Question 1

Which of the following is the best definition of openness?

Accepted Answer

A)  The average of imports expressed as a share of GDP. 
B)  The average of goods traded in markets expressed as a share of GDP. 
C)  The average of imports and exports expressed as a share of GDP. 
D)  The average trade balance expressed as a share of GDP. 
E)  The average of exports expressed as a share of GDP. 
A)  The average of imports expressed as a share of GDP. 
B)  The average of goods traded in markets expressed as a share of GDP. 
C)  The average of imports and exports expressed as a share of GDP. 
D)  The average trade balance expressed as a share of GDP. 
E)  The average of exports expressed as a share of GDP.

Question 2

A closed economy is one in which exports and imports constitute a large share of GDP.

Accepted Answer

A) True 
 B)False

Question 3

The majority of American workers are employed in the manufacturing sector.

Accepted Answer

A) True 
 B)False

Question 4

Perhaps the best measure of economic progress is

Accepted Answer

A)  the annual inflation rate, since it accounts for what is happening to prices. 
B)  the growth rate of real GDP per capita, since it takes into account both price changes and population growth. 
C)  the amount of working time needed for an individual worker to afford certain goods and services. 
D)  the annual growth rate in the population. 
A)  the annual inflation rate, since it accounts for what is happening to prices. 
B)  the growth rate of real GDP per capita, since it takes into account both price changes and population growth. 
C)  the amount of working time needed for an individual worker to afford certain goods and services. 
D)  the annual growth rate in the population.

Question 5

The typical American family spends about ____ percent of its budget on goods and the remainder on services.

Accepted Answer

A)  22 
B)  32 
C)  66 
D)  80 
A)  22 
B)  32 
C)  66 
D)  80

Question 6

Despite the outlays by the federal and state governments, many observers believe which of the following is true?

Accepted Answer

A)  Public infrastructure, such as bridges and roads, is only adequate. 
B)  Our educational system is lacking. 
C)  Too little is spent on homeland defense. 
D)  All of these are correct. 
A)  Public infrastructure, such as bridges and roads, is only adequate. 
B)  Our educational system is lacking. 
C)  Too little is spent on homeland defense. 
D)  All of these are correct.

Question 7

Which of the following areas employed more workers as of 2016?

Accepted Answer

A)  Educational and health services 
B)  Business and professional services 
C)  Retail trade 
D)  Manufacturing companies 
A)  Educational and health services 
B)  Business and professional services 
C)  Retail trade 
D)  Manufacturing companies

Question 8

A tax must be progressive if an individual with a higher income pays more dollars in taxes than an individual with a lower income.

Accepted Answer

A) True 
 B)False

Question 9

A transfer payment is a sum of money

Accepted Answer

A)  spent by government for new goods and services. 
B)  shifted between members of a household. 
C)  given by government without a good or service in exchange. 
D)  moved between companies for goods and services. 
E)  required to pay taxes. 
A)  spent by government for new goods and services. 
B)  shifted between members of a household. 
C)  given by government without a good or service in exchange. 
D)  moved between companies for goods and services. 
E)  required to pay taxes.

Question 10

Consumer spending accounts for about 50 percent of GDP.

Accepted Answer

A) True 
 B)False

Question 11

The working population of the United States is approximately

Accepted Answer

A)  160 million. 
B)  290 million. 
C)  340 million. 
D)  1.3 billion. 
A)  160 million. 
B)  290 million. 
C)  340 million. 
D)  1.3 billion.

Question 12

The payments to owners of capital include

Accepted Answer

A)  interest and profits. 
B)  debt and taxes. 
C)  wages and salaries. 
D)  expenses and bonuses. 
E)  All of the responses are correct. 
A)  interest and profits. 
B)  debt and taxes. 
C)  wages and salaries. 
D)  expenses and bonuses. 
E)  All of the responses are correct.

Question 13

A recession is a period of time in which the total output of the economy falls.

Accepted Answer

A) True 
 B)False

Question 14

A nation's citizens often dislike the economy's distribution of income. Explain two methods for creating a more equal distribution of income.

Accepted Answer

One method is to override the market dis

Question 15

Spending on items other than consumption represents about what percent of total output of goods and services?

Accepted Answer

A)  20 percent 
B)  30 percent 
C)  40 percent 
D)  60 percent 
A)  20 percent 
B)  30 percent 
C)  40 percent 
D)  60 percent

Question 16

How do the wages in the United States compare to those in northern Europe?

Accepted Answer

A)  U.S. wage rates are higher than those of all northern European nations. 
B)  Northern Europe's average wage rates are higher. 
C)  U.S. wage rates are higher than those in Germany and the Netherlands. 
D)  They are similar. 
A)  U.S. wage rates are higher than those of all northern European nations. 
B)  Northern Europe's average wage rates are higher. 
C)  U.S. wage rates are higher than those in Germany and the Netherlands. 
D)  They are similar.

Question 17

Health and public welfare expenditures account for the largest share of state and local government spending.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true about the United States?

Accepted Answer

A)  There has only been one recession in U.S. history. 
B)  There have been recessions every couple of years throughout U.S. history. 
C)  Recessions have never occurred in the United States. 
D)  Recessions have occurred periodically in U.S. history. 
E)  Recessions in the United States have generally been worse than in other countries. 
A)  There has only been one recession in U.S. history. 
B)  There have been recessions every couple of years throughout U.S. history. 
C)  Recessions have never occurred in the United States. 
D)  Recessions have occurred periodically in U.S. history. 
E)  Recessions in the United States have generally been worse than in other countries.

Question 19

Which of the following is true about the United States?

Accepted Answer

A)  There have been recessions approximately every ten years. 
B)  The pattern of recessions does not occur on a regular basis. 
C)  Periods of economic growth and recessions occur in two-year patterns. 
D)  Recessions always last less than one year. 
E)  Recessions in the United States are generally more severe than they are in other countries. 
A)  There have been recessions approximately every ten years. 
B)  The pattern of recessions does not occur on a regular basis. 
C)  Periods of economic growth and recessions occur in two-year patterns. 
D)  Recessions always last less than one year. 
E)  Recessions in the United States are generally more severe than they are in other countries.

Question 20

The U.S. economy is relatively open in terms of economic activity related to international trade.

Accepted Answer

A) True 
 B)False

Exam 2: The Economy: Myth and Reality

Which of the following is the best definition of openness?

A closed economy is one in which exports and imports constitute a large share of GDP.

The majority of American workers are employed in the manufacturing sector.

Perhaps the best measure of economic progress is

The typical American family spends about ____ percent of its budget on goods and the remainder on services.

Despite the outlays by the federal and state governments, many observers believe which of the following is true?

Which of the following areas employed more workers as of 2016?

A tax must be progressive if an individual with a higher income pays more dollars in taxes than an individual with a lower income.

A transfer payment is a sum of money

Consumer spending accounts for about 50 percent of GDP.

The working population of the United States is approximately

The payments to owners of capital include

A recession is a period of time in which the total output of the economy falls.

A nation's citizens often dislike the economy's distribution of income. Explain two methods for creating a more equal distribution of income.

Spending on items other than consumption represents about what percent of total output of goods and services?

How do the wages in the United States compare to those in northern Europe?

Health and public welfare expenditures account for the largest share of state and local government spending.

Which of the following is true about the United States?

Which of the following is true about the United States?

The U.S. economy is relatively open in terms of economic activity related to international trade.

What Is Economics

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

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