Question 1

Suppose that Firestone Tires buys raw rubber for $5,000 and then uses this to make tires it sells for $20,000.As a result,GDP has risen by:

Accepted Answer

A) $20,000 
B) $5,000 
C) $15,000 
D) $25,000 
A) $20,000 
B) $5,000 
C) $15,000 
D) $25,000

Question 2

Gross domestic product includes

Accepted Answer

A) all intermediate and final goods and services produced. 
B) the current production of final goods and services with a country's borders. 
C) exchanges of assets. 
D) the current production of final goods and services by a country's citizens. 
E) All of the above 
A) all intermediate and final goods and services produced. 
B) the current production of final goods and services with a country's borders. 
C) exchanges of assets. 
D) the current production of final goods and services by a country's citizens. 
E) All of the above

Question 3

Which of the following are not included in the consumption component of gross domestic product?

Accepted Answer

A) Purchases of stocks and bonds. 
B) Consumer durable goods 
C) Nondurable consumption goods 
D) Consumer services 
A) Purchases of stocks and bonds. 
B) Consumer durable goods 
C) Nondurable consumption goods 
D) Consumer services

Question 4

Chain-weighted GDP deflator inflation differs from GDP deflation inflation because:

Accepted Answer

A) it uses different goods in its calculation. 
B) it uses two different base years to get the quantities used to calculate the index. 
C) it uses a constant set of prices every year. 
D) it uses two different base years to get the prices used to calculate the index. 
A) it uses different goods in its calculation. 
B) it uses two different base years to get the quantities used to calculate the index. 
C) it uses a constant set of prices every year. 
D) it uses two different base years to get the prices used to calculate the index.

Question 5

The index that measures the change in price of a typical basket of consumer goods is

Accepted Answer

A) the GDP deflator. 
B) the consumer price index. 
C) nominal GDP. 
D) real GDP. 
A) the GDP deflator. 
B) the consumer price index. 
C) nominal GDP. 
D) real GDP.

Question 6

Which of the following is true about unemployment?

Accepted Answer

A) the benchmark high-employment level is most likely between 3 and 4 percent 
B) In recent years,the appropriate benchmark high-employment level has risen. 
C) Based on the experience of the 1960s,a 7 percent unemployment rate was too low to be sustained without a buildup of inflationary pressure 
D) During the 1970s,the benchmark high-employment level rose but this was not observed by economists at the time. 
A) the benchmark high-employment level is most likely between 3 and 4 percent 
B) In recent years,the appropriate benchmark high-employment level has risen. 
C) Based on the experience of the 1960s,a 7 percent unemployment rate was too low to be sustained without a buildup of inflationary pressure 
D) During the 1970s,the benchmark high-employment level rose but this was not observed by economists at the time.

Question 7

Which of the following governmental expenditures are not included in gross domestic product?

Accepted Answer

A) The construction of federal buildings 
B) Social Security payments 
C) Salaries for senators 
D) Purchases of new defense weapons 
A) The construction of federal buildings 
B) Social Security payments 
C) Salaries for senators 
D) Purchases of new defense weapons

Question 8

The calculation of potential output in the United States has been complicated recently by problems in

Accepted Answer

A) calculating unemployment. 
B) distinguishing real from nominal income. 
C) calculating a high-employment,or long-run average,level unemployment rate. 
D) measuring depreciation and,therefore,net national product. 
A) calculating unemployment. 
B) distinguishing real from nominal income. 
C) calculating a high-employment,or long-run average,level unemployment rate. 
D) measuring depreciation and,therefore,net national product.

Question 9

In 1996,an advisory commission,appointed by the Senate Finance Committee,estimated that,due to certain distortions,the CPI overstates inflation by

Accepted Answer

A) .5 percentage points per year. 
B) 2.0 percentage points per year. 
C) 1.1 percentage points per year. 
D) .25 percentage points per year. 
A) .5 percentage points per year. 
B) 2.0 percentage points per year. 
C) 1.1 percentage points per year. 
D) .25 percentage points per year.

Question 10

What was the largest and most important economic event of the 1900s?

Accepted Answer

A) The terrorist attacks of 9/11. 
B) Ronald Reagan's tax cuts. 
C) The Great Depression. 
D) The inflation of the 1970s. 
A) The terrorist attacks of 9/11. 
B) Ronald Reagan's tax cuts. 
C) The Great Depression. 
D) The inflation of the 1970s.

Question 11

The largest component of GDP in the US is typically:

Accepted Answer

A) government purchases. 
B) social securtity. 
C) consumption. 
D) investment. 
E) net exports. 
A) government purchases. 
B) social securtity. 
C) consumption. 
D) investment. 
E) net exports.

Question 12

Goods in the CPI inflation are weighted by

Accepted Answer

A) the price of each good. 
B) the share of each good in GDP. 
C) the share of each good in the budget of an average household. 
D) the share of each good in total consumption. 
A) the price of each good. 
B) the share of each good in GDP. 
C) the share of each good in the budget of an average household. 
D) the share of each good in total consumption.

Question 13

Consumption expenditure includes

Accepted Answer

A) the production of consumption goods not sold and held in inventory. 
B) the purchase of consumption goods made domestically but consumed by foreigners. 
C) purchase of goods and services by local government. 
D) services,durables,and non-durable goods. 
A) the production of consumption goods not sold and held in inventory. 
B) the purchase of consumption goods made domestically but consumed by foreigners. 
C) purchase of goods and services by local government. 
D) services,durables,and non-durable goods.

Question 14

The contemporary rate of unemployment that is often put forth as a benchmark high-employment level ranges from

Accepted Answer

A) 4.5 to 5 percent. 
B) 4.0 to 6 percent. 
C) 6 to 6.5 percent. 
D) 1 to 4.5 percent. 
A) 4.5 to 5 percent. 
B) 4.0 to 6 percent. 
C) 6 to 6.5 percent. 
D) 1 to 4.5 percent.

Question 15

What is the relationship between real and nominal GDP?

Accepted Answer

A) real GDP = nominal GDP - Price level 
B) nominal GDP = Real GDP/Price level 
C) real GDP = nominal GDP/Price level 
D) real GDP = nominal GDP + Price level. 
A) real GDP = nominal GDP - Price level 
B) nominal GDP = Real GDP/Price level 
C) real GDP = nominal GDP/Price level 
D) real GDP = nominal GDP + Price level.

Question 16

A new chain-weighted measure of real GDP

Accepted Answer

A) was introduced by the Bureau of Economic Analysis in 1995. 
B) uses the average of prices in a given year and prices in the previous year instead of using prices in a base year as weights. 
C) differs greatly from previous measures that utilized the base year method. 
D) Both a and b 
E) All of the above 
A) was introduced by the Bureau of Economic Analysis in 1995. 
B) uses the average of prices in a given year and prices in the previous year instead of using prices in a base year as weights. 
C) differs greatly from previous measures that utilized the base year method. 
D) Both a and b 
E) All of the above

Question 17

If real GDP exceeds potential GDP,this means that

Accepted Answer

A) output is below the level produced at the benchmark rate for high employment and high rate of resource utilization. 
B) this cannot occur; the economy can never be at a point where real GDP exceeds potential GDP. 
C) cyclical output is above what the economy can sustain in the long-run. 
D) the economy is expanding. 
A) output is below the level produced at the benchmark rate for high employment and high rate of resource utilization. 
B) this cannot occur; the economy can never be at a point where real GDP exceeds potential GDP. 
C) cyclical output is above what the economy can sustain in the long-run. 
D) the economy is expanding.

Suppose that Firestone Tires buys raw rubber for $5,000 and then uses this to make tires it sells for $20,000.As a result,GDP has risen by:

Gross domestic product includes

Which of the following are not included in the consumption component of gross domestic product?

Chain-weighted GDP deflator inflation differs from GDP deflation inflation because:

The index that measures the change in price of a typical basket of consumer goods is

Which of the following is true about unemployment?

Which of the following governmental expenditures are not included in gross domestic product?

The calculation of potential output in the United States has been complicated recently by problems in

In 1996,an advisory commission,appointed by the Senate Finance Committee,estimated that,due to certain distortions,the CPI overstates inflation by

What was the largest and most important economic event of the 1900s?

The largest component of GDP in the US is typically:

Goods in the CPI inflation are weighted by

Consumption expenditure includes

The contemporary rate of unemployment that is often put forth as a benchmark high-employment level ranges from

What is the relationship between real and nominal GDP?

A new chain-weighted measure of real GDP

If real GDP exceeds potential GDP,this means that

Introduction

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Macroeconomic Models:a Summary

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters

Exam 2: Measurement of Macroeconomic Variables

Suppose that Firestone Tires buys raw rubber for $5,000 and then uses this to make tires it sells for $20,000.As a result,GDP has risen by:

Gross domestic product includes

Which of the following are not included in the consumption component of gross domestic product?

Chain-weighted GDP deflator inflation differs from GDP deflation inflation because:

The index that measures the change in price of a typical basket of consumer goods is

Which of the following is true about unemployment?

Which of the following governmental expenditures are not included in gross domestic product?

The calculation of potential output in the United States has been complicated recently by problems in

In 1996,an advisory commission,appointed by the Senate Finance Committee,estimated that,due to certain distortions,the CPI overstates inflation by

What was the largest and most important economic event of the 1900s?

The largest component of GDP in the US is typically:

Goods in the CPI inflation are weighted by

Consumption expenditure includes

The contemporary rate of unemployment that is often put forth as a benchmark high-employment level ranges from

What is the relationship between real and nominal GDP?

A new chain-weighted measure of real GDP

If real GDP exceeds potential GDP,this means that

Introduction

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Macroeconomic Models:a Summary

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters