Question 1

Which of the following is not true about the composition of GDP in 2010?

Accepted Answer

A)  The majority of consumer spending is on durable goods. 
B)  Purchases made by state and local governments are greater than purchases made by the federal government. 
C)  Imports are greater than exports. 
D)  Business fixed investment is the largest component of investment. 
A)  The majority of consumer spending is on durable goods. 
B)  Purchases made by state and local governments are greater than purchases made by the federal government. 
C)  Imports are greater than exports. 
D)  Business fixed investment is the largest component of investment.

Question 2

Table 19-3
  
-Refer to Table 19-3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

Accepted Answer

A)  $2,200. 
B)  $1,600. 
C)  $1,400. 
D)  $1,200. 
A)  $2,200. 
B)  $1,600. 
C)  $1,400. 
D)  $1,200.

Question 3

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

Accepted Answer

A)  simply counts the total number of goods produced in the market place and then adds them up. 
B)  values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C)  simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D)  values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. 
A)  simply counts the total number of goods produced in the market place and then adds them up. 
B)  values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C)  simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D)  values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.

Question 4

Table 19-7
  
-Refer to Table 19-7.Suppose that a simple economy produces only four goods and services: sweaters,CDs,sugar,and soft drinks.Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households.Calculate nominal GDP for this simple economy.

Accepted Answer

Nominal GDP equals (

Question 5

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

Accepted Answer

A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0. 
A)  equal to 100. 
B)  greater than 100. 
C)  less than 100. 
D)  less than 0.

Question 6

If prices in the economy rise,then

Accepted Answer

A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined. 
A)  the purchasing power of a dollar rises. 
B)  the purchasing power of a dollar stays constant. 
C)  the purchasing power of a dollar declines. 
D)  the purchasing power of a dollar cannot be determined.

Question 7

Macroeconomics seeks to understand

Accepted Answer

A)  economic growth, business cycles, and inflation. 
B)  industry sales, marketing strategies and corporate growth. 
C)  product demand, product cost, and profit maximization. 
D)  public choices, private choices, and consumer maximization. 
A)  economic growth, business cycles, and inflation. 
B)  industry sales, marketing strategies and corporate growth. 
C)  product demand, product cost, and profit maximization. 
D)  public choices, private choices, and consumer maximization.

Question 8

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Accepted Answer

A) True 
 B)False

Question 9

Legalizing all forms of illegal activities

Accepted Answer

A)  reduces GDP and the size of the underground economy. 
B)  reduces GDP and increases the size of the underground economy. 
C)  increases GDP and reduces the size of the underground economy. 
D)  increases GDP and increases the size of the underground economy. 
A)  reduces GDP and the size of the underground economy. 
B)  reduces GDP and increases the size of the underground economy. 
C)  increases GDP and reduces the size of the underground economy. 
D)  increases GDP and increases the size of the underground economy.

Question 10

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Accepted Answer

A) True 
 B)False

Question 11

Gross domestic product is calculated by summing up

Accepted Answer

A)  the total quantity of goods and services in the economy. 
B)  the total quantity of goods and services produced in the economy during a period of time. 
C)  the total market value of goods and services in the economy. 
D)  the total market value of final goods and services produced in the economy during a period of time. 
A)  the total quantity of goods and services in the economy. 
B)  the total quantity of goods and services produced in the economy during a period of time. 
C)  the total market value of goods and services in the economy. 
D)  the total market value of final goods and services produced in the economy during a period of time.

Question 12

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

Accepted Answer

If inflation and income grow at the same

Question 13

In 2010,which component of GDP had a negative value?

Accepted Answer

A)  consumption 
B)  investment 
C)  government spending 
D)  net exports 
A)  consumption 
B)  investment 
C)  government spending 
D)  net exports

Question 14

The purchase by a household in China of a CD produced in the United States is included in U.S.

Accepted Answer

A)  consumption expenditures. 
B)  investment expenditures. 
C)  government purchases. 
D)  net exports. 
A)  consumption expenditures. 
B)  investment expenditures. 
C)  government purchases. 
D)  net exports.

