Question 1

A common definition of a recession is a time with

Accepted Answer

A)  a decline in the price level. 
B)  a decline in interest rates. 
C)  a decrease in real GDP for two or more successive quarters. 
D)  a decrease in real GDP for two or more successive years. 
A)  a decline in the price level. 
B)  a decline in interest rates. 
C)  a decrease in real GDP for two or more successive quarters. 
D)  a decrease in real GDP for two or more successive years.

Question 2

Which of the following is TRUE regarding real GDP?
I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices.
II. Real GDP rises whenever inflation occurs.
III. Real GDP does not measure all that is produced.

Accepted Answer

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

Question 3

Goods that are produced this year, stored in inventories, and then sold to consumers next year

Accepted Answer

A)  count in this year's GDP. 
B)  count in next year's GDP. 
C)  count in both this year's and next year's GDP. 
D)  are not counted as a part of GDP. 
A)  count in this year's GDP. 
B)  count in next year's GDP. 
C)  count in both this year's and next year's GDP. 
D)  are not counted as a part of GDP.

Question 4

The largest component of GDP is

Accepted Answer

A)  gross private domestic investment. 
B)  personal consumption expenditures. 
C)  net exports of goods and services. 
D)  government expenditure on goods and services. 
A)  gross private domestic investment. 
B)  personal consumption expenditures. 
C)  net exports of goods and services. 
D)  government expenditure on goods and services.

Question 5

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

Accepted Answer

Gross investment is the total amount spe

Question 6

The following data describe Mexico's economy in 2007. Government spending $210 billion
Investment $210 billion
Exports $272 billion
Imports $283 billion
GDP 1 trillion
Population 110 million
From the data, we can conclude that ________ in Mexico in 2007.

Accepted Answer

A)  consumption totaled $591 billion 
B)  net exports totaled -$11 billion 
C)  GDP per person equaled $2,000 
D)  imports were the largest component of GDP 
A)  consumption totaled $591 billion 
B)  net exports totaled -$11 billion 
C)  GDP per person equaled $2,000 
D)  imports were the largest component of GDP

Question 7

The business cycle refers to

Accepted Answer

A)  fluctuations in the level of real GDP around potential GDP. 
B)  changes in the level of nominal GDP. 
C)  changes in the level of the stock market. 
D)  changes in the level of employment. 
A)  fluctuations in the level of real GDP around potential GDP. 
B)  changes in the level of nominal GDP. 
C)  changes in the level of the stock market. 
D)  changes in the level of employment.

Question 8

Which of the following is NOT part of the expenditure approach to measuring GDP?

Accepted Answer

A)  gross private domestic investment 
B)  net exports of goods and services 
C)  net interest 
D)  personal consumption expenditures 
A)  gross private domestic investment 
B)  net exports of goods and services 
C)  net interest 
D)  personal consumption expenditures

Question 9

Transfer payments are not included in GDP because

Accepted Answer

A)  their market value cannot be accurately determined. 
B)  they do not generate additional income. 
C)  they are not purchases of goods or services. 
D)  their value is included in government expenditure. 
A)  their market value cannot be accurately determined. 
B)  they do not generate additional income. 
C)  they are not purchases of goods or services. 
D)  their value is included in government expenditure.

Question 10

According to the BEA, in the second quarter of 2012 business spending on equipment and software rose by 4.7 percent. Using the expenditure approach, this change increases

Accepted Answer

A)  gross private domestic investment. 
B)  government expenditure on goods and services. 
C)  net exports of goods and services. 
D)  personal consumption expenditures. 
A)  gross private domestic investment. 
B)  government expenditure on goods and services. 
C)  net exports of goods and services. 
D)  personal consumption expenditures.

Question 11

-In the above figure, household income is shown by flow

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  F.

Question 12

Gross domestic product

Accepted Answer

A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period. 
A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period.

Question 13

Why are only final goods and services included in measuring GDP? Give examples to complete your answer.

Accepted Answer

We purposely leave intermediate goods or

Question 14

If we compare the U.S. GDP and the Chinese GDP

Accepted Answer

A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used.

Question 15

How do firms and households interact within the context of the circular flow model?

Accepted Answer

Households are the owners of the factors

Question 16

-Using the data in the table above, what is the value of GDP?

