ECO 285 – Macroeconomics
Dr. D. Foster – Fall 2015
Homework #3 Quiz
20 true/false [This is an individual assignment – do your own work.]
1. The concept of the GDP was developed by Simon Kuznets in the late 1890s.
2. The notion of a “final good and service” means that finally a consumer or a business can use that
good or service.
3. As a general rule of thumb, two consecutive quarters of declining real GDP constitutes a recession.
4. The largest component of GDP is government spending.
5. Non-market outputs are sometimes included in GDP, for example the value of goods and services
provided by non-profit organizations free of charge.
6. If you knit a sweater and sell it on eBay it will count as part of GDP, but if you knit a sweater for
yourself it will not count.
7. The second estimate of second quarter 2015 real GDP growth was +3.7%, at an annual rate.
8. According to some measures of GDP, India ranks in the top 5 countries.
9. The increase in real GDP in the second quarter of 2015 reflects mostly a surge in imports.
10. The smallest national economy in the world is Tuvalu.
11. As mentioned in the essay by Doug French, it was Murray Rothbard who created a system of
national accounts that we use today to measure our economic health and well-being.
12. As noted on the Mises Wiki, when banks decide to offer free checking, it counts as zero value in the
measured GDP.
13. From the chart showing “Real Gross Domestic Private Product, 2000-2012,” we can see that the top
three years over this span were 2012, 2011 and 2007.
14. As noted in the Mises Wiki, Simon Kuznets believed that GDP was an excellent measure of the
welfare of a country.
15. As pointed out by Batemarco, because government output is generally not sold on the market, we
cannot really accurately measure its value.
16. Beachy and Zorn argue that we should be quite suspicious of GDP data by noting that the huge oil
spill in the Gulf of Mexico may well translate into a higher GDP for the U.S.
17. The National Welfare Index (NWI) seeks to generate a better measure of our welfare than does GDP
by subtracting out both environmental damage and the value of voluntary work.
18. The G5 measure of a country’s general welfare and sustainability has the advantage of being able to
accurately measure the value of all the variables that make it up.
19. Mark Skousen notes that his alternative measure of economic production – Gross Output – is now
quite similar to a new measure coming out of the Bureau of Economic Analysis called Gross Domestic
Expenditures.
20. It can be confidently stated that Gross Domestic Expenditures will always be larger than GDP.
Name:
ECO 285 – Macroeconomics
Dr. D. Foster – Fall 2015
Homework #3 Quiz
Please use the following to record your answers and copy it in with your homework:
Quiz #3
1
6
11
16
2
7
12
17
3
8
13
18
4
9
14
19
5
10
15
20
100 word summary of either Stossel Chapter 5 or Chapter 6:
Word count =
100-150 word reaction essay to the other chapter of Stossel than you summarized (i.e., C6 or C5):
Word count =