Fourth Homework Assignment
ECON 272-5 (11:15)
Due at the beginning of class on Friday, Feb. 10
18 pts.
Directions: Copy this page into a word document and type your answers (answers not typed will not be graded). Use at least 10 pt. font. Leave the questions on your answer sheet - with space between questions/answers and questions/questions.
1. The government paid Bob $300 as interest on some government bonds (debt) that he is holding. Since government spending is part of GDP and the government "spent" this $300, is this transaction included in GDP or not? Explain your answer. (4 pts.)
For all multiple choice questions - you must type your answer or it will not count. For example, at the end of the question, type: answer: a or b or c, etc. Again, all answers not typed in your homework will not count. (2 pts. each)
2. Which of the following is Gross Domestic Product (GDP) calculated (over time) in constant prices?
a. Actual GDP
b. Potential GDP
c. Nominal GDP
d. Real GDP
e. None of the above
Answer:
3. In the circular flow diagram model, which of the following is true?
a. Households sell goods and services to business firms.
b. Households sell factors of production to business firms.
c. Business firms sell factors of production to households.
d. Business firms sell goods and services to households.
e. More than one answer is correct
Answer:
4. Which of the following is included in the calculation of U.S. gross domestic product (GDP) (assume all are done within the same year that GDP is calculated)?
a. The purchase of a used economics textbook from the bookstore
b. The purchase of new harvesting equipment for the farm
c. An apple purchased by Betty who makes apple pies to be sold in Betty's Bakery
d. A car produced in Germany but purchased in the U.S.
e. More than one answer is correct
Answer:
5. Which of the following would be an example of an intermediate good or service?
a. A calculator purchased by a college student for taking exams
b. Gasoline purchased by an insurance agent to visit clients at their homes
c. A house purchased by a family with four children
d. A car purchased by a student's parents and given to the student
e. None of the above are intermediate goods or services.
Answer:
6. Which of the following would be included in the calculation of gross domestic product?
a. Government purchase of a new submarine
b. Social Security payment to a retired military officer
c. The purchase of a home built 10 years ago
d. Contributions to the La Plata County Humane Society (a charity)
e. None of the above would be included
Answer:
7. Which of the following would be counted as investment when calculating gross domestic product?
a. The purchase of a used computer by an auto manufacturer
b. The purchase of a share of IBM stock by an employee of a company
c. The construction of a new building to be used by a business
d. The construction of roads by the government
e. None of the above would be included in Investment
Answer:
8. Which of the following defines socialism (according to economists)?
a. the capital goods are owned by the government
b. the consumer goods are owned by the government
c. the capital goods are owned by everyone
d. the capital goods are owned by individuals
e. none of the above
Answer: