Which of the following would not be included in the calculation of GDP?

Which of the following would not be included in the calculation of GDP?
 a. Vegetables grown and consumed by a nonfarm family
  b. The purchase of a new Porsche
  c. The sale of meat at the local grocery store
  d. The government purchase of an F-14 fighter plane
  e. The payment made to an accountant for the preparation of tax forms

Question 2

Productive activity in the underground economy:
 a. results in an overstatement of actual income and production in the national accounting system.
  b. consists of unrecorded cash transactions.
  c. is estimated and included in the national income accounting system.
  d. poses no problem for the measurement of gross domestic product.
  e. does not affect GDP but is included in the value-added computations.

Question 3

Which of the following must be included in the calculation of GDP?
 a. The sale of a used car to an auto dealer
  b. Bartering lawn care services for car washes
  c. A father staying at home to attend to his child
  d. The sale of an illegal cable box
  e. Payment made for a SAT preparation class

Question 4

Which of the following would be included in the calculation of the GDP for the year 2010?
 a. Purchase of a 2004 model Volkswagen sedan in 2010
  b. Swapping of baseball cards among two college students
  c. Car repairs done by a person
  d. Fresh lemonade sold at a local diner
  e. A lamp sold at a garage sale

Question 5

Identify the correct statement.
 a. National income accounting measures only the flow of output between different sectors of an economy.
  b. National income accounting summarizes the level of production in an economy over a decade.
  c. National income accounting explains diagrammatically the flow of goods and services and of money expenditures (income).
  d. National income accounting summarizes and categorizes the productive activity in an economy over a year.
  e. National income accounting measures the total money supply in an economy.

Question 6

National income accounting can best be characterized as:
 a. a set of rules used to summarize economic activity over a given period of time.
  b. a method for comparing different political systems.
  c. a microeconomic model of the economy used by the Federal Reserve bank.
  d. a statistical measure of the income received by consumers as opposed to businesses.
  e. a standardized economic report authored by politicians.

Question 7

The national income accounting system provides a measure of:
 a. only the total amount of profits made by business firms.
  b. the total value of all inputs used in production.
  c. the government budget surplus and deficit.
  d. the net exports of a nation.
  e. the output of an entire economy.

Question 8

Cartels:
 a. encourage competition.
  b. attempt to restrict output in order to raise prices.
  c. rely on legally enforceable contracts between cartel participants.
  d. rely on advertising and packaging to increase profits.
  e. All of the above.

Question 9

Price discrimination results in _____________ than would be observed under a single-price monopoly.
 a. higher output and lower costs
  b. lower output and higher costs
  c. higher output and higher costs
  d. lower output and lower costs

Question 10

Economic theory predicts that a profit maximizing car rental agency with some market power would set its prices in what way?
 a. Charge the same for both weekday and weekend rentals.
  b. Charge more for weekend rentals and less for weekday rentals.
  c. Charge more for rentals during the week and less for weekend rentals.

Question 11

In defining the ____ from the railroad industry, economic historians measure the extra real GNP that can be attributed to this innovation.
 a. profits
  b. social savings
  c. wage income
  d. balance of trade

Question 12

The greatest advantage of the railroad over earlier forms of transportation was its speed and its ability to stay open throughout most of the winter. Robert Fogel attempted to measure the advantage of faster all-weather transport by examining:
 a. profits in transportation industries as a group.
  b. profits in railroads compared with canals.
  c. employment of labor and capital in the transportation sector before and after the railroad.
  d. inventories of agricultural products held in eastern markets.