Question 1

An increase in the value of nominal GDP over time:

Accepted Answer

A)  is always due to an increase in prices. 
B)  is always due to an increase in the production of goods and services. 
C)  may be due to an increase in prices, in the production of goods and services, or both. 
D)  may be due to a decrease in prices, in the production of goods and services, or both. 
A)  is always due to an increase in prices. 
B)  is always due to an increase in the production of goods and services. 
C)  may be due to an increase in prices, in the production of goods and services, or both. 
D)  may be due to a decrease in prices, in the production of goods and services, or both.

Question 2

Economists frequently use GDP per capita to reflect:

Accepted Answer

A)  the impact of prices on GDP. 
B)  differences in living standards across countries. 
C)  people who are employed. 
D)  both people who are employed and those who are unemployed. 
A)  the impact of prices on GDP. 
B)  differences in living standards across countries. 
C)  people who are employed. 
D)  both people who are employed and those who are unemployed.

Question 3

Use the following to answer questions:  
-(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of financial markets is:

Accepted Answer

A)  $70. 
B)  $110. 
C)  $170. 
D)  $300. 
A)  $70. 
B)  $110. 
C)  $170. 
D)  $300.

Question 4

Dividing real GDP by the population:

Accepted Answer

A)  results in consumption per capita. 
B)  results in nominal GDP per capita. 
C)  results in real GDP per capita. 
D)  results in a measure of happiness. 
A)  results in consumption per capita. 
B)  results in nominal GDP per capita. 
C)  results in real GDP per capita. 
D)  results in a measure of happiness.

Question 5

In the United States, consumer spending accounts for approximately _____% of GDP.

Accepted Answer

A)  50 
B)  60 
C)  70 
D)  80 
A)  50 
B)  60 
C)  70 
D)  80

Question 6

Don is a builder and in his free time he has built an addition to his own house. This transaction will:

Accepted Answer

A)  not be included in GDP because it is not produced for the marketplace. 
B)  be included in GDP because Don is a professional builder. 
C)  not be included in GDP because it is an intermediate good. 
D)  be included in GDP because building is Don's hobby. 
A)  not be included in GDP because it is not produced for the marketplace. 
B)  be included in GDP because Don is a professional builder. 
C)  not be included in GDP because it is an intermediate good. 
D)  be included in GDP because building is Don's hobby.

Question 7

In the circular-flow diagram, firms:

Accepted Answer

A)  demand goods. 
B)  demand services. 
C)  supply resources. 
D)  demand resources. 
A)  demand goods. 
B)  demand services. 
C)  supply resources. 
D)  demand resources.

Question 8

Use the following to answer questions:  
-(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. How much of the increase in nominal GDP between 2010 and 2011 was due to inflation?

Accepted Answer

A)  31.25% 
B)  18.75% 
C)  12.5% 
D)  4% 
A)  31.25% 
B)  18.75% 
C)  12.5% 
D)  4%

Question 9

Use the following to answer questions:  
-(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is GDP?

Accepted Answer

A)  $200 
B)  $700 
C)  $1,000 
D)  $1,080 
A)  $200 
B)  $700 
C)  $1,000 
D)  $1,080

Question 10

GDP counts the dollar value of only final goods and services because:

Accepted Answer

A)  we can measure only the value of final goods and services, not the value of inputs. 
B)  if we counted the value of all goods, we would count inputs, such as the value of steel in a new automobile, more than once. 
C)  intermediate goods reduce GDP. 
D)  only final goods and services matter for the economy. 
A)  we can measure only the value of final goods and services, not the value of inputs. 
B)  if we counted the value of all goods, we would count inputs, such as the value of steel in a new automobile, more than once. 
C)  intermediate goods reduce GDP. 
D)  only final goods and services matter for the economy.

Question 11

Net exports are calculated by subtracting:

Accepted Answer

A)  imports from exports. 
B)  exports from imports. 
C)  out all intermediate goods. 
D)  I, G, and value added from GDP. 
A)  imports from exports. 
B)  exports from imports. 
C)  out all intermediate goods. 
D)  I, G, and value added from GDP.

Question 12

Use the following to answer questions:  
-(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of the rest of the world is:

Accepted Answer

A)  $30. 
B)  $80. 
C)  $160. 
D)  $240. 
A)  $30. 
B)  $80. 
C)  $160. 
D)  $240.

Question 13

If both aggregate output and the aggregate price level increase:

Accepted Answer

A)  real GDP will increase faster than nominal GDP will. 
B)  nominal GDP will increase faster than real GDP will. 
C)  it makes no difference to real or nominal GDP. 
D)  real GDP and nominal GDP will increase faster than the price level will. 
A)  real GDP will increase faster than nominal GDP will. 
B)  nominal GDP will increase faster than real GDP will. 
C)  it makes no difference to real or nominal GDP. 
D)  real GDP and nominal GDP will increase faster than the price level will.

