Question 1

Real GDP is composed of

Accepted Answer

A)  consumption spending, investment spending, government purchases and transfer payments, and net exports. 
B)  consumption spending, investment spending, government purchases, net exports, minus depreciation. 
C)  consumption spending, investment spending, government purchases, and net exports. 
D)  consumption spending, savings, government purchases, and net exports. 
A)  consumption spending, investment spending, government purchases and transfer payments, and net exports. 
B)  consumption spending, investment spending, government purchases, net exports, minus depreciation. 
C)  consumption spending, investment spending, government purchases, and net exports. 
D)  consumption spending, savings, government purchases, and net exports.

Question 2

If real GDP was $10 trillion and the GDP deflator was 125, nominal GDP would be

Accepted Answer

A)  $1250 trillion. 
B)  $12.50 trillion. 
C)  $9.75 trillion. 
D)  $8 trillion. 
A)  $1250 trillion. 
B)  $12.50 trillion. 
C)  $9.75 trillion. 
D)  $8 trillion.

Question 3

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

Accepted Answer

A)  $100,000, $140,000 
B)  $50,000, $50,400 
C)  $50,000, $52,000 
D)  $100,000, $100,400 
A)  $100,000, $140,000 
B)  $50,000, $50,400 
C)  $50,000, $52,000 
D)  $100,000, $100,400

Question 4

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

Accepted Answer

A)  $20,000, $21,000 
B)  $10,000, $10,400 
C)  $20,000, $20,400 
D)  $10,000, $10,800 
A)  $20,000, $21,000 
B)  $10,000, $10,400 
C)  $20,000, $20,400 
D)  $10,000, $10,800

Question 5

If the risk premium associated with holding stocks decreases at the same time that the real rate of interest decreases, we would

Accepted Answer

A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes. 
A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.

Question 6

NDP (Net Domestic Product) is a measure of the nation's output level that

Accepted Answer

A)  includes gross investment spending and excludes government spending. 
B)  includes net investment spending and excludes depreciation. 
C)  includes net investment spending and excludes change in business inventories. 
D)  includes gross investment spending and excludes net exports. 
A)  includes gross investment spending and excludes government spending. 
B)  includes net investment spending and excludes depreciation. 
C)  includes net investment spending and excludes change in business inventories. 
D)  includes gross investment spending and excludes net exports.

Question 7

To calculate per capita real GDP, one should

Accepted Answer

A)  divide real GDP by the number of employed persons. 
B)  divide real GDP by the labor force. 
C)  divide real GDP by the population. 
D)  divide real GDP by the number of households. 
A)  divide real GDP by the number of employed persons. 
B)  divide real GDP by the labor force. 
C)  divide real GDP by the population. 
D)  divide real GDP by the number of households.

Question 8

If the risk premium associated with holding stocks increases at the same time that the real rate of interest increases, we would

Accepted Answer

A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes. 
A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.

Question 9

Real GDP

Accepted Answer

A)  is the principal measure of material well-being and economic productivity. 
B)  is the principal measure of how far production is falling short of potential output. 
C)  is the proportional rate of change of the price level. 
D)  is the principal determinant of the level of investment, and a principal determinant of future economic growth. 
A)  is the principal measure of material well-being and economic productivity. 
B)  is the principal measure of how far production is falling short of potential output. 
C)  is the proportional rate of change of the price level. 
D)  is the principal determinant of the level of investment, and a principal determinant of future economic growth.

Question 10

If the real interest rate decreases, we would initially expect

Accepted Answer

A)  the price of stocks to decrease. 
B)  the price of bonds to decrease. 
C)  the price of stocks to increase. 
D)  the exchange rate to decrease. 
A)  the price of stocks to decrease. 
B)  the price of bonds to decrease. 
C)  the price of stocks to increase. 
D)  the exchange rate to decrease.

Question 11

If the risk premium associated with holding stocks decreases at the same time that investors become more pessimistic and expect that long-term earnings will decrease, we would

Accepted Answer

A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes. 
A)  initially expect the price of stocks to increase. 
B)  initially expect the price of bonds to decrease. 
C)  initially expect the price of stocks to decrease. 
D)  be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.

Question 12

If nominal GDP in 1998 was $8.7599 trillion; gross private domestic investment spending was $1.5312 trillion; government purchases were $1.5297 trillion; exports were $.9663 trillion; and imports were $1.1159 trillion, the level of consumption expenditures would be

Accepted Answer

A)  $5.8486 trillion. 
B)  $3.6168 trillion. 
C)  $5.5494 trillion. 
D)  $5.6990 trillion. 
A)  $5.8486 trillion. 
B)  $3.6168 trillion. 
C)  $5.5494 trillion. 
D)  $5.6990 trillion.

Question 13

Which of the following would not be considered a component of government expenditures?

Accepted Answer

A)  Construction of a public school. 
B)  Construction of a public highway. 
C)  The purchase of a military aircraft. 
D)  A Social Security check sent to an individual. 
A)  Construction of a public school. 
B)  Construction of a public highway. 
C)  The purchase of a military aircraft. 
D)  A Social Security check sent to an individual.

Question 14

The real value of the stock market sums up all of the following information except

Accepted Answer

A)  the current level of earnings, or profits. 
B)  whether investors are pessimistic or optimistic. 
C)  the level of savings in the economy. 
D)  attitudes toward risk. 
A)  the current level of earnings, or profits. 
B)  whether investors are pessimistic or optimistic. 
C)  the level of savings in the economy. 
D)  attitudes toward risk.

Question 15

Which of the following is not one of the six key variables in macroeconomics?

