Question 1

If an American firm produces goods that are sold to a German household, then

Accepted Answer

A)  the transaction is considered an export in the German GDP accounts. 
B)  net exports in the United States will not change because an export immediately generates an offsetting import. 
C)  German GDP increases but not U.S. GDP. 
D)  U.S. GDP increases. 
A)  the transaction is considered an export in the German GDP accounts. 
B)  net exports in the United States will not change because an export immediately generates an offsetting import. 
C)  German GDP increases but not U.S. GDP. 
D)  U.S. GDP increases.

Question 2

The term "business cycle" most closely refers to the

Accepted Answer

A)  fluctuating profits of firms. 
B)  alternating periods of expansions and recessions. 
C)  accounting period used by firms. 
D)  fiscal year. 
A)  fluctuating profits of firms. 
B)  alternating periods of expansions and recessions. 
C)  accounting period used by firms. 
D)  fiscal year.

Question 3

If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is

Accepted Answer

A)  $1.9 billion. 
B)  $1 billion. 
C)  $2 billion. 
D)  $2.1 billion. 
A)  $1.9 billion. 
B)  $1 billion. 
C)  $2 billion. 
D)  $2.1 billion.

Question 4

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

Accepted Answer

Gross investment is the total amount spe

Question 5

The series of ups and downs the economy tends to move in is called

Accepted Answer

A)  the business cycle. 
B)  economic growth. 
C)  a recession. 
D)  a depression. 
A)  the business cycle. 
B)  economic growth. 
C)  a recession. 
D)  a depression.

Question 6

An expansion occurs when the level of real GDP is

Accepted Answer

A)  at a cyclical trough. 
B)  at a cyclical peak. 
C)  increasing. 
D)  decreasing. 
A)  at a cyclical trough. 
B)  at a cyclical peak. 
C)  increasing. 
D)  decreasing.

Question 7

Potential GDP is

Accepted Answer

A)  the level of GDP not adjusted for price changes. 
B)  achieved when all factors of production are fully employed. 
C)  always different from real GDP. 
D)  another name for real GDP. 
A)  the level of GDP not adjusted for price changes. 
B)  achieved when all factors of production are fully employed. 
C)  always different from real GDP. 
D)  another name for real GDP.

Question 8

To calculate GDP using the expenditure approach, in part it is necessary to

Accepted Answer

A)  add imports and subtract exports. 
B)  add exports and subtract imports. 
C)  add imports and exports. 
D)  subtract both exports and imports. 
A)  add imports and subtract exports. 
B)  add exports and subtract imports. 
C)  add imports and exports. 
D)  subtract both exports and imports.

Question 9

Transfer payments

Accepted Answer

A)  refer to all payments made to households by governments. 
B)  are made by households to firms in exchange for goods and services. 
C)  refer to payments made by the government that are not made to purchase a good or service. 
D)  are included in the government expenditure category in gross domestic product. 
A)  refer to all payments made to households by governments. 
B)  are made by households to firms in exchange for goods and services. 
C)  refer to payments made by the government that are not made to purchase a good or service. 
D)  are included in the government expenditure category in gross domestic product.

Question 10

Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Accepted Answer

A)  profits made by businesses 
B)  investment 
C)  interest earned on savings deposits 
D)  income earned by businesses that export goods 
A)  profits made by businesses 
B)  investment 
C)  interest earned on savings deposits 
D)  income earned by businesses that export goods

Question 11

Gross domestic product (GDP) is the in a given time period.

Accepted Answer

A)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
B)  market value of final goods and services produced by the economy 
C)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
D)  sum of wage and salary compensation of employees and corporate profits 
A)  value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations 
B)  market value of final goods and services produced by the economy 
C)  value of personal consumption expenditures, gross private domestic investment, and federal government expenditures 
D)  sum of wage and salary compensation of employees and corporate profits

Question 12

List and compare the four components of the expenditure approach to calculating GDP.

Accepted Answer

The 4 parts can be summarized according

Question 13

What is the distinction between gross investment and net investment?

Accepted Answer

Gross investment is the total spending o

Question 14

"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, can be expected to this year.

Accepted Answer

A)  consumption; decrease 
B)  net interest income; decrease 
C)  imports; decrease 
D)  exports; increase 
A)  consumption; decrease 
B)  net interest income; decrease 
C)  imports; decrease 
D)  exports; increase

Question 15

An economic expansion rather than a recession occurs

Accepted Answer

A)  when the unemployment rate falls below 5 percent. 
B)  when the unemployment rate is falling. 
C)  when growth in real GDP is positive. 
D)  when the federal budget is balanced. 
A)  when the unemployment rate falls below 5 percent. 
B)  when the unemployment rate is falling. 
C)  when growth in real GDP is positive. 
D)  when the federal budget is balanced.

Question 16

Looking at the components of the income approach we see that

Accepted Answer

A)  consumption is the largest category. 
B)  rental income is the largest category. 
C)  compensation of employees is the largest category. 
D)  profits are the largest category. 
A)  consumption is the largest category. 
B)  rental income is the largest category. 
C)  compensation of employees is the largest category. 
D)  profits are the largest category.

Question 17

A peak is the

Accepted Answer

A)  upper turning point of a business cycle when a recession ends. 
B)  lower turning point of a business cycle when a recession ends. 
C)  upper turning point of a business cycle when an expansion ends. 
D)  lower turning point of a business cycle when an expansion ends. 
A)  upper turning point of a business cycle when a recession ends. 
B)  lower turning point of a business cycle when a recession ends. 
C)  upper turning point of a business cycle when an expansion ends. 
D)  lower turning point of a business cycle when an expansion ends.

Question 18

The difference between gross investment and net investment is

Accepted Answer

A)  consumption. 
B)  depreciation. 
C)  initial capital. 
D)  inflation. 
A)  consumption. 
B)  depreciation. 
C)  initial capital. 
D)  inflation.

Question 19

Is every product produced in the United States included in U.S. gross domestic product?

Accepted Answer

No, not every product produced is includ

Question 20

-The table above shows Japan's real GDP between 1991 to 2001.
a) Draw a figure with Japan's real GDP from 1991 to 2001.
b) In the previous 30 years, the growth rate of Japan's potential GDP was 6 percent a year. On your graph, show path that potential GDP would have followed if its GDP in 1991 was equal to potential GDP and the growth rate potential GDP had been maintained in 1991- 2001.
c) Show the Lucas wedge on your figure.

Accepted Answer

@#IMG-DLM& a) See the figure above.
b) Potential G

If an American firm produces goods that are sold to a German household, then

The term "business cycle" most closely refers to the

If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

The series of ups and downs the economy tends to move in is called

An expansion occurs when the level of real GDP is

Potential GDP is

To calculate GDP using the expenditure approach, in part it is necessary to

Transfer payments

Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Gross domestic product (GDP) is the in a given time period.

List and compare the four components of the expenditure approach to calculating GDP.

What is the distinction between gross investment and net investment?

An economic expansion rather than a recession occurs

Looking at the components of the income approach we see that

A peak is the

The difference between gross investment and net investment is

Is every product produced in the United States included in U.S. gross domestic product?

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

If an American firm produces goods that are sold to a German household, then

The term "business cycle" most closely refers to the

If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

The series of ups and downs the economy tends to move in is called

An expansion occurs when the level of real GDP is

Potential GDP is

To calculate GDP using the expenditure approach, in part it is necessary to

Transfer payments

Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Gross domestic product (GDP) is the in a given time period.

List and compare the four components of the expenditure approach to calculating GDP.

What is the distinction between gross investment and net investment?

An economic expansion rather than a recession occurs

Looking at the components of the income approach we see that

A peak is the

The difference between gross investment and net investment is

Is every product produced in the United States included in U.S. gross domestic product?

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