Question 1

A trend is a general tendency for a variable to increase or decrease over time.)

Accepted Answer

A) True 
 B)False

Question 2

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

Accepted Answer

A) True 
 B)False

Question 3

An example of ʺinvestmentʺ in the national income accounts is the purchase of

Accepted Answer

A)  a new van by a potter, who packs it with his wares and travels to art shows. 
B)  a U.S. government bond. 
C)  a 100-year-old house that was just put on the protected historic sites list in the year in question. 
D)  100 shares of Canadian stock on the New York Stock Exchange. 
A)  a new van by a potter, who packs it with his wares and travels to art shows. 
B)  a U.S. government bond. 
C)  a 100-year-old house that was just put on the protected historic sites list in the year in question. 
D)  100 shares of Canadian stock on the New York Stock Exchange.

Question 4

Which of the following is included in government expenditures when measuring GDP?

Accepted Answer

A)  unemployment compensation payments 
B)  pension payment made to past presidents 
C)  the current presidentʹs salary 
D)  Social Security payments 
A)  unemployment compensation payments 
B)  pension payment made to past presidents 
C)  the current presidentʹs salary 
D)  Social Security payments

Question 5

Define and discuss GDP.

Accepted Answer

GDP is the market value of all final goo

Question 6

In part, the underground economy exists because of the

Accepted Answer

A)  irrationality of people who choose to evade taxes. 
B)  high tax rates. 
C)  greater efficiency of barter transactions compared to monetary ones. 
D)  ease of entry into the occupations that compose it. 
A)  irrationality of people who choose to evade taxes. 
B)  high tax rates. 
C)  greater efficiency of barter transactions compared to monetary ones. 
D)  ease of entry into the occupations that compose it.

Question 7

Real GDP

Accepted Answer

A)  can be called potential GDP when it is adjusted for price changes. 
B)  grows at a constant 3 to 4 percent per year. 
C)  fluctuates around potential GDP. 
D)  fluctuates from year to year but is always below potential GDP. 
A)  can be called potential GDP when it is adjusted for price changes. 
B)  grows at a constant 3 to 4 percent per year. 
C)  fluctuates around potential GDP. 
D)  fluctuates from year to year but is always below potential GDP.

Question 8

Personal consumption expenditures include

Accepted Answer

A)  expenditures by households on goods and services produced in the United States and the rest of the world. 
B)  expenditures by households on goods and services produced only in the United States. 
C)  the purchase of used goods and new goods. 
D)  the purchase of new homes. 
A)  expenditures by households on goods and services produced in the United States and the rest of the world. 
B)  expenditures by households on goods and services produced only in the United States. 
C)  the purchase of used goods and new goods. 
D)  the purchase of new homes.

Question 9

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

Accepted Answer

U.S. GDP includes all production in the

Question 10

The use of purchasing power parity prices

Accepted Answer

A)  weakens the validity of cross country comparisons of economic welfare. 
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)  increases the amount by which U.S. GDP is larger than that of any other nation. 
A)  weakens the validity of cross country comparisons of economic welfare. 
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)  increases the amount by which U.S. GDP is larger than that of any other nation.

Question 11

-In the above figure, a recession begins at point _________and an expansion begins at point_________

Accepted Answer

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

Question 12

Why does real GDP have limitations in determining economic welfare?

Accepted Answer

First economic welfare is a broad concep

Question 13

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany,

Accepted Answer

A)  Germanyʹs GDP decreases. 
B)  U.S. net exports is positive. 
C)  U.S. GDP decreases because net exports are negative. 
D)  U.S. GDP increases because it sells more Explorers. 
A)  Germanyʹs GDP decreases. 
B)  U.S. net exports is positive. 
C)  U.S. GDP decreases because net exports are negative. 
D)  U.S. GDP increases because it sells more Explorers.

Question 14

Compared to the other sources of spending, net exports is

Accepted Answer

A)  small and positive. 
B)  large and negative. 
C)  large and positive. 
D)  small and negative. 
A)  small and positive. 
B)  large and negative. 
C)  large and positive. 
D)  small and negative.

Question 15

An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is true?
I. U.S. net exports decrease.
II. U.S. investment increases.

Accepted Answer

A)  only II 
B)  only I 
C)  both I and II 
D)  neither I nor II 
A)  only II 
B)  only I 
C)  both I and II 
D)  neither I nor II

Question 16

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time in years) on the horizontal axis would show

Accepted Answer

A)  that inflation had a negative trend. 
B)  that inflation had a positive trend. 
C)  the rate of inflation as a horizontal line. 
D)  that inflation was following a decreasing trend line. 
A)  that inflation had a negative trend. 
B)  that inflation had a positive trend. 
C)  the rate of inflation as a horizontal line. 
D)  that inflation was following a decreasing trend line.

Question 17

$\begin{array}{|l|l|}
\hline \text { Government purchas es of goods and services } & \$ 240 \
\hline \text { Depreciation } & 240 \
\hline \text { Gros private domestic investment } & 400 \
\hline \text { Personal income taxes } & 140 \\hline \text { Net taxes } & 120 \
\hline \text { Net exports of goods and services } & 80 \
\hline \text { Personal consumption expenditures } & 640 \
\hline \text { Net interest } & 100 \
\hline
\end{array}$
-The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors? income, depreciation, and indirect taxes and subtracts subsidies is the

Accepted Answer

A)  expenditure approach. 
B)  added cost approach. 
C)  income approach. 
D)  opportunity cost approach. 
A)  expenditure approach. 
B)  added cost approach. 
C)  income approach. 
D)  opportunity cost approach.

Question 18

Last year in the country of Nerf imports equaled exports. Nerfʹs GDP was $500 million, its consumer expenditure was $380 million, and its investment was $20 million. Nerfʹs government expenditure on goods and services were ________.

Accepted Answer

A)  $500 million 
B)  zero 
C)  $900 million 
D)  $100 million 
A)  $500 million 
B)  zero 
C)  $900 million 
D)  $100 million

Question 19

The chain-weighted output index

Accepted Answer

A)  uses only the current yearʹs prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  is an inaccurate way to measure growth in real GDP and so has been replaced by the ʺnominal-to-realʺ index. 
D)  must be calculated only every other year. 
A)  uses only the current yearʹs prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  is an inaccurate way to measure growth in real GDP and so has been replaced by the ʺnominal-to-realʺ index. 
D)  must be calculated only every other year.

Question 20

An indirect tax is a tax paid by consumers

Accepted Answer

A)  on unearned income as opposed to wages and salaries). 
B)  when they purchase goods and services. 
C)  to a state or local government. 
D)  that is a percentage of the value of their real property. 
A)  on unearned income as opposed to wages and salaries). 
B)  when they purchase goods and services. 
C)  to a state or local government. 
D)  that is a percentage of the value of their real property.

A trend is a general tendency for a variable to increase or decrease over time.)

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

An example of ʺinvestmentʺ in the national income accounts is the purchase of

Which of the following is included in government expenditures when measuring GDP?

Define and discuss GDP.

In part, the underground economy exists because of the

Real GDP

Personal consumption expenditures include

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

The use of purchasing power parity prices

-In the above figure, a recession begins at point _and an expansion begins at point_

Why does real GDP have limitations in determining economic welfare?

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany,

Compared to the other sources of spending, net exports is

An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is true? I. U.S. net exports decrease. II. U.S. investment increases.

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time in years) on the horizontal axis would show

Last year in the country of Nerf imports equaled exports. Nerfʹs GDP was $500 million, its consumer expenditure was $380 million, and its investment was $20 million. Nerfʹs government expenditure on goods and services were ________.

The chain-weighted output index

An indirect tax is a tax paid by consumers

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 4: Measuring Gdp and Economic Growth

A trend is a general tendency for a variable to increase or decrease over time.)

A time series graph can show both the level of a variable and the speed with which the variable changes over time.

An example of ʺinvestmentʺ in the national income accounts is the purchase of

Which of the following is included in government expenditures when measuring GDP?

Define and discuss GDP.

In part, the underground economy exists because of the

Real GDP

Personal consumption expenditures include

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?

The use of purchasing power parity prices

-In the above figure, a recession begins at point _________and an expansion begins at point_________

Why does real GDP have limitations in determining economic welfare?

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany,

Compared to the other sources of spending, net exports is

An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is true? I. U.S. net exports decrease. II. U.S. investment increases.

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time in years) on the horizontal axis would show

Last year in the country of Nerf imports equaled exports. Nerfʹs GDP was $500 million, its consumer expenditure was $380 million, and its investment was $20 million. Nerfʹs government expenditure on goods and services were ________.

The chain-weighted output index

An indirect tax is a tax paid by consumers

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

-In the above figure, a recession begins at point _and an expansion begins at point_