Question 15

Investment,as defined by economists,would not include which of the following? Ford

Accepted Answer

A)  buys a new robotic machine (from a plant in Ohio) to assemble cars. 
B)  adds 1,000 new cars to inventories. 
C)  builds another assembly plant in the United States. 
D)  buys U.S. government bonds. 
A)  buys a new robotic machine (from a plant in Ohio) to assemble cars. 
B)  adds 1,000 new cars to inventories. 
C)  builds another assembly plant in the United States. 
D)  buys U.S. government bonds.

Question 16

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Accepted Answer

A)  employment in a specific industry. 
B)  employment in the economy. 
C)  output of a specific firm. 
D)  output of a specific industry. 
A)  employment in a specific industry. 
B)  employment in the economy. 
C)  output of a specific firm. 
D)  output of a specific industry.

Question 17

Over the last 50 years,has the ratio of household production to gross domestic product in the United States increased or decreased? Consider the effect of the increased number of women working outside the home,and the effect of advances in technology in household production such as microwaves,coffee makers,power tools,etc.

Accepted Answer

"Household production" refers to goods a

Question 18

Which of the following statements is true?

Accepted Answer

A)  A decrease in the crime rate increases GDP as people will spend more on security. 
B)  Household production is counted in GDP as it amounts to real production. 
C)  GDP accounting rules do not adjust for production that pollutes the economy. 
D)  GDP growth distributes income equally to people in the economy. 
A)  A decrease in the crime rate increases GDP as people will spend more on security. 
B)  Household production is counted in GDP as it amounts to real production. 
C)  GDP accounting rules do not adjust for production that pollutes the economy. 
D)  GDP growth distributes income equally to people in the economy.

Question 19

The output of Mexican citizens who work in Texas would be included in the

Accepted Answer

A)  gross domestic product of Mexico. 
B)  gross national product of Mexico. 
C)  gross national product of the United States. 
D)  net national product of the United States. 
A)  gross domestic product of Mexico. 
B)  gross national product of Mexico. 
C)  gross national product of the United States. 
D)  net national product of the United States.

Question 20

An example of business fixed investment spending is

Accepted Answer

A)  a purchase of a home by a household. 
B)  a purchase of a computer by an accounting firm. 
C)  a purchase of a bond by General Electric Corporation. 
D)  $200 million of unsold cars at a car dealership. 
A)  a purchase of a home by a household. 
B)  a purchase of a computer by an accounting firm. 
C)  a purchase of a bond by General Electric Corporation. 
D)  $200 million of unsold cars at a car dealership.

Which of the following is not true about the composition of GDP in 2010?

Table 19-3 -Refer to Table 19-3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

If prices in the economy rise,then

Macroeconomics seeks to understand

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Legalizing all forms of illegal activities

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Gross domestic product is calculated by summing up

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

In 2010,which component of GDP had a negative value?

The purchase by a household in China of a CD produced in the United States is included in U.S.

Investment,as defined by economists,would not include which of the following? Ford

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Which of the following statements is true?

The output of Mexican citizens who work in Texas would be included in the

An example of business fixed investment spending is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 8: Gdp: Measuring Total Production and Income

Which of the following is not true about the composition of GDP in 2010?

Table 19-3 -Refer to Table 19-3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

In calculating gross domestic product,the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.This means that the BEA

If nominal GDP exceeds real GDP for a specific year,then the GDP deflator must be

If prices in the economy rise,then

Macroeconomics seeks to understand

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Legalizing all forms of illegal activities

Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.

Gross domestic product is calculated by summing up

People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power.If inflation and income grow at the same rate,is this complaint valid? Explain carefully.

In 2010,which component of GDP had a negative value?

The purchase by a household in China of a CD produced in the United States is included in U.S.

Investment,as defined by economists,would not include which of the following? Ford

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Which of the following statements is true?

The output of Mexican citizens who work in Texas would be included in the

An example of business fixed investment spending is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters