Chapter 12

Question 1

The value of a nation’s exports minus the value of its imports is called

minus exports
differential exports
gross exports
net exports

Answer 1

net exports

Question 2

Government transfer payments increase
Student sells used CDs to a record store
Car owner pays auto repair shop to fix his car

Answer 2

no change
no change
increase GDP

Question 3

When Russian buyers decide not to buy U.S. meat products from animals who consume feed with certain ingredients (all else held constant), what happens?

Us net exports rise
Us exports rise
Us imports falls
Us GDP falls

Answer 3

Us GDP falls

Question 4

Which of the following would increase US GDP?

production from a foreign-owned factory located in Kentucky
an increase in sales at garage sales
production from an American-owned factory located in Canada
a foreign-made good purchased by an American citizen

Answer 4

production from a foreign-owned factory located in Kentucky

Question 5

Which of the following is considered a contributing factor to economic growth?

rapid technological change
and investment in new capital goods
discovery of new coal mines in the country
all choices

Answer 5

all choices

Question 6

GDP adjusted for changes in prices is called

real GDP
corrected GDP
nominal GDP
price GDP

Answer 6

real GDP

Question 7

As used in the context of GDP calculation, investment would include

business spending on financial capital, stocks, and bonds
government spending on infrastructure
business spending on physical capital, new homes, and inventories
consumer spending on stocks, bonds, and savings accounts

Answer 7

business spending on physical capital, new homes, and inventories

Question 8

The aggregate supply curve is shaped as…

Answer 8

upwards sloping