6) “Final goods and services” are those that are A) produced outside the United States. B) used in the production of other goods and services. C) double counted in the calculation of GDP. D) sold to ultimate or final purchasers. 7) A rancher raises sheep. Once a year he shears them and sells the raw wool to a processor who cleans it and spins it into yarn. The yarn is then sold to a knitting mill which produces and sells sweaters. In calculating GDP we would count A) the raw wool the yarn and the sweaters. B) only the yarn and the sweaters. C) only the sweaters. D) only the raw wool and the yarn. 8) How does real gross domestic product (GDP) differ from nominal GDP? A) Nominal GDP controls for price changes while real GDP does not. B) Real GDP controls for price changes while nominal GDP does not. C) Nominal GDP can be used to directly compare the amount of output produced from year to year while real GDP cannot be used for such comparison. D) There is no difference between nominal GDP and real GDP. 9) When there are sustained increases in real GDP over time we say that the economy is undergoing A) economic stagnation. B) a recession. C) economic growth. D) massive changes in productive capacity. 10) The data presented in the text shows that in the period from 1930-2011 real GDP in the United States has A) increased substantially. B) decreased in every year since 1930. C) decreased only in recent years. D) generally remained the same. 11) Which prices are used to measure goods and services in calculating the nominal GDP? A) past years prices B) current prices C) average prices D) projected prices 12) Which of the following is NOT a component of gross domestic product? A) net exports B) government purchases C) purchases by consumers of used goods D) purchases by consumers of finished goods 13) How many broad categories are used by economists to define the GDP? A) 3 B) 4 C) 6 D) 8 14) The largest component of GDP is A) government spending. B) consumption expenditures. C) private investment expenditures. D) net exports. 15) Which of the following is NOT an example of a consumption expenditure? A) a digital camera you purchase to take on vacation B) a new county jail C) a motorcycle you purchase to ride on the weekends D) a restaurant meal
