Question 1

A loaf of bread purchased by one of your instructors would be best described as

Accepted Answer

A)  an intermediate good. 
B)  a financial asset. 
C)  a used good. 
D)  a final good. 
A)  an intermediate good. 
B)  a financial asset. 
C)  a used good. 
D)  a final good.

Question 2

Suppose the country of Dingo experienced an economic trough in January 2011.We can conclude that

Accepted Answer

A)  real GDP in Dingo was increasing in January 2011. 
B)  an expansion occurred after January 2011. 
C)  Dingo did not experience a recession in 2010. 
D)  Dingo's potential GDP fell in 2011. 
A)  real GDP in Dingo was increasing in January 2011. 
B)  an expansion occurred after January 2011. 
C)  Dingo did not experience a recession in 2010. 
D)  Dingo's potential GDP fell in 2011.

Question 3

Real GDP is

Accepted Answer

A)  an increase in the average level of prices. 
B)  the value of total production when the unemployment rate is 6 percent. 
C)  the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year. 
D)  the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced. 
A)  an increase in the average level of prices. 
B)  the value of total production when the unemployment rate is 6 percent. 
C)  the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year. 
D)  the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced.

Question 4

$\begin{array}{c}
\begin{array}{|l|}
\hline\
 \text {Component}\
\hline \text {Net taxes}\
\hline \text {Personal consumption}\
\text {expenditure}\
\hline \text {Depreciation}\
\hline \text {Government expenditure}\
\hline \text {Gross investment}\
\hline \text {Net exports}\
\hline \text {Compensation of}\
\text {employees}\
\hline 
\end{array}
\begin{array}{c|}
\hline \text { Amount }\
\text { (dollars) } \
\hline 10 \
\hline\
 50 \
\hline 8 \
\hline 20 \
\hline 26 \
\hline-10 \
\hline\
 65\
\hline
\end{array}
\end{array}$

-Using the information in the table above,calculate gross domestic product.

Accepted Answer

A)  $118 
B)  $108 
C)  $86 
D)  $78 
A)  $118 
B)  $108 
C)  $86 
D)  $78

Question 5

Which of the following is not a final good?

Accepted Answer

A)  a new computer sold to an NYU student 
B)  a new car sold to Avis for use in their fleet of rental cars 
C)  a purse sold to a foreign visitor 
D)  a hot dog sold to a spectator at a Chicago Bears football game 
A)  a new computer sold to an NYU student 
B)  a new car sold to Avis for use in their fleet of rental cars 
C)  a purse sold to a foreign visitor 
D)  a hot dog sold to a spectator at a Chicago Bears football game

Question 6

The word "final" in the definition of GDP refers to

Accepted Answer

A)  not counting intermediate goods or services. 
B)  the time period when production took place. 
C)  valuing production at market prices. 
D)  counting the intermediate goods and services used to produce GDP. 
A)  not counting intermediate goods or services. 
B)  the time period when production took place. 
C)  valuing production at market prices. 
D)  counting the intermediate goods and services used to produce GDP.

Question 7

"When a company's depreciation is larger than its gross investment,net investment becomes negative and the firm's capital stock decreases." Is the previous statement correct or incorrect?
Explain your answer.

Accepted Answer

The statement is correct.Net investment

Question 8

What kind of information is conveyed in a time-series graph?

Accepted Answer

A time series graph reveals four types o

Question 9

List the components of the expenditure approach to measuring GDP.

Accepted Answer

The expenditure approach measures GDP by

Question 10

Government expenditures included in the expenditure approach to GDP include ________.

Accepted Answer

A)  social security and education 
B)  net exports 
C)  buying a new bomber 
D)  Both answers A and C are correct 
A)  social security and education 
B)  net exports 
C)  buying a new bomber 
D)  Both answers A and C are correct

Question 11

Gross domestic product (GDP) is

Accepted Answer

A)  the value of all final goods and services produced in a country during a year. 
B)  the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports. 
C)  the sum of compensation of employees, proprietors' income, net interest, rental income, corporate profits, depreciation, and indirect business taxes minus subsidies. 
D)  all of the above 
A)  the value of all final goods and services produced in a country during a year. 
B)  the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports. 
C)  the sum of compensation of employees, proprietors' income, net interest, rental income, corporate profits, depreciation, and indirect business taxes minus subsidies. 
D)  all of the above

Question 12

$$\begin{array} { | l | c | } 
\hline { \text { Component } } & \begin{array} { c } 
\text { Amount } \
\text { (billions of } \
\text { dollars) }
\end{array} \
\hline \text { Personal consumption } & 3,720 \
 \text { expenditure } \
\hline \text { Government }& 430   \
\text { expenditure } &  \
\hline \text { Gross investment } &610 \
\hline \text { Net investment } & 520 \
\hline \text { Exports } &   650\
\hline \text { Imports } &720 \
\hline
\end{array}$$
-Using the information in the table above,net exports equals

Accepted Answer

A)  $1,370 billion. 
B)  $650 billion. 
C)  $20 billion. 
D)  -$70 billion. 
A)  $1,370 billion. 
B)  $650 billion. 
C)  $20 billion. 
D)  -$70 billion.

Question 13

Gross domestic product can be calculated

Accepted Answer

A)  either by valuing the nation's output of goods and services or by valuing the income generated in the production process. 
B)  by adding up the personal consumption of all members of the society. 
C)  by adding up the value of all intermediate goods used in the economy. 
D)  by adding up the income tax returns of all members of the society. 
A)  either by valuing the nation's output of goods and services or by valuing the income generated in the production process. 
B)  by adding up the personal consumption of all members of the society. 
C)  by adding up the value of all intermediate goods used in the economy. 
D)  by adding up the income tax returns of all members of the society.

Question 14

Looking at the components of the income approach we see that

Accepted Answer

A)  compensation of employees is the largest category. 
B)  consumption is the largest category. 
C)  profits are the largest category. 
D)  rental income is the largest category. 
A)  compensation of employees is the largest category. 
B)  consumption is the largest category. 
C)  profits are the largest category. 
D)  rental income is the largest category.

Question 15

What must be done to net domestic product at factor cost in order to transform it to gross domestic product?
Explain why these adjustments are necessary.

Accepted Answer

Several adjustments must be made to net

Question 16

An expansion ends when the economy

Accepted Answer

A)  hits a trough and then enters a recession. 
B)  hits a peak and then enters a recession. 
C)  begins to grow following a peak. 
D)  has grown for two quarters in a row. 
A)  hits a trough and then enters a recession. 
B)  hits a peak and then enters a recession. 
C)  begins to grow following a peak. 
D)  has grown for two quarters in a row.

Question 17

Which of the following is TRUE regarding business cycles?
I. Cycles are predictable.
II. In each cycle,a peak follows an expansion.
III. Potential GDP fluctuates around real GDP.

Accepted Answer

A)  I and II 
B)  I and III 
C)  II and III 
D)  II only 
A)  I and II 
B)  I and III 
C)  II and III 
D)  II only

Question 18

In the expenditure approach to GDP,the largest component is

Accepted Answer

A)  government expenditure on goods