Question : 41) Kelly’s Surf Shop orders 5,000 new surf boards at : 1240872

41) Kelly’s Surf Shop orders 5,000 new surf boards at the beginning of the year but only sells 4,500 by the end of the year. How are the 500 unsold surfboards accounted for in Gross Domestic Product? 

A) They will be included in the nondurable consumption category of GDP.

B) They will be included in the residential investment category of GDP.

C) They will be included in the government spending category of GDP.

D) They will be included in the inventory investment category of GDP.

E) They will be included in the durable consumption category of GDP.

42) When measuring GDP,

A) the government sector is not included because it is the public sector not the private sector.

B) the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue.

C) only the federal government’s expenditure on goods and services are included.

D) the expenditure on goods and services by all levels of government are included.

E) the government sector is not counted because it does not produce goods and services.

43) Government expenditures on goods and services include

i.the New York City Library’s purchase of new books.

ii.Washington D.C.’s purchase of gas for its city buses.

iii.California’s payment of wages to prison guards.

A) i and ii

B) i and iii

C) ii and iii

D) i, ii and iii

E) i only

44) Net exports of goods and services is equal to the value of

A) exports plus the value of imports.

B) imports minus the value of exports.

C) domestic consumption minus the value of imports.

D) exports minus the value of imports.

E) domestic consumption minus the value of exports.

45) Net exports of goods and services are defined as the

A) value of the goods we sell to foreigners.

B) income we receive from selling goods to foreigners.

C) value of exports minus the value of imports.

D) value of exports minus the income we receive from foreigners.

E) value of exports plus the income we receive from foreigners.

46) U.S. net exports include

A) sales of Hollywood movies to the rest of the world.

B) the production of Ford Mustangs in China that are sold in China.

C) Honda automobiles produced and sold in Japan.

D) the sale of shares of Nike stock on the New York Stock Exchange.

E) the sale of U.S. government securities to U.S. citizens.

47) In calculating GDP, we must

A) add the market value of imports and subtract the market value of exports.

B) add the market value of exports and subtract the market value of imports.

C) exclude net exports of goods and services (NX).

D) add the value of the goods produced outside of the United States by American firms.

E) subtract the market value of imports, because these goods are produced in a country other than the United States, and subtract the market value of exports, because these goods are consumed in a country other than the United States.

48) Which of the following expenditure components of GDP can be negative or positive?

A) Consumption expenditure

B) Investment

C) Government expenditure on goods and services

D) Net exports of goods and services

E) None of the above because expenditure can never be negative.

49) Last year U.S. net exports of goods and services was negative. This fact means that last year

A) there was an error made when calculating net exports of goods and services for the United States.

B) the value of U.S. exports was greater than the value of U.S. imports.

C) the value of U.S. exports was less than the value of U.S. imports.

D) U.S. consumption expenditure plus investment was less than the value of exports plus the value of imports.

E) U.S. consumption expenditure plus investment plus government expenditures on goods and services was less than the value of exports plus the value of imports.

50) When an American college student in Davis, California spends $200 on a pair of Louis Vuitton jeans (a famous French brand), U.S. consumption ________, U.S. net exports ________, and U.S. GDP ________.      

A) does not change; increases by $200; increases by $200

B) increases by $200; decreases by $200; does not change

C) increases by $200; does not change; increases by $200

D) does not change; does not change; does not change

E) does not change; decreases by $200; decreases by $200