Accepted Answer

A)  $13,516 billion 
B)  $10,679 billion 
C)  $9,541 billion 
D)  $8,403 billion 
A)  $13,516 billion 
B)  $10,679 billion 
C)  $9,541 billion 
D)  $8,403 billion

Question 17

Explain the relationship between potential GDP and real GDP in the United States since the early 1960s. You do not need to tell what happened during any specific year; just describe the general relationship.

Accepted Answer

Potential GDP has grown over t

Question 18

To calculate GDP using the expenditure approach, in part it is necessary to

Accepted Answer

A)  add imports and exports. 
B)  add imports and subtract exports. 
C)  add exports and subtract imports. 
D)  subtract both exports and imports. 
A)  add imports and exports. 
B)  add imports and subtract exports. 
C)  add exports and subtract imports. 
D)  subtract both exports and imports.

Question 19

On January 1, 2017, United Delivery had trucks valued at $1.3 million. During 2017, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2017 was $1.5 million, what is the amount of its net investment and its depreciation during 2017?

Accepted Answer

Net investment is the change in the capi

Question 20

Which of the following is NOT included in the income approach to measuring GDP?

Accepted Answer

A)  net interest 
B)  net exports 
C)  corporate profits 
D)  compensation of employees 
A)  net interest 
B)  net exports 
C)  corporate profits 
D)  compensation of employees

A common definition of a recession is a time with

Which of the following is TRUE regarding real GDP? I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced.

Goods that are produced this year, stored in inventories, and then sold to consumers next year

The largest component of GDP is

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

The following data describe Mexico's economy in 2007. Government spending $210 billion Investment $210 billion Exports $272 billion Imports $283 billion GDP 1 trillion Population 110 million From the data, we can conclude that ________ in Mexico in 2007.

The business cycle refers to

Which of the following is NOT part of the expenditure approach to measuring GDP?

Transfer payments are not included in GDP because

According to the BEA, in the second quarter of 2012 business spending on equipment and software rose by 4.7 percent. Using the expenditure approach, this change increases

-In the above figure, household income is shown by flow

Gross domestic product

Why are only final goods and services included in measuring GDP? Give examples to complete your answer.

If we compare the U.S. GDP and the Chinese GDP

How do firms and households interact within the context of the circular flow model?

-Using the data in the table above, what is the value of GDP?

Explain the relationship between potential GDP and real GDP in the United States since the early 1960s. You do not need to tell what happened during any specific year; just describe the general relationship.

To calculate GDP using the expenditure approach, in part it is necessary to

On January 1, 2017, United Delivery had trucks valued at $1.3 million. During 2017, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2017 was $1.5 million, what is the amount of its net investment and its depreciation during 2017?

Which of the following is NOT included in the income approach to measuring GDP?

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 common definition of a recession is a time with

Which of the following is TRUE regarding real GDP? I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced.

Goods that are produced this year, stored in inventories, and then sold to consumers next year

The largest component of GDP is

Define gross investment and net investment. Discuss the relationship between gross investment and net investment.

The following data describe Mexico's economy in 2007. Government spending $210 billion Investment $210 billion Exports $272 billion Imports $283 billion GDP 1 trillion Population 110 million From the data, we can conclude that ________ in Mexico in 2007.

The business cycle refers to

Which of the following is NOT part of the expenditure approach to measuring GDP?

Transfer payments are not included in GDP because

According to the BEA, in the second quarter of 2012 business spending on equipment and software rose by 4.7 percent. Using the expenditure approach, this change increases

-In the above figure, household income is shown by flow

Gross domestic product

Why are only final goods and services included in measuring GDP? Give examples to complete your answer.

If we compare the U.S. GDP and the Chinese GDP

How do firms and households interact within the context of the circular flow model?

-Using the data in the table above, what is the value of GDP?

Explain the relationship between potential GDP and real GDP in the United States since the early 1960s. You do not need to tell what happened during any specific year; just describe the general relationship.

To calculate GDP using the expenditure approach, in part it is necessary to

On January 1, 2017, United Delivery had trucks valued at $1.3 million. During 2017, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2017 was $1.5 million, what is the amount of its net investment and its depreciation during 2017?

Which of the following is NOT included in the income approach to measuring GDP?

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