Question 1

When calculating GDP,underground economic activity is

Accepted Answer

A)  the production of goods and services in the home. 
B)  that portion of the time when we are enjoying leisure activities and not producing marketable goods. 
C)  the part of the economy purposely hidden. 
D)  an aspect of the quality of life, such as health and life expectancy. 
A)  the production of goods and services in the home. 
B)  that portion of the time when we are enjoying leisure activities and not producing marketable goods. 
C)  the part of the economy purposely hidden. 
D)  an aspect of the quality of life, such as health and life expectancy.

Question 2

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

Accepted Answer

GDP is the value of the final goods and

Question 3

-In the above figure,a trough is at point ________ and a peak is at point ________.

Accepted Answer

A)  a; b 
B)  b; c 
C)  b; a 
D)  d; c 
A)  a; b 
B)  b; c 
C)  b; a 
D)  d; c

Question 4

$$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP } \
\text { (trillions of yen) }
\end{array} \
\hline 1991 & 478 \
\hline 1992 & 483 \
\hline 1993 & 484 \
\hline 1994 & 489 \
\hline 1995 & 499 \
\hline 1996 & 516 \
\hline 1997 & 525 \
\hline 1998 & 519 \
\hline 1999 & 520 \
\hline 2000 & 534 \
\hline 2001 & 536 \
\hline
\end{array}$$
-The table above shows Japan's real GDP between 1991 to 2001.
a) Draw a figure with Japan's real GDP from 1991 to 2001.
b) In the previous 30 years,the growth rate of Japan's potential GDP was 6 percent a year.On your graph,show the path that potential GDP would have followed if its GDP in 1991 was equal to potential GDP and the growth rate of potential GDP had been maintained in 1991-2001.
c) Show the Lucas wedge on your figure.

Accepted Answer

@#IMG-DLM& 
a)See the figure above.
b)Potential GD

Question 5

Which of the following is a component of the incomes approach to GDP?

Accepted Answer

A)  consumption expenditure 
B)  wages and salaries 
C)  investment 
D)  government expenditure on goods and services 
A)  consumption expenditure 
B)  wages and salaries 
C)  investment 
D)  government expenditure on goods and services

Question 6

Of the following,which is correct?

Accepted Answer

A)  Nominal GDP does not change when the production of goods and services increases. 
B)  Nominal GDP is not affected by changes in prices of goods and services. 
C)  Nominal GDP increases when the prices of goods and services increase. 
D)  Real GDP changes only when the prices of goods and services really change. 
A)  Nominal GDP does not change when the production of goods and services increases. 
B)  Nominal GDP is not affected by changes in prices of goods and services. 
C)  Nominal GDP increases when the prices of goods and services increase. 
D)  Real GDP changes only when the prices of goods and services really change.

Question 7

Comparing aggregate expenditure and aggregate incomes shows that

Accepted Answer

A)  aggregate expenditure is usually greater than aggregate income. 
B)  aggregate income is usually greater than aggregate expenditure. 
C)  they are equal. 
D)  aggregate income can not equal aggregate expenditure if we have any savings. 
A)  aggregate expenditure is usually greater than aggregate income. 
B)  aggregate income is usually greater than aggregate expenditure. 
C)  they are equal. 
D)  aggregate income can not equal aggregate expenditure if we have any savings.

Question 8

Which of the following is NOT one of the components for computing GDP based upon the income approach?

Accepted Answer

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

Question 9

The largest component of national income is

Accepted Answer

A)  compensation of employees. 
B)  rental income. 
C)  corporate profits. 
D)  proprietors' income. 
A)  compensation of employees. 
B)  rental income. 
C)  corporate profits. 
D)  proprietors' income.

Question 10

An expansion

Accepted Answer

A)  follows a peak. 
B)  is defined as a period of negative real GDP growth. 
C)  comes just before a trough. 
D)  is defined as a period of real GDP increases. 
A)  follows a peak. 
B)  is defined as a period of negative real GDP growth. 
C)  comes just before a trough. 
D)  is defined as a period of real GDP increases.

Question 11

Which type of graph is used to identify trends?

Accepted Answer

A)  time-series 
B)  scatter diagram 
C)  cross-section 
D)  None of the above answers is correct. 
A)  time-series 
B)  scatter diagram 
C)  cross-section 
D)  None of the above answers is correct.

Question 12

How does the production of a U.S.firm located in France affect U.S.GDP?
How does the production of a French firm located in Ohio affect U.S.GDP?

Accepted Answer

U.S.GDP includes all production in the U

Question 13

Which of the following is NOT included in real GDP?

Accepted Answer

A)  production of services, such as the services of doctors 
B)  production of goods that last more than one year, such as television sets 
C)  production of goods that do not last more than one year, such as gasoline 
D)  production in the home 
A)  production of services, such as the services of doctors 
B)  production of goods that last more than one year, such as television sets 
C)  production of goods that do not last more than one year, such as gasoline 
D)  production in the home

Question 14

Which of the following is included in the government expenditure component of the expenditure approach to GDP?

Accepted Answer

A)  state government expenditure on local schools 
B)  transfer payments 
C)  changes in inventories 
D)  taxes 
A)  state government expenditure on local schools 
B)  transfer payments 
C)  changes in inventories 
D)  taxes

Question 15

Household production is not measured in the GDP.

Accepted Answer

A) True 
 B)False

Question 16

Potential GDP is the

Accepted Answer

A)  the maximum amount of production that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation. 
B)  current value of production in the economy. 
C)  value of production when the economy is in a recession. 
D)  value of production when the economy is at a peak. 
A)  the maximum amount of production that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation. 
B)  current value of production in the economy. 
C)  value of production when the economy is in a recession. 
D)  value of production when the economy is at a peak.

Question 17

-On a time-series graph,time is typically shown

Accepted Answer

A)  as an area. 
B)  along the x-axis. 
C)  along the y-axis. 
D)  as an implicit variable held constant. 
A)  as an area. 
B)  along the x-axis. 
C)  along the y-axis. 
D)  as an implicit variable held constant.

Question 18

Reported GDP increases when,in fact,total production is unchanged when I. there is a shift from household production to market production.
II) a previously illegal activity is legalized.

Accepted Answer

A)  i only 
B)  II only 
C)  Neither i nor II 
D)  Both i and II. 
A)  i only 
B)  II only 
C)  Neither i nor II 
D)  Both i and II.

Question 19

In any year,real GDP

Accepted Answer

A)  must always be less than potential GDP. 
B)  might be greater or less than potential GDP. 
C)  will always be greater than potential GDP because of the tendency of nations to incur inflation. 
D)  always equals potential GDP. 
A)  must always be less than potential GDP. 
B)  might be greater or less than potential GDP. 
C)  will always be greater than potential GDP because of the tendency of nations to incur inflation. 
D)  always equals potential GDP.

Question 20

A time-series graph displays the price of copper.The slope of the line is negative for periods when the

Accepted Answer

A)  price of copper is falling. 
B)  price of copper is rising. 
C)  quantity of copper is falling. 
D)  price of copper is low and not changing. 
A)  price of copper is falling. 
B)  price of copper is rising. 
C)  quantity of copper is falling. 
D)  price of copper is low and not changing.

When calculating GDP,underground economic activity is

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

-In the above figure,a trough is at point and a peak is at point .

Which of the following is a component of the incomes approach to GDP?

Of the following,which is correct?

Comparing aggregate expenditure and aggregate incomes shows that

Which of the following is NOT one of the components for computing GDP based upon the income approach?

The largest component of national income is

An expansion

Which type of graph is used to identify trends?

How does the production of a U.S.firm located in France affect U.S.GDP? How does the production of a French firm located in Ohio affect U.S.GDP?

Which of the following is NOT included in real GDP?

Which of the following is included in the government expenditure component of the expenditure approach to GDP?

Household production is not measured in the GDP.

Potential GDP is the

-On a time-series graph,time is typically shown

Reported GDP increases when,in fact,total production is unchanged when I. there is a shift from household production to market production. II) a previously illegal activity is legalized.

In any year,real GDP

A time-series graph displays the price of copper.The slope of the line is negative for periods when the

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

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 4: Measuring GDP and Economic Growth

When calculating GDP,underground economic activity is

What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?

-In the above figure,a trough is at point ________ and a peak is at point ________.

Which of the following is a component of the incomes approach to GDP?

Of the following,which is correct?

Comparing aggregate expenditure and aggregate incomes shows that

Which of the following is NOT one of the components for computing GDP based upon the income approach?

The largest component of national income is

An expansion

Which type of graph is used to identify trends?

How does the production of a U.S.firm located in France affect U.S.GDP? How does the production of a French firm located in Ohio affect U.S.GDP?

Which of the following is NOT included in real GDP?

Which of the following is included in the government expenditure component of the expenditure approach to GDP?

Household production is not measured in the GDP.

Potential GDP is the

-On a time-series graph,time is typically shown

Reported GDP increases when,in fact,total production is unchanged when I. there is a shift from household production to market production. II) a previously illegal activity is legalized.

In any year,real GDP

A time-series graph displays the price of copper.The slope of the line is negative for periods when the

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

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

-In the above figure,a trough is at point and a peak is at point .