Question 1

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

Accepted Answer

A)  falling. 
B)  rising. 
C)  high but not rising any higher. 
D)  low. 
A)  falling. 
B)  rising. 
C)  high but not rising any higher. 
D)  low.

Question 2

A trend is a general tendency for a variable to increase or decrease over time.

Accepted Answer

A) True 
 B)False

Question 3

The term "business cycle" most closely refers to the

Accepted Answer

A)  fluctuating profits of firms. 
B)  fiscal year. 
C)  accounting period used by firms. 
D)  alternating periods of expansions and recessions. 
A)  fluctuating profits of firms. 
B)  fiscal year. 
C)  accounting period used by firms. 
D)  alternating periods of expansions and recessions.

Question 4

-In the above figure, flow B represents households'

Accepted Answer

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

Question 5

When a recession ends, the turning point that immediately follows is called a

Accepted Answer

A)  trough. 
B)  peak. 
C)  depression. 
D)  None of the above answers is correct. 
A)  trough. 
B)  peak. 
C)  depression. 
D)  None of the above answers is correct.

Question 6

In the circular flow of economic activity

Accepted Answer

A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets. 
A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets.

Question 7

Which of the following is not a final good?

Accepted Answer

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

Question 8

What is a business cycle?

Accepted Answer

The business cycle is the recurrent but

Question 9

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

Accepted Answer

The statement is false. Factors other th

Question 10

List and discuss various types of goods and services omitted from measured GDP.

Accepted Answer

Household production, such as preparing

Question 11

Define and discuss GDP.

Accepted Answer

GDP is the market value of all final goo

Question 12

Which of the following would lead GDP to overstate economic welfare?

Accepted Answer

A)  the existence of home-cooked meals 
B)  restaurant workers that under-report tip income 
C)  a self-employed CPA who takes a longer than normal vacation 
D)  electric utilities that switch to burning coal because of higher natural gas prices and thereby create more acid rain pollution 
A)  the existence of home-cooked meals 
B)  restaurant workers that under-report tip income 
C)  a self-employed CPA who takes a longer than normal vacation 
D)  electric utilities that switch to burning coal because of higher natural gas prices and thereby create more acid rain pollution

Question 13

Which of the following is not a phase or turning point of the business cycle?

Accepted Answer

A)  recession 
B)  expansion 
C)  shutdown 
D)  trough 
A)  recession 
B)  expansion 
C)  shutdown 
D)  trough

Question 14

The difference between gross investment and net investment is

Accepted Answer

A)  the capital stock. 
B)  depreciation. 
C)  the real interest rate. 
D)  equal to saving. 
A)  the capital stock. 
B)  depreciation. 
C)  the real interest rate. 
D)  equal to saving.

Question 15

________ is gross investment minus ________.

Accepted Answer

A)  The capital stock; net investment 
B)  The capital stock; depreciation 
C)  Depreciation; replacement investment 
D)  Net investment; depreciation 
A)  The capital stock; net investment 
B)  The capital stock; depreciation 
C)  Depreciation; replacement investment 
D)  Net investment; depreciation

Question 16

On a time-series graph with a ratio scale

Accepted Answer

A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend. 
A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend.

Question 17

Aggregate expenditures include all of the following EXCEPT

Accepted Answer

A)  consumption of food. 
B)  purchases of intermediate goods. 
C)  purchases of a piece of capital equipment. 
D)  purchases of guns by the government. 
A)  consumption of food. 
B)  purchases of intermediate goods. 
C)  purchases of a piece of capital equipment. 
D)  purchases of guns by the government.

Question 18

Which of the following expressions equals GDP?

Accepted Answer

A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies 
A)  compensation of employees + consumption + depreciation + net investment 
B)  compensation of employees + net interest + rental income + depreciation + corporate profits + proprietors' income + indirect taxes - subsidies 
C)  compensation of employees + net exports + depreciation + corporate profits 
D)  compensation of employees + gross investment + rental income + depreciation + corporate profits + indirect taxes - subsidies

Question 19

The relationship between real GDP and potential GDP is that

Accepted Answer

A)  real GDP always equals potential GDP. 
B)  real GDP never equals potential GDP. 
C)  real GDP fluctuates about potential GDP. 
D)  real GDP is always below potential GDP. 
A)  real GDP always equals potential GDP. 
B)  real GDP never equals potential GDP. 
C)  real GDP fluctuates about potential GDP. 
D)  real GDP is always below potential GDP.

Question 20

In the circular flow diagram, aggregate expenditure includes

Accepted Answer

A)  consumption expenditure, saving, investment and government expenditure. 
B)  consumption expenditure, saving, investment and net exports. 
C)  consumption expenditure, investment, government expenditure and net exports. 
D)  consumption expenditure, saving, government expenditure and net exports. 
A)  consumption expenditure, saving, investment and government expenditure. 
B)  consumption expenditure, saving, investment and net exports. 
C)  consumption expenditure, investment, government expenditure and net exports. 
D)  consumption expenditure, saving, government expenditure and net exports.

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

A trend is a general tendency for a variable to increase or decrease over time.

The term "business cycle" most closely refers to the

-In the above figure, flow B represents households'

When a recession ends, the turning point that immediately follows is called a

In the circular flow of economic activity

Which of the following is not a final good?

What is a business cycle?

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

List and discuss various types of goods and services omitted from measured GDP.

Define and discuss GDP.

Which of the following would lead GDP to overstate economic welfare?

Which of the following is not a phase or turning point of the business cycle?

The difference between gross investment and net investment is

is gross investment minus .

On a time-series graph with a ratio scale

Aggregate expenditures include all of the following EXCEPT

Which of the following expressions equals GDP?

The relationship between real GDP and potential GDP is that

In the circular flow diagram, aggregate expenditure includes

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring Gdp and Economic Growth

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

A trend is a general tendency for a variable to increase or decrease over time.

The term "business cycle" most closely refers to the

-In the above figure, flow B represents households'

When a recession ends, the turning point that immediately follows is called a

In the circular flow of economic activity

Which of the following is not a final good?

What is a business cycle?

"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer.

List and discuss various types of goods and services omitted from measured GDP.

Define and discuss GDP.

Which of the following would lead GDP to overstate economic welfare?

Which of the following is not a phase or turning point of the business cycle?

The difference between gross investment and net investment is

________ is gross investment minus ________.

On a time-series graph with a ratio scale

Aggregate expenditures include all of the following EXCEPT

Which of the following expressions equals GDP?

The relationship between real GDP and potential GDP is that

In the circular flow diagram, aggregate expenditure includes

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

is gross investment minus .