Measurement and Structure of the National Economy Test Questions
Chapter 2
The Measurement and Structure of the National Economy
T Multiple Choice Questions
1.
The three approaches to measuring economic activity are the
(a) cost, income, and expenditure approaches.
(b) product, income, and expenditure approaches.
(c) consumer, business, and government approaches.
(d) private, public, and international approaches.
Answer: B
Level of difficulty: 1
Section: 2.1
2.
The value of a producer’s output minus the value of the inputs it purchases from other producers is called the producer’s
(a) surplus.
(b) profit.
(c) value added.
(d) gross product.
Answer: C
Level of difficulty: 2
Section: 2.1
3.
The Bigdrill company drills for oil, which it sells for $200 million to the Bigoil company to be made into gas. The Bigoil company’s gas is sold for a total of $600 million. What is the total contribution to the country’s GDP from companies Bigdrill and Bigoil?
(a) $200 million
(b) $400 million
(c) $600 million
(d) $800 million
Answer: C
Level of difficulty: 2
Section: 2.1
Chapter 2
The Measurement and Structure of the National Economy
15
4.
Sam’s Semiconductors produces computer chips, which it sells for $10 million to Carl’s Computer
Company (CCC). CCC’s computers are sold for a total of $16 million. What is the value added to
CCC?
(a) $6 million
(b) $10 million
(c) $16 million
(d) $26 million
Answer: A
Level of difficulty: 1
Section: 2.1
5.
The Compagnie Naturelle sells mounted butterflies, using butterfly bait it buys from another firm for
$20,000. It pays its workers $35,000, pays $1000 in taxes, and has profits of $3,000. What is its value added?
(a) $3000
(b) $19,000
(c) $39,000
(d) $59,000
Answer: C
Level of difficulty: 2
Section: 2.1
6.
To ensure that the fundamental identity of national income accounting holds, changes in inventories are
(a) treated as part of expenditure.
(b) treated as part of saving.
(c) ignored.
(d) counted as
The Measurement and Structure of the National Economy
T Multiple Choice Questions
1.
The three approaches to measuring economic activity are the
(a) cost, income, and expenditure approaches.
(b) product, income, and expenditure approaches.
(c) consumer, business, and government approaches.
(d) private, public, and international approaches.
Answer: B
Level of difficulty: 1
Section: 2.1
2.
The value of a producer’s output minus the value of the inputs it purchases from other producers is called the producer’s
(a) surplus.
(b) profit.
(c) value added.
(d) gross product.
Answer: C
Level of difficulty: 2
Section: 2.1
3.
The Bigdrill company drills for oil, which it sells for $200 million to the Bigoil company to be made into gas. The Bigoil company’s gas is sold for a total of $600 million. What is the total contribution to the country’s GDP from companies Bigdrill and Bigoil?
(a) $200 million
(b) $400 million
(c) $600 million
(d) $800 million
Answer: C
Level of difficulty: 2
Section: 2.1
Chapter 2
The Measurement and Structure of the National Economy
15
4.
Sam’s Semiconductors produces computer chips, which it sells for $10 million to Carl’s Computer
Company (CCC). CCC’s computers are sold for a total of $16 million. What is the value added to
CCC?
(a) $6 million
(b) $10 million
(c) $16 million
(d) $26 million
Answer: A
Level of difficulty: 1
Section: 2.1
5.
The Compagnie Naturelle sells mounted butterflies, using butterfly bait it buys from another firm for
$20,000. It pays its workers $35,000, pays $1000 in taxes, and has profits of $3,000. What is its value added?
(a) $3000
(b) $19,000
(c) $39,000
(d) $59,000
Answer: C
Level of difficulty: 2
Section: 2.1
6.
To ensure that the fundamental identity of national income accounting holds, changes in inventories are
(a) treated as part of expenditure.
(b) treated as part of saving.
(c) ignored.
(d) counted as