Accepted Answer

A)  real GDP 
B)  the interest rate 
C)  the level of the stock market 
D)  the price of new houses 
A)  real GDP 
B)  the interest rate 
C)  the level of the stock market 
D)  the price of new houses

Question 16

If nominal GDP was $10 trillion and the GDP deflator was 125, real GDP would be

Accepted Answer

A)  $80 billion ($.08 trillion). 
B)  $1250 trillion. 
C)  $9.75 trillion. 
D)  $8 trillion. 
A)  $80 billion ($.08 trillion). 
B)  $1250 trillion. 
C)  $9.75 trillion. 
D)  $8 trillion.

Question 17

The GDP deflator, which is a Paasche index, tends to ______ the rate of inflation.

Accepted Answer

A)  overstate 
B)  understate 
C)  not affect 
D)  none of the above 
A)  overstate 
B)  understate 
C)  not affect 
D)  none of the above

Question 18

If nominal GDP is equal to $10.5 trillion and real GDP is equal to $9 trillion, the GDP deflator is equal to

Accepted Answer

A)  1.5 
B)  1.167 
C)  .857 
D)  11.67 
A)  1.5 
B)  1.167 
C)  .857 
D)  11.67

Question 19

If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

Accepted Answer

A)  $20,000, $20,500 
B)  $10,000, $11,000 
C)  $20,000, $21,000 
D)  $10,000, $10,800 
A)  $20,000, $20,500 
B)  $10,000, $11,000 
C)  $20,000, $21,000 
D)  $10,000, $10,800

Question 20

If the CPI changes from 120 in one year to 132 the next, the rate of inflation over that time period is

Accepted Answer

A)  12%. 
B)  10%. 
C)  110%. 
D)  1.10%. 
A)  12%. 
B)  10%. 
C)  110%. 
D)  1.10%.

Real GDP is composed of

If real GDP was $10 trillion and the GDP deflator was 125, nominal GDP would be

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.

If the risk premium associated with holding stocks decreases at the same time that the real rate of interest decreases, we would

NDP (Net Domestic Product) is a measure of the nation's output level that

To calculate per capita real GDP, one should

If the risk premium associated with holding stocks increases at the same time that the real rate of interest increases, we would

Real GDP

If the real interest rate decreases, we would initially expect

If the risk premium associated with holding stocks decreases at the same time that investors become more pessimistic and expect that long-term earnings will decrease, we would

If nominal GDP in 1998 was $8.7599 trillion; gross private domestic investment spending was $1.5312 trillion; government purchases were $1.5297 trillion; exports were $.9663 trillion; and imports were $1.1159 trillion, the level of consumption expenditures would be

Which of the following would not be considered a component of government expenditures?

The real value of the stock market sums up all of the following information except

Which of the following is not one of the six key variables in macroeconomics?

If nominal GDP was $10 trillion and the GDP deflator was 125, real GDP would be

The GDP deflator, which is a Paasche index, tends to ______ the rate of inflation.

If nominal GDP is equal to $10.5 trillion and real GDP is equal to $9 trillion, the GDP deflator is equal to

If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.

If the CPI changes from 120 in one year to 132 the next, the rate of inflation over that time period is

Introduction to Macroeconomics

Thinking Like an Economist

The Theory of Economic Growth

The Reality of Economic Growth: History and Prospect

Building Blocks of the Flexible-Price Model

Equilibrium in the Flexible-Price M Odel

Money, Prices, and Inflation

The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

Investment, Net Exports, and Interest Rates: The Is Curve

The Money Market and the LM Curve

The Phillips Curve, Expectations, and Monetary Policy

Stabilization Policy

Budget Balance, National Debt, and Investment

International Economic Policy

Changes in the Macroeconomy and Changes in Macroeconomic Policy

The Future of Macroeconomics

Epilogue

Filters

Exam 2: Measuring the Macroeconomy

Real GDP is composed of

If real GDP was $10 trillion and the GDP deflator was 125, nominal GDP would be

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

If the risk premium associated with holding stocks decreases at the same time that the real rate of interest decreases, we would

NDP (Net Domestic Product) is a measure of the nation's output level that

To calculate per capita real GDP, one should

If the risk premium associated with holding stocks increases at the same time that the real rate of interest increases, we would

Real GDP

If the real interest rate decreases, we would initially expect

If the risk premium associated with holding stocks decreases at the same time that investors become more pessimistic and expect that long-term earnings will decrease, we would

If nominal GDP in 1998 was $8.7599 trillion; gross private domestic investment spending was $1.5312 trillion; government purchases were $1.5297 trillion; exports were $.9663 trillion; and imports were $1.1159 trillion, the level of consumption expenditures would be

Which of the following would not be considered a component of government expenditures?

The real value of the stock market sums up all of the following information except

Which of the following is not one of the six key variables in macroeconomics?

If nominal GDP was $10 trillion and the GDP deflator was 125, real GDP would be

The GDP deflator, which is a Paasche index, tends to ______ the rate of inflation.

If nominal GDP is equal to $10.5 trillion and real GDP is equal to $9 trillion, the GDP deflator is equal to

If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

If the CPI changes from 120 in one year to 132 the next, the rate of inflation over that time period is

Introduction to Macroeconomics

Thinking Like an Economist

The Theory of Economic Growth

The Reality of Economic Growth: History and Prospect

Building Blocks of the Flexible-Price Model

Equilibrium in the Flexible-Price M Odel

Money, Prices, and Inflation

The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

Investment, Net Exports, and Interest Rates: The Is Curve

The Money Market and the LM Curve

The Phillips Curve, Expectations, and Monetary Policy

Stabilization Policy

Budget Balance, National Debt, and Investment

International Economic Policy

Changes in the Macroeconomy and Changes in Macroeconomic Policy

The Future of Macroeconomics

Epilogue

Filters

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.

If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.

If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _ a year ago would be equivalent to ___ at the current price level.