Question 14

Use the following to answer questions:  
-(Table: Per Capita GDP) Use Table: Per Capita GDP. The growth rate of per capita nominal GDP was:

Accepted Answer

A)  10%. 
B)  20%. 
C)  25%. 
D)  33%. 
A)  10%. 
B)  20%. 
C)  25%. 
D)  33%.

Question 15

An intermediate good would be:

Accepted Answer

A)  a new boat to be used for vacations. 
B)  lumber used to build a house. 
C)  payments to military personnel. 
D)  a professor's salary. 
A)  a new boat to be used for vacations. 
B)  lumber used to build a house. 
C)  payments to military personnel. 
D)  a professor's salary.

Question 16

Use the following to answer questions:  
-(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita in 2010 was:

Accepted Answer

A)  $80. 
B)  $53. 
C)  $60. 
D)  $100. 
A)  $80. 
B)  $53. 
C)  $60. 
D)  $100.

Question 17

In the United States, government spending accounts for approximately_____% of GDP.

Accepted Answer

A)  5 
B)  10 
C)  20 
D)  30 
A)  5 
B)  10 
C)  20 
D)  30

Question 18

In the circular-flow diagram, households:

Accepted Answer

A)  supply goods. 
B)  supply services. 
C)  buy resources. 
D)  buy goods and services. 
A)  supply goods. 
B)  supply services. 
C)  buy resources. 
D)  buy goods and services.

Question 19

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. What is disposable income?

Accepted Answer

A)  $0 
B)  $100 
C)  $400 
D)  $500 
A)  $0 
B)  $100 
C)  $400 
D)  $500

Question 20

Suppose that nominal GDP is $1,000 in 2009 and $1,500 in 2010. If the overall price level increased by _____% between 2009 and 2010, we could say that real GDP _____.

Accepted Answer

A)  50; stayed constant 
B)  less than 50; decreased 
C)  more than 50; increased 
D)  50; increased 
A)  50; stayed constant 
B)  less than 50; decreased 
C)  more than 50; increased 
D)  50; increased

An increase in the value of nominal GDP over time:

Economists frequently use GDP per capita to reflect:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of financial markets is:

Dividing real GDP by the population:

In the United States, consumer spending accounts for approximately _____% of GDP.

Don is a builder and in his free time he has built an addition to his own house. This transaction will:

In the circular-flow diagram, firms:

Use the following to answer questions: -(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. How much of the increase in nominal GDP between 2010 and 2011 was due to inflation?

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is GDP?

GDP counts the dollar value of only final goods and services because:

Net exports are calculated by subtracting:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of the rest of the world is:

If both aggregate output and the aggregate price level increase:

Use the following to answer questions: -(Table: Per Capita GDP) Use Table: Per Capita GDP. The growth rate of per capita nominal GDP was:

An intermediate good would be:

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita in 2010 was:

In the United States, government spending accounts for approximately_____% of GDP.

In the circular-flow diagram, households:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. What is disposable income?

Suppose that nominal GDP is $1,000 in 2009 and $1,500 in 2010. If the overall price level increased by _% between 2009 and 2010, we could say that real GDP _.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 7: GDP and the CPI: Tracking the Macroeconomy

An increase in the value of nominal GDP over time:

Economists frequently use GDP per capita to reflect:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of financial markets is:

Dividing real GDP by the population:

In the United States, consumer spending accounts for approximately _____% of GDP.

Don is a builder and in his free time he has built an addition to his own house. This transaction will:

In the circular-flow diagram, firms:

Use the following to answer questions: -(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. How much of the increase in nominal GDP between 2010 and 2011 was due to inflation?

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is GDP?

GDP counts the dollar value of only final goods and services because:

Net exports are calculated by subtracting:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model The flow of funds into and out of the rest of the world is:

If both aggregate output and the aggregate price level increase:

Use the following to answer questions: -(Table: Per Capita GDP) Use Table: Per Capita GDP. The growth rate of per capita nominal GDP was:

An intermediate good would be:

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita in 2010 was:

In the United States, government spending accounts for approximately_____% of GDP.

In the circular-flow diagram, households:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. What is disposable income?

Suppose that nominal GDP is $1,000 in 2009 and $1,500 in 2010. If the overall price level increased by _____% between 2009 and 2010, we could say that real GDP _____.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Suppose that nominal GDP is $1,000 in 2009 and $1,500 in 2010. If the overall price level increased by _% between 2009 and 2010, we could say that real GDP _.