina ii.the value of the stocks sold on the German stock exchange, the Frankfurt Stock Exchange iii.china produced by the English owned Wedgewood Company at a factory in Berlin, Germany A)

i only.
B)
ii only.
C)
iii only.
D)
i and ii.
E)
i and iii.

6)
The measurement of GDP makes a distinction between
A)
goods and services, including goods and excluding services.
B)
final goods and services and intermediate goods and services, so that GDP includes intermediate goods and services but excludes final goods and services. C)
goods and services, including services but excluding goods.
D)
final goods and services and intermediate goods and services, so that GDP includes final goods and services but excludes intermediate goods and services. E)
durable goods and nondurable goods so that GDP includes only durable goods.

7)
To calculate GDP, we use the market value of
A)
only final goods and services.
B)
only intermediate goods and services.
C)
both final goods and services and intermediate goods and services. D)
final goods and services or intermediate goods and services because it does not matter which we use. E)
only final goods because services are not durable enough to include in GDP. A

8)
Which of the following would NOT be directly included in the U.S. GDP in 2006? A)
the market value of restaurant meals sold in 2006
B)
the market value of the computer chips produced in 2006 and used by Dell in their latest personal computer C)
the value of the automobiles produced in 2006 at the Toyota plant located in Georgetown, KY D)
legal services provided to first time home buyers during 2006 E)
the...
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