Question 1

One difficulty of computing the value of GDP is that there are no market prices for

Accepted Answer

A) exports and imports. 
B) business investments. 
C) government goods and services. 
D) resource values. 
A) exports and imports. 
B) business investments. 
C) government goods and services. 
D) resource values.

Question 2

Which of the following would increase GDP?

Accepted Answer

A) You buy 100 shares of Wal-Mart stock. 
B) Your car is destroyed by a fire,and you purchase a two-year-old car to replace it. 
C) Your car is damaged by a fire,and you hire a mechanic to repair it. 
D) Your car is damaged by a fire,and you reduce the number of hours you work to repair the car yourself. 
A) You buy 100 shares of Wal-Mart stock. 
B) Your car is destroyed by a fire,and you purchase a two-year-old car to replace it. 
C) Your car is damaged by a fire,and you hire a mechanic to repair it. 
D) Your car is damaged by a fire,and you reduce the number of hours you work to repair the car yourself.

Question 3

Last year the Jones family earned $40,000.This year their income is $42,000.In an economy with an inflation rate of 10 percent,which of the following is correct?

Accepted Answer

A) The Jones' nominal income and real income have both fallen. 
B) The Jones' nominal income and real income have both risen. 
C) The Jones' nominal income has increased and their real income has fallen. 
D) The Jones' nominal income has decreased and their real income has risen. 
A) The Jones' nominal income and real income have both fallen. 
B) The Jones' nominal income and real income have both risen. 
C) The Jones' nominal income has increased and their real income has fallen. 
D) The Jones' nominal income has decreased and their real income has risen.

Question 4

The price of a gallon of gasoline was $2.01 in May 2004 compared to 39 cents in 1973.However,the Consumer Price Index was 44.4 in 1973 compared to 189.1 in May 2004 (1980 - 1984 = 100).In terms of the purchasing power of the dollar in 2004,the 1973 price of gasoline was

Accepted Answer

A) $0.39. 
B) $0.44. 
C) $1.66. 
D) $2.15. 
A) $0.39. 
B) $0.44. 
C) $1.66. 
D) $2.15.

Question 5

Which of the following events will increase GDP?

Accepted Answer

A) losing $500 playing blackjack in your dorm 
B) selling an antique writing desk for $500 cash 
C) a burglar stealing your CD player 
D) the police department hiring an extra detective to track down the burglar who stole your CD player 
A) losing $500 playing blackjack in your dorm 
B) selling an antique writing desk for $500 cash 
C) a burglar stealing your CD player 
D) the police department hiring an extra detective to track down the burglar who stole your CD player

Question 6

Which of the following is true about inflation?

Accepted Answer

A) It reduces the cost-of-living of the typical worker. 
B) It is measured by changes in the cost of a typical market basket of goods between time periods. 
C) It causes the purchasing power of a dollar to rise. 
D) It has no effect on real resources. 
A) It reduces the cost-of-living of the typical worker. 
B) It is measured by changes in the cost of a typical market basket of goods between time periods. 
C) It causes the purchasing power of a dollar to rise. 
D) It has no effect on real resources.

Question 7

The real GDP data could be properly thought of as a(n)

Accepted Answer

A) index of our economic well-being. 
B) measure of the total wealth of a nation. 
C) index of total output or productive activity. 
D) index that measures the size of government. 
A) index of our economic well-being. 
B) measure of the total wealth of a nation. 
C) index of total output or productive activity. 
D) index that measures the size of government.

Question 8

Gross private domestic investment

Accepted Answer

A) excludes all investment in the United States by foreign firms. 
B) includes all capital in the United States. 
C) includes net additions to the capital stock plus all new corporate stocks and bonds. 
D) includes business expenditures on new factories,tools,and machinery. 
A) excludes all investment in the United States by foreign firms. 
B) includes all capital in the United States. 
C) includes net additions to the capital stock plus all new corporate stocks and bonds. 
D) includes business expenditures on new factories,tools,and machinery.

Exam 7: Ataking the Nations Economic Pulse

One difficulty of computing the value of GDP is that there are no market prices for

Which of the following would increase GDP?

Last year the Jones family earned $40,000.This year their income is $42,000.In an economy with an inflation rate of 10 percent,which of the following is correct?

The price of a gallon of gasoline was $2.01 in May 2004 compared to 39 cents in 1973.However,the Consumer Price Index was 44.4 in 1973 compared to 189.1 in May 2004 (1980 - 1984 = 100).In terms of the purchasing power of the dollar in 2004,the 1973 price of gasoline was

Which of the following events will increase GDP?

Which of the following is true about inflation?

The real GDP data could be properly thought of as a(n)

Gross private domestic investment

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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