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Principles of Macroeconomics, 9e - TB1 (Case/Fair/Oster)
Chapter 6

Measuring National Output and National Income
6.1

Gross Domestic Product
1

Multiple Choice
1)
The total market value of all final goods and services produced within a given period by factors of
production located within a country is
A)

gross domestic product.
B)
gross national product.
C)

net national product.
D)

net national income.
Answer:

A

Diff: 1
Topic:

Gross Domestic Product
Skill:

Definition

2)
1

Gross domestic product measures
A)

the total spending of everyone in the economy.
B)
the value of all output in the economy.
C)

the total income of everyone in the economy.
D)

all of the above
Answer:

D

Diff: 2
Topic:

Gross Domestic Product
Skill:

Definition

3)
Which of the following is an example of a final good or service?
A)

wheat a bakery purchases to make bread
B)
coffee beans Starbucks purchases to make coffee
C)

lumber purchased by a construction company to used in building houses
D)

a computer purchased by Federal Express to track shipments
Answer:

D
Diff: 2

2

Topic:

Gross Domestic Product
Skill:

Conceptual

AACSB:

Reflective Thinking

4)
Which of the following is a good or service counted in GDP?
A)

tires Ford buys to put on a car
B)
a used tire you buy for your personal car
C)

a new tire you buy for your personal car
D)

used tires bought by a used car dealer to put on a car on his lot
Answer:

C

Diff: 2
Topic:

Gross Domestic Product
Skill:

Conceptual
AACSB:

Reflective Thinking

3

5)
Which of the following is an example of an intermediate good?
A)

the dough you buy to fix yourself a pizza for dinner
B)
the chocolate you buy to make yourself some cookies
C)

the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to
D)

lumber you buy to build a house for your dog
Answer:

C

Diff: 2
Topic:

Gross Domestic Product
Skill:

Conceptual
AACSB:

Reflective Thinking

6)
Double counting can be avoided by
A)

including the value of intermediate goods in the current year.
B)
not counting the value of intermediate goods in GDP.
C)

including the value of intermediate goods in the GNP but not in the GDP.
D)

4

including the value of intermediate goods in the production year but not in the selling year of those
goods.
Answer:

B

Diff: 2
Topic:

Gross Domestic Product
Skill:

Conceptual
AACSB:

Reflective Thinking

7)
Which of the following would NOT be counted in 2007's GDP?
A)

the value of a 2005 boat you ...
Principles of Macroeconomics, 9e - TB1 (Case/Fair/Oster)
Chapter 6
Measuring National Output and National Income
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1
Multiple Choice
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Topic:
Gross Domestic Product
Skill:
Denition
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