Question 1

A net increase in inventories is considered as investment for the current year.

Accepted Answer

A) True 
 B)False

Question 2

Real gross domestic product (GDP)shows:

Accepted Answer

A) total spending on intermediate goods and services. 
B) constant dollar GDP. 
C) net domestic product. 
D) nominal GDP adjusted for taxes. 
E) domestic income. 
A) total spending on intermediate goods and services. 
B) constant dollar GDP. 
C) net domestic product. 
D) nominal GDP adjusted for taxes. 
E) domestic income.

Question 3

Disposable income equals personal income minus net taxes.

Accepted Answer

A) True 
 B)False

Question 4

Given the following hypothetical data where C = $3,000;I = $1,200;G = $2,000;X − M = −$500;depreciation = $200;transfer payments = $800,net domestic product is _____.

Accepted Answer

A) $5,500 
B) $5,700 
C) $6,200 
D) $6,400 
E) $6,900 
A) $5,500 
B) $5,700 
C) $6,200 
D) $6,400 
E) $6,900

Question 5

Which of the following is an example of an intermediate good?

Accepted Answer

A) Sugar bought by a bakery 
B) Sugar bought by a family 
C) Furniture bought by a family 
D) Burgers bought at a restaurant 
E) Medicines bought at a pharmacy 
A) Sugar bought by a bakery 
B) Sugar bought by a family 
C) Furniture bought by a family 
D) Burgers bought at a restaurant 
E) Medicines bought at a pharmacy

Question 6

A GDP price index of 100 for a year implies that:

Accepted Answer

A) there has been no inflation during the year. 
B) the price level is three times what it was in the base year. 
C) the price level is one hundred times what it was in the base year. 
D) the price level is double what it was in the base year. 
E) the inflation rate has been 100 percent per year since the base year. 
A) there has been no inflation during the year. 
B) the price level is three times what it was in the base year. 
C) the price level is one hundred times what it was in the base year. 
D) the price level is double what it was in the base year. 
E) the inflation rate has been 100 percent per year since the base year.

Question 7

Leakages cause diversion of income from the domestic spending stream.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of the gross domestic product (GDP)of a nation?

Accepted Answer

A) It can be measured by the stock of consumer goods in a nation at a particular point in time. 
B) It can be measured by the stock of capital goods in a nation at a particular point in time. 
C) It can be measured either by calculating the total spending on production or the total income from that production. 
D) It is the sum of total spending on production and total income from that production. 
E) It can be measured from the stock of wealth in the nation. 
A) It can be measured by the stock of consumer goods in a nation at a particular point in time. 
B) It can be measured by the stock of capital goods in a nation at a particular point in time. 
C) It can be measured either by calculating the total spending on production or the total income from that production. 
D) It is the sum of total spending on production and total income from that production. 
E) It can be measured from the stock of wealth in the nation.

Question 9

The U.S.Department of Commerce has been developing so-called "green accounting" to:

Accepted Answer

A) include the value of leisure in the gross domestic product (GDP)of the country. 
B) register the impact of pollution and natural resource depletion. 
C) value the output of new firms. 
D) illustrate the difference between nominal GDP and real GDP. 
E) measure the value of the output produced by inexperienced workers. 
A) include the value of leisure in the gross domestic product (GDP)of the country. 
B) register the impact of pollution and natural resource depletion. 
C) value the output of new firms. 
D) illustrate the difference between nominal GDP and real GDP. 
E) measure the value of the output produced by inexperienced workers.

Question 10

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.

Accepted Answer

A) True 
 B)False

Question 11

The consumer price index (CPI)overstates the true inflation rate because it ignores changes in consumers' purchasing patterns as relative prices change.

Accepted Answer

A) True 
 B)False

Question 12

The existence of the underground economy causes gross domestic product (GDP)statistics to _____.

Accepted Answer

A) understate the true volume of economic activity 
B) overstate the aggregate price level in the economy 
C) overstate the standard of living 
D) overstate the profit of firms 
E) understate government spending in an economy 
A) understate the true volume of economic activity 
B) overstate the aggregate price level in the economy 
C) overstate the standard of living 
D) overstate the profit of firms 
E) understate government spending in an economy

Question 13

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

Accepted Answer

A) $0 
B) $15,000 
C) $35,000 
D) $38,000 
E) $41,000 
A) $0 
B) $15,000 
C) $35,000 
D) $38,000 
E) $41,000

Question 14

Which of the following is not a component of aggregate expenditure?

Accepted Answer

A) Consumption expenditures 
B) Investment 
C) Imports 
D) Rent 
E) Government purchases 
A) Consumption expenditures 
B) Investment 
C) Imports 
D) Rent 
E) Government purchases

Question 15

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

Accepted Answer

A) 1 percent higher 
B) 8 percent higher 
C) 9 percent higher 
D) 0.9 percent higher 
E) 12 percent higher 
A) 1 percent higher 
B) 8 percent higher 
C) 9 percent higher 
D) 0.9 percent higher 
E) 12 percent higher

Question 16

To determine the consumer price index (CPI),_____.

Accepted Answer

A) the values of the current market basket at current and base-year prices need to be known 
B) the values of the base-year market basket at current and base-year prices need to be known 
C) the values of the current market basket at current prices and the base-year market basket at base-year prices need to be known 
D) only the current market basket at base-year prices needs to be known 
E) only the current market basket at current prices needs to be known 
A) the values of the current market basket at current and base-year prices need to be known 
B) the values of the base-year market basket at current and base-year prices need to be known 
C) the values of the current market basket at current prices and the base-year market basket at base-year prices need to be known 
D) only the current market basket at base-year prices needs to be known 
E) only the current market basket at current prices needs to be known

Question 17

If the real gross domestic product (GDP)for the base year is $4 trillion,then the nominal gross domestic product (GDP)for that year is _____.

Accepted Answer

A) −$.04 trillion 
B) $0.4 trillion 
C) $4 trillion 
D) $40 trillion 
E) $400 trillion 
A) −$.04 trillion 
B) $0.4 trillion 
C) $4 trillion 
D) $40 trillion 
E) $400 trillion

Question 18

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

Accepted Answer

A) True 
 B)False

Question 19

The circular flow model shows the flow of:

Accepted Answer

A) money in the economy. 
B) financial assets in the economy. 
C) goods and services in the product market. 
D) resources and money in the economy. 
E) resources through the resource markets and their allocation in the product market. 
A) money in the economy. 
B) financial assets in the economy. 
C) goods and services in the product market. 
D) resources and money in the economy. 
E) resources through the resource markets and their allocation in the product market.

Question 20

The consumer price index (CPI)tends to understate the true rate of inflation.

Accepted Answer

A) True 
 B)False

A net increase in inventories is considered as investment for the current year.

Real gross domestic product (GDP)shows:

Disposable income equals personal income minus net taxes.

Given the following hypothetical data where C = $3,000;I = $1,200;G = $2,000;X − M = −$500;depreciation = $200;transfer payments = $800,net domestic product is _____.

Which of the following is an example of an intermediate good?

A GDP price index of 100 for a year implies that:

Leakages cause diversion of income from the domestic spending stream.

Which of the following is true of the gross domestic product (GDP)of a nation?

The U.S.Department of Commerce has been developing so-called "green accounting" to:

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.

The consumer price index (CPI)overstates the true inflation rate because it ignores changes in consumers' purchasing patterns as relative prices change.

The existence of the underground economy causes gross domestic product (GDP)statistics to _____.

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

Which of the following is not a component of aggregate expenditure?

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

To determine the consumer price index (CPI),_____.

If the real gross domestic product (GDP)for the base year is $4 trillion,then the nominal gross domestic product (GDP)for that year is _____.

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

The circular flow model shows the flow of:

The consumer price index (CPI)tends to understate the true rate of inflation.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 6: Tracking the U S Economy

A net increase in inventories is considered as investment for the current year.

Real gross domestic product (GDP)shows:

Disposable income equals personal income minus net taxes.

Given the following hypothetical data where C = $3,000;I = $1,200;G = $2,000;X − M = −$500;depreciation = $200;transfer payments = $800,net domestic product is _____.

Which of the following is an example of an intermediate good?

A GDP price index of 100 for a year implies that:

Leakages cause diversion of income from the domestic spending stream.

Which of the following is true of the gross domestic product (GDP)of a nation?

The U.S.Department of Commerce has been developing so-called "green accounting" to:

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.

The consumer price index (CPI)overstates the true inflation rate because it ignores changes in consumers' purchasing patterns as relative prices change.

The existence of the underground economy causes gross domestic product (GDP)statistics to _____.

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

Which of the following is not a component of aggregate expenditure?

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

To determine the consumer price index (CPI),_____.

If the real gross domestic product (GDP)for the base year is $4 trillion,then the nominal gross domestic product (GDP)for that year is _____.

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

The circular flow model shows the flow of:

The consumer price index (CPI)tends to understate the true rate of inflation.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters