Question 1

Aggregate expenditures include all of the following EXCEPT

Accepted Answer

A)  purchases of guns by the government. 
B)  consumption of food. 
C)  purchases of intermediate goods. 
D)  purchases of a piece of capital equipment. 
A)  purchases of guns by the government. 
B)  consumption of food. 
C)  purchases of intermediate goods. 
D)  purchases of a piece of capital equipment. C

Question 2

The circular flow shows that aggregate spending is than aggregate income because people save.

Accepted Answer

A) True 
 B)False  False

Question 3

Personal consumption expenditures include all of the following EXCEPT spending on

Accepted Answer

A)  consumer services. 
B)  consumer durable goods. 
C)  new housing. 
D)  consumer nondurable goods. 
A)  consumer services. 
B)  consumer durable goods. 
C)  new housing. 
D)  consumer nondurable goods. C

Question 4

Comparing aggregate expenditure and aggregate incomes shows that

Accepted Answer

A)  they are equal. 
B)  aggregate expenditure is usually greater than aggregate income. 
C)  aggregate income can not equal aggregate expenditure if we have any savings. 
D)  aggregate income is usually greater than aggregate expenditure. 
A)  they are equal. 
B)  aggregate expenditure is usually greater than aggregate income. 
C)  aggregate income can not equal aggregate expenditure if we have any savings. 
D)  aggregate income is usually greater than aggregate expenditure.

Question 5

The four categories of expenditure used by the expenditure approach method to calculate GDP are

Accepted Answer

A)  consumption expenditure, taxes, saving and investment. 
B)  consumption expenditure, investment, government expenditure and net exports. 
C)  saving, taxes, government expenditure and investment. 
D)  consumption expenditure, investment, net imports and saving. 
A)  consumption expenditure, taxes, saving and investment. 
B)  consumption expenditure, investment, government expenditure and net exports. 
C)  saving, taxes, government expenditure and investment. 
D)  consumption expenditure, investment, net imports and saving.

Question 6

Household production is not measured in the GDP.

Accepted Answer

A) True 
 B)False

Question 7

-In the above figure, a trough is at point and a peak is at point _.

Accepted Answer

A)  b; c 
B)  a; b 
C)  d; c 
D)  b; a 
A)  b; c 
B)  a; b 
C)  d; c 
D)  b; a

Question 8

Net exports of goods and services equal the

Accepted Answer

A)  exports of goods and services plus the imports of goods and services. 
B)  exports of goods and services minus the imports of goods and services. 
C)  exports of goods and services divided by the imports of goods and services. 
D)  imports of goods and services minus the exports of goods and services. 
A)  exports of goods and services plus the imports of goods and services. 
B)  exports of goods and services minus the imports of goods and services. 
C)  exports of goods and services divided by the imports of goods and services. 
D)  imports of goods and services minus the exports of goods and services.

Question 9

When a recession ends, the turning point that immediately follows is called a

Accepted Answer

A)  peak. 
B)  depression. 
C)  trough. 
D)  None of the above answers is correct. 
A)  peak. 
B)  depression. 
C)  trough. 
D)  None of the above answers is correct.

Question 10

A business cycle is

Accepted Answer

A)  the pattern of short- run upward and downward movements in total output. 
B)  the cyclical movement in the interest rates. 
C)  the increase in consumer spending that accompanies an increase in disposable income. 
D)  the cyclical change in the nation's balance of trade. 
A)  the pattern of short- run upward and downward movements in total output. 
B)  the cyclical movement in the interest rates. 
C)  the increase in consumer spending that accompanies an increase in disposable income. 
D)  the cyclical change in the nation's balance of trade.

Question 11

Potential GDP

Accepted Answer

A)  measures the actual production from year to year. 
B)  is cyclical. 
C)  measures the output that could be produced if all resources were fully employed. 
D)  Both answers A and C are correct 
A)  measures the actual production from year to year. 
B)  is cyclical. 
C)  measures the output that could be produced if all resources were fully employed. 
D)  Both answers A and C are correct

Question 12

Phases and turning points of the business cycle are expansion, peak, recession and trough.

Accepted Answer

A) True 
 B)False

Question 13

In any year, the real GDP of an economy

Accepted Answer

A)  always equals potential GDP. 
B)  may be greater or less than potential GDP. 
C)  will always be greater than potential GDP because of the tendency of developed nations to incur inflation. 
D)  must always be less than potential GDP. 
A)  always equals potential GDP. 
B)  may be greater or less than potential GDP. 
C)  will always be greater than potential GDP because of the tendency of developed nations to incur inflation. 
D)  must always be less than potential GDP.

Question 14

Net investment is the

Accepted Answer

A)  profit or loss in the stock market. 
B)  value of software and other network related products. 
C)  total amount of gross investment minus depreciation. 
D)  value of the depreciated capital multiplied by the changes in the price level. 
A)  profit or loss in the stock market. 
B)  value of software and other network related products. 
C)  total amount of gross investment minus depreciation. 
D)  value of the depreciated capital multiplied by the changes in the price level.

Question 15

In computing GDP, it is essential to

Accepted Answer

A)  avoid double counting. 
B)  include government tax revenues. 
C)  include government transfer payments. 
D)  count all intermediate products directly as they are produced. 
A)  avoid double counting. 
B)  include government tax revenues. 
C)  include government transfer payments. 
D)  count all intermediate products directly as they are produced.

Question 16

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

Accepted Answer

Your friend's assertion is incorrect on

Question 17

Potential GDP is the

Accepted Answer

A)  value of production when the economy is in a recession. 
B)  the value of production with fully employed resources. 
C)  current value of production in the economy. 
D)  value of production when the economy is at a peak. 
A)  value of production when the economy is in a recession. 
B)  the value of production with fully employed resources. 
C)  current value of production in the economy. 
D)  value of production when the economy is at a peak.

Question 18

The use of purchasing power parity prices

Accepted Answer

A)  increases the amount by which U.S. GDP is larger than that of any other nation. 
B)  decreases the real GDP per person statistics published by the International Monetary Fund. 
C)  accounts for differences in the prices of the same goods in different countries when measuring real GDP. 
D)  weakens the validity of cross country comparisons of economic welfare. 
A)  increases the amount by which U.S. GDP is larger than that of any other nation. 
B)  decreases the real GDP per person statistics published by the International Monetary Fund. 
C)  accounts for differences in the prices of the same goods in different countries when measuring real GDP. 
D)  weakens the validity of cross country comparisons of economic welfare.

Question 19

Net investment equals gross investment minus depreciation.

Accepted Answer

A) True 
 B)False

Question 20

"As the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be China's ability to plough on regardless of double- digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent i each of the last two months".
Beijing's Burden, FT.com, by Geoff Dyer, Sept. 23,
-According to the article, is expected to increase and add to China's component of GDP.

Accepted Answer

A)  rental income; exports 
B)  retail sales; investment 
C)  rental income; investment 
D)  retail sales; consumption 
A)  rental income; exports 
B)  retail sales; investment 
C)  rental income; investment 
D)  retail sales; consumption

Aggregate expenditures include all of the following EXCEPT

The circular flow shows that aggregate spending is than aggregate income because people save.

Personal consumption expenditures include all of the following EXCEPT spending on

Comparing aggregate expenditure and aggregate incomes shows that

The four categories of expenditure used by the expenditure approach method to calculate GDP are

Household production is not measured in the GDP.

-In the above figure, a trough is at point and a peak is at point _.

Net exports of goods and services equal the

When a recession ends, the turning point that immediately follows is called a

A business cycle is

Potential GDP

Phases and turning points of the business cycle are expansion, peak, recession and trough.

In any year, the real GDP of an economy

Net investment is the

In computing GDP, it is essential to

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

Potential GDP is the

The use of purchasing power parity prices

Net investment equals gross investment minus depreciation.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring Gdp and Economic Growth

Aggregate expenditures include all of the following EXCEPT

The circular flow shows that aggregate spending is than aggregate income because people save.

Personal consumption expenditures include all of the following EXCEPT spending on

Comparing aggregate expenditure and aggregate incomes shows that

The four categories of expenditure used by the expenditure approach method to calculate GDP are

Household production is not measured in the GDP.

-In the above figure, a trough is at point and a peak is at point _.

Net exports of goods and services equal the

When a recession ends, the turning point that immediately follows is called a

A business cycle is

Potential GDP

Phases and turning points of the business cycle are expansion, peak, recession and trough.

In any year, the real GDP of an economy

Net investment is the

In computing GDP, it is essential to

While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

Potential GDP is the

The use of purchasing power parity prices

Net investment equals gross investment minus depreciation.

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters