Question 1

A common definition of a recession is a time with

Accepted Answer

A)  a decrease in the unemployment rate. 
B)  a decrease in the amount of total production. 
C)  a decline in interest rates. 
D)  a decline in the price level. 
A)  a decrease in the unemployment rate. 
B)  a decrease in the amount of total production. 
C)  a decline in interest rates. 
D)  a decline in the price level.

Question 2

Gross domestic product

Accepted Answer

A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  is generally less than federal expenditure in any time period. 
C)  measures the value of the aggregate production of goods and services in a country during a given time period. 
D)  measures the value of labor payments generated in an economy in a given time period. 
A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  is generally less than federal expenditure in any time period. 
C)  measures the value of the aggregate production of goods and services in a country during a given time period. 
D)  measures the value of labor payments generated in an economy in a given time period.

Question 3

Recessions are commonly defined to occur

Accepted Answer

A)  when growth in real GDP decreases for two consecutive quarters. 
B)  when growth in real GDP is negative for two consecutive quarters. 
C)  whenever unemployment increases. 
D)  when the unemployment rate exceeds 6 percent. 
A)  when growth in real GDP decreases for two consecutive quarters. 
B)  when growth in real GDP is negative for two consecutive quarters. 
C)  whenever unemployment increases. 
D)  when the unemployment rate exceeds 6 percent.

Question 4

Which of the following are parts of the business cycles?

Accepted Answer

A)  recession and expansion 
B)  real GDP and potential GDP 
C)  inflation and recession 
D)  peak and potential GDP 
A)  recession and expansion 
B)  real GDP and potential GDP 
C)  inflation and recession 
D)  peak and potential GDP

Question 5

Gross domestic product is the

Accepted Answer

A)  value of the final goods and services produced in a country during a specific time. 
B)  total amount of income earned in producing the final goods and services in a country during a specific time. 
C)  total amount that buyers spent on the final goods and services produced in a country during a specific time. 
D)  All of the above answers are correct. 
A)  value of the final goods and services produced in a country during a specific time. 
B)  total amount of income earned in producing the final goods and services in a country during a specific time. 
C)  total amount that buyers spent on the final goods and services produced in a country during a specific time. 
D)  All of the above answers are correct.

Question 6

The circular flow diagram shows that

Accepted Answer

A)  goods and factor markets are independent. 
B)  the total amount of income generated by the economy equals the total purchases of final goods and services. 
C)  the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services. 
D)  consumption expenditure equals saving. 
A)  goods and factor markets are independent. 
B)  the total amount of income generated by the economy equals the total purchases of final goods and services. 
C)  the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services. 
D)  consumption expenditure equals saving.

Question 7

An expansion ends when the economy hits a trough and then enters a recession.

Accepted Answer

A) True 
 B)False

Question 8

The business cycle progresses from an expansion to a peak to a recession and then to a trough.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is the best definition of potential gross domestic product?

Accepted Answer

A)  the value of total production that grows at 2 percent per year 
B)  the value of total production when the economy's resources are fully employed 
C)  the value of total production 
D)  None of the above is correct. 
A)  the value of total production that grows at 2 percent per year 
B)  the value of total production when the economy's resources are fully employed 
C)  the value of total production 
D)  None of the above is correct.

Question 10

In the computation of GDP, social security payments count as

Accepted Answer

A)  transfer payments and are not included in GDP. 
B)  government expenditure on goods and services and are included in GDP. 
C)  transfer payments and are included in GDP. 
D)  government expenditure on goods and services and are not included in GDP. 
A)  transfer payments and are not included in GDP. 
B)  government expenditure on goods and services and are included in GDP. 
C)  transfer payments and are included in GDP. 
D)  government expenditure on goods and services and are not included in GDP.

Question 11

Nominal GDP is

Accepted Answer

A)  real GDP valued at base year prices. 
B)  real GDP adjusted for price changes. 
C)  GDP valued at prices of that year. 
D)  GDP valued at constant prices. 
A)  real GDP valued at base year prices. 
B)  real GDP adjusted for price changes. 
C)  GDP valued at prices of that year. 
D)  GDP valued at constant prices.

Question 12

A business cycle is the pattern of short- run upward and downward movements in production and jobs.

Accepted Answer

A) True 
 B)False

Question 13

The largest component of national income is

Accepted Answer

A)  rental income. 
B)  compensation of employees. 
C)  proprietors' income. 
D)  corporate profits. 
A)  rental income. 
B)  compensation of employees. 
C)  proprietors' income. 
D)  corporate profits.

Question 14

-The above table shows data from the GDP accounts of Hypothetica. Hypothetica's GDP is _ billion.

Accepted Answer

A)  $160 
B)  $210 
C)  $190 
D)  $270 
A)  $160 
B)  $210 
C)  $190 
D)  $270

Question 15

The base- year method of calculating real GDP compared

Accepted Answer

A)  quantities produced in different years using prices from a year chosen as a reference period. 
B)  prices at different points in time using a sample of goods that is representative of goods purchased by households. 
C)  the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
D)  quantities produced in different years with the prices that prevailed during the year in which the output was produced. 
A)  quantities produced in different years using prices from a year chosen as a reference period. 
B)  prices at different points in time using a sample of goods that is representative of goods purchased by households. 
C)  the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
D)  quantities produced in different years with the prices that prevailed during the year in which the output was produced.

Question 16

Explain how our economic welfare depends upon our level of real GDP per person but there might not be a one- to- one relationship between economic welfare and real GDP per person. Give examples of things that can effect one but not the other.

Accepted Answer

Although GDP has a significant impact on

Question 17

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and .

Accepted Answer

A)  net taxes 
B)  profits 
C)  government expenditures on goods and services 
D)  saving 
A)  net taxes 
B)  profits 
C)  government expenditures on goods and services 
D)  saving

Question 18

The expenditure approach to measuring GDP includes firms' spending on wages.

Accepted Answer

A) True 
 B)False

Question 19

-In the above figure, the distance between points S and T represents

Accepted Answer

A)  a trough. 
B)  a peak. 
C)  an expansion. 
D)  a recession. 
A)  a trough. 
B)  a peak. 
C)  an expansion. 
D)  a recession.

Question 20

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

Accepted Answer

GDP is the value of the final goods and

A common definition of a recession is a time with

Gross domestic product

Recessions are commonly defined to occur

Which of the following are parts of the business cycles?

Gross domestic product is the

The circular flow diagram shows that

An expansion ends when the economy hits a trough and then enters a recession.

The business cycle progresses from an expansion to a peak to a recession and then to a trough.

Which of the following is the best definition of potential gross domestic product?

In the computation of GDP, social security payments count as

Nominal GDP is

A business cycle is the pattern of short- run upward and downward movements in production and jobs.

The largest component of national income is

-The above table shows data from the GDP accounts of Hypothetica. Hypothetica's GDP is _ billion.

The base- year method of calculating real GDP compared

Explain how our economic welfare depends upon our level of real GDP per person but there might not be a one- to- one relationship between economic welfare and real GDP per person. Give examples of things that can effect one but not the other.

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and .

The expenditure approach to measuring GDP includes firms' spending on wages.

-In the above figure, the distance between points S and T represents

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

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

A common definition of a recession is a time with

Gross domestic product

Recessions are commonly defined to occur

Which of the following are parts of the business cycles?

Gross domestic product is the

The circular flow diagram shows that

An expansion ends when the economy hits a trough and then enters a recession.

The business cycle progresses from an expansion to a peak to a recession and then to a trough.

Which of the following is the best definition of potential gross domestic product?

In the computation of GDP, social security payments count as

Nominal GDP is

A business cycle is the pattern of short- run upward and downward movements in production and jobs.

The largest component of national income is

-The above table shows data from the GDP accounts of Hypothetica. Hypothetica's GDP is _ billion.

The base- year method of calculating real GDP compared

Explain how our economic welfare depends upon our level of real GDP per person but there might not be a one- to- one relationship between economic welfare and real GDP per person. Give examples of things that can effect one but not the other.

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and .

The expenditure approach to measuring GDP includes firms' spending on wages.

-In the above figure, the distance between points S and T represents

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

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