Question 1

Business cycles are

Accepted Answer

A)  predictable, with a recession following a trough. 
B)  irregular, with some having two recessions and no expansion. 
C)  unpredictable, but always have two phases and two turning points. 
D)  unpredictable, and donʹt always have two phases and two turning points. 
A)  predictable, with a recession following a trough. 
B)  irregular, with some having two recessions and no expansion. 
C)  unpredictable, but always have two phases and two turning points. 
D)  unpredictable, and donʹt always have two phases and two turning points.

Question 2

Real GDP in 2010 is $10 trillion. Between 2010 and 2011, using 2010 prices, GDP grew 3 percent and using 2011 prices real GDP grew 7 percent. Using the chain-weighted output index method, real GDP in 2011 is trillion.

Accepted Answer

A)  $11 
B)  $10.1 
C)  $12.72 
D)  $10.5 
A)  $11 
B)  $10.1 
C)  $12.72 
D)  $10.5

Question 3

Explain the business cycle by describing the phases and turning points.

Accepted Answer

The business cycle has two phases, the e

Question 4

The income approach to measuring GDP

Accepted Answer

A)  sums the value at each stage of production plus the value of depreciation. 
B)  determines the cost of production, then adjusts it to equal the market value of production. 
C)  sums all incomes earned in the United States and makes no other adjustments because other adjustments are not necessary. 
D)  measures the cost of producing GDP rather than the market value. 
A)  sums the value at each stage of production plus the value of depreciation. 
B)  determines the cost of production, then adjusts it to equal the market value of production. 
C)  sums all incomes earned in the United States and makes no other adjustments because other adjustments are not necessary. 
D)  measures the cost of producing GDP rather than the market value.

Question 5

Net investment equals

Accepted Answer

A)  gross investment + depreciation. 
B)  depreciation + addition to inventories. 
C)  gross investment - depreciation. 
D)  savings - depreciation. 
A)  gross investment + depreciation. 
B)  depreciation + addition to inventories. 
C)  gross investment - depreciation. 
D)  savings - depreciation.

Question 6

A recession is commonly defined as occurring when

Accepted Answer

A)  the unemployment rate rises above 7.5 percent for 6 or more months. 
B)  real GDP decreases for a period of 12 or more months. 
C)  the unemployment rate rises above 5.0 percent for 12 or more months. 
D)  real GDP decreases for a period of 6 or more months. 
A)  the unemployment rate rises above 7.5 percent for 6 or more months. 
B)  real GDP decreases for a period of 12 or more months. 
C)  the unemployment rate rises above 5.0 percent for 12 or more months. 
D)  real GDP decreases for a period of 6 or more months.

Question 7

What are the categories of total expenditure?

Accepted Answer

There are four categories: Consumption e

Question 8

In the country of Darrowby, net domestic income at factor cost is $2.0 million. Gross domestic product is $3.0 million, and depreciation is $0.5 million. Indirect taxes less subsidies_________ .

Accepted Answer

A)  are $0.5 million 
B)  are -$0.5 million 
C)  are $1 million 
D)  cannot be calculated 
A)  are $0.5 million 
B)  are -$0.5 million 
C)  are $1 million 
D)  cannot be calculated

Question 9

The chain-weighted output index method .

Accepted Answer

A)  shows that real GDP increases every year 
B)  is used to calculate the value of nominal GDP 
C)  uses the prices of two adjacent years to calculate the real GDP growth rate 
D)  values the quantities produced in a year at the prices of the base year 
A)  shows that real GDP increases every year 
B)  is used to calculate the value of nominal GDP 
C)  uses the prices of two adjacent years to calculate the real GDP growth rate 
D)  values the quantities produced in a year at the prices of the base year

Question 10

The difference between gross investment and net investment is

Accepted Answer

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

Question 11

Comparing aggregate expenditure and aggregate incomes shows that

Accepted Answer

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

Question 12

ʺAs the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be Chinaʹs 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 in each of the last two monthsʺ.
Beijingʹs Burden,
-According to the article,_________ is expected to increase and add to Chinaʹs _________component of GDP.

Accepted Answer

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

Question 13

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexicoʹs population was 104 million and GDP was $839 billion. Per GDP person_________ by_________
Between 2006 and 2007 in Mexico.

Accepted Answer

A)  increased; 5 percent 
B)  decreased; $2013 
C)  increased; $1038 
D)  decreased; 5 percent 
A)  increased; 5 percent 
B)  decreased; $2013 
C)  increased; $1038 
D)  decreased; 5 percent

Question 14

List and explain the two phases and two turning points of the business cycle.

Accepted Answer

The economy is defined as being an expan

Question 15

In any year, real GDP

Accepted Answer

A)  always equals potential GDP. 
B)  might be greater or less than potential GDP. 
C)  must always be less than potential GDP. 
D)  will be greater than potential GDP if the inflation rate is positive. 
A)  always equals potential GDP. 
B)  might be greater or less than potential GDP. 
C)  must always be less than potential GDP. 
D)  will be greater than potential GDP if the inflation rate is positive.

Question 16

The largest component of GDP in the expenditure approach is

Accepted Answer

A)  personal consumption expenditures. 
B)  net exports. 
C)  government expenditure on goods and services. 
D)  gross private domestic investment. 
A)  personal consumption expenditures. 
B)  net exports. 
C)  government expenditure on goods and services. 
D)  gross private domestic investment.

Question 17

-In the above figure, flow B represents__________.

Accepted Answer

A)  household purchases of goods and services 
B)  firmsʹ payments for labor services 
C)  household income 
D)  household borrowing 
A)  household purchases of goods and services 
B)  firmsʹ payments for labor services 
C)  household income 
D)  household borrowing

Question 18

Two methods of measuring GDP are

Accepted Answer

A)  the income approach and the receipts approach. 
B)  the income approach and the expenditure approach. 
C)  the goods approach and the services approach. 
D)  the saving approach and the investment approach. 
A)  the income approach and the receipts approach. 
B)  the income approach and the expenditure approach. 
C)  the goods approach and the services approach. 
D)  the saving approach and the investment approach.

Question 19

In the equation, GDP = C + I + G + X - M, G refers to

Accepted Answer

A)  federal government expenditures plus all transfer payments. 
B)  the taxes and expenditures of all government units. 
C)  local, state, and federal government expenditure on goods and services, but does not include transfer payments. 
D)  local, state, and federal government spending for all purposes. 
A)  federal government expenditures plus all transfer payments. 
B)  the taxes and expenditures of all government units. 
C)  local, state, and federal government expenditure on goods and services, but does not include transfer payments. 
D)  local, state, and federal government spending for all purposes.

Question 20

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

Accepted Answer

Gross investment minus depreciation equa

Business cycles are

Real GDP in 2010 is $10 trillion. Between 2010 and 2011, using 2010 prices, GDP grew 3 percent and using 2011 prices real GDP grew 7 percent. Using the chain-weighted output index method, real GDP in 2011 is trillion.

Explain the business cycle by describing the phases and turning points.

The income approach to measuring GDP

Net investment equals

A recession is commonly defined as occurring when

What are the categories of total expenditure?

In the country of Darrowby, net domestic income at factor cost is $2.0 million. Gross domestic product is $3.0 million, and depreciation is $0.5 million. Indirect taxes less subsidies_________ .

The chain-weighted output index method .

The difference between gross investment and net investment is

Comparing aggregate expenditure and aggregate incomes shows that

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexicoʹs population was 104 million and GDP was $839 billion. Per GDP person_ by_ Between 2006 and 2007 in Mexico.

List and explain the two phases and two turning points of the business cycle.

In any year, real GDP

The largest component of GDP in the expenditure approach is

-In the above figure, flow B represents__________.

Two methods of measuring GDP are

In the equation, GDP = C + I + G + X - M, G refers to

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

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

Business cycles are

Real GDP in 2010 is $10 trillion. Between 2010 and 2011, using 2010 prices, GDP grew 3 percent and using 2011 prices real GDP grew 7 percent. Using the chain-weighted output index method, real GDP in 2011 is trillion.

Explain the business cycle by describing the phases and turning points.

The income approach to measuring GDP

Net investment equals

A recession is commonly defined as occurring when

What are the categories of total expenditure?

In the country of Darrowby, net domestic income at factor cost is $2.0 million. Gross domestic product is $3.0 million, and depreciation is $0.5 million. Indirect taxes less subsidies_________ .

The chain-weighted output index method .

The difference between gross investment and net investment is

Comparing aggregate expenditure and aggregate incomes shows that

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexicoʹs population was 104 million and GDP was $839 billion. Per GDP person_________ by_________ Between 2006 and 2007 in Mexico.

List and explain the two phases and two turning points of the business cycle.

In any year, real GDP

The largest component of GDP in the expenditure approach is

-In the above figure, flow B represents__________.

Two methods of measuring GDP are

In the equation, GDP = C + I + G + X - M, G refers to

What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?

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

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexicoʹs population was 104 million and GDP was $839 billion. Per GDP person_ by_ Between 2006 and 2007 in Mexico.