Question 1

Recessions are commonly defined to occur

Accepted Answer

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

Question 2

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

Accepted Answer

A)  Real GDP does not include the underground economy. 
B)  Real GDP omits measures of political freedom. 
C)  Real GDP overvalues household production. 
D)  Real GDP does not take into account the value of peopleʹs leisure time. 
A)  Real GDP does not include the underground economy. 
B)  Real GDP omits measures of political freedom. 
C)  Real GDP overvalues household production. 
D)  Real GDP does not take into account the value of peopleʹs leisure time.

Question 3

The business cycle is the

Accepted Answer

A)  regular fluctuations of real GDP below potential GDP. 
B)  irregular fluctuations of prices around real GDP. 
C)  irregular fluctuations of real GDP around potential GDP. 
D)  regular growth rate of the real GDP. 
A)  regular fluctuations of real GDP below potential GDP. 
B)  irregular fluctuations of prices around real GDP. 
C)  irregular fluctuations of real GDP around potential GDP. 
D)  regular growth rate of the real GDP.

Question 4

Looking at the components of the income approach we see that

Accepted Answer

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

Question 5

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_________, can be expected to_________ this year.

Accepted Answer

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

Question 6

Real GDP does not show the state of economic welfare in a country in part because GDP omits
I. household production.
II. leisure time available.
III. the quality of the environment.

Accepted Answer

A)  I, II and III 
B)  I only 
C)  I and III 
D)  II and III 
A)  I, II and III 
B)  I only 
C)  I and III 
D)  II and III

Question 7

Which, if any, of the following causes reported GDP to be less than total economic production?

Accepted Answer

A)  the exclusion of household production 
B)  the inclusion of government expenditures 
C)  the exclusion of government transfers 
D)  None of the above cause reported GDP to be less than total production. 
A)  the exclusion of household production 
B)  the inclusion of government expenditures 
C)  the exclusion of government transfers 
D)  None of the above cause reported GDP to be less than total production.

Question 8

In the circular flow of income

Accepted Answer

A)  households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms. 
B)  households sell goods and services while firms sell factors. 
C)  households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. 
D)  households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. 
A)  households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms. 
B)  households sell goods and services while firms sell factors. 
C)  households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. 
D)  households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms.

Question 9

The largest component of national income is

Accepted Answer

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

Question 10

Net investment equals

Accepted Answer

A)  capital stock minus depreciation. 
B)  gross investment minus depreciation. 
C)  gross investment/depreciation. 
D)  the total quantity of plant, equipment and buildings. 
A)  capital stock minus depreciation. 
B)  gross investment minus depreciation. 
C)  gross investment/depreciation. 
D)  the total quantity of plant, equipment and buildings.

Question 11

Potential GDP is

Accepted Answer

A)  always different from real GDP. 
B)  another name for real GDP. 
C)  the level of GDP not adjusted for price changes. 
D)  the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation. 
A)  always different from real GDP. 
B)  another name for real GDP. 
C)  the level of GDP not adjusted for price changes. 
D)  the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation.

Question 12

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

Accepted Answer

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

Question 13

$$\begin{array} { | l | l | } 
\hline \text { Item } & \text { Dollars } \
\hline \begin{array}{l}
\text { Personal consumption } \
\text { expenditure }
\end{array} & 1500 \\hline \begin{array}{l}
\text { Gros s private domestic } \
\text { inves tment }
\end{array} & 355 \\hline \begin{array}{l}
\text { Government } \
\text { expenditure } \
\text { on goods and services }
\end{array} & 590 \\hline \begin{array}{l}
\text { Exports of goods and } \
\text { services }
\end{array} & 70 \\hline \begin{array}{l}
\text { Imports of goods and } \
\text { services }
\end{array} & 50 \\hline \text { Depreciation } & 200 \
\hline \text { Indirect busines s taxes } & 75 \
\hline
\end{array}$$
-Based on the data in the above table, gross domestic product equals

Accepted Answer

A)  $2,465. 
B)  $2,190. 
C)  $2,750. 
D)  $2,840. 
A)  $2,465. 
B)  $2,190. 
C)  $2,750. 
D)  $2,840.

Question 14

A recession occurs when real GDP decreases for at least 6 months.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is  NOT  a final good?

Accepted Answer

A)  a new car sold to Avis for use in their fleet of rental cars 
B)  a hot dog sold to a spectator at a Chicago Bears football game 
C)  a new computer sold to an NYU student 
D)  a purse sold to a foreign visitor 
A)  a new car sold to Avis for use in their fleet of rental cars 
B)  a hot dog sold to a spectator at a Chicago Bears football game 
C)  a new computer sold to an NYU student 
D)  a purse sold to a foreign visitor

Question 16

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Accepted Answer

A)  a final product. 
B)  an intermediate good. 
C)  a financial asset. 
D)  a used good. 
A)  a final product. 
B)  an intermediate good. 
C)  a financial asset. 
D)  a used good.

Question 17

Proprietorsʹ income is a component of which approach to measuring GDP?

Accepted Answer

A)  cost approach 
B)  expenditure approach 
C)  output approach 
D)  incomes approach 
A)  cost approach 
B)  expenditure approach 
C)  output approach 
D)  incomes approach

Question 18

-In the above figure, flow B represents householdsʹ__________ .

Accepted Answer

A)  consumption expenditures 
B)  income 
C)  saving 
D)  investment 
A)  consumption expenditures 
B)  income 
C)  saving 
D)  investment

Question 19

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

Accepted Answer

Net investment is the change in the capi

Question 20

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

Accepted Answer

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

Recessions are commonly defined to occur

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

The business cycle is the

Looking at the components of the income approach we see that

Real GDP does not show the state of economic welfare in a country in part because GDP omits I. household production. II. leisure time available. III. the quality of the environment.

Which, if any, of the following causes reported GDP to be less than total economic production?

In the circular flow of income

The largest component of national income is

Net investment equals

Potential GDP is

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

A recession occurs when real GDP decreases for at least 6 months.

Which of the following is NOT a final good?

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Proprietorsʹ income is a component of which approach to measuring GDP?

-In the above figure, flow B represents householdsʹ__________ .

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

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

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

Recessions are commonly defined to occur

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

The business cycle is the

Looking at the components of the income approach we see that

Real GDP does not show the state of economic welfare in a country in part because GDP omits I. household production. II. leisure time available. III. the quality of the environment.

Which, if any, of the following causes reported GDP to be less than total economic production?

In the circular flow of income

The largest component of national income is

Net investment equals

Potential GDP is

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

A recession occurs when real GDP decreases for at least 6 months.

Which of the following is NOT a final good?

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Proprietorsʹ income is a component of which approach to measuring GDP?

-In the above figure, flow B represents householdsʹ__________ .

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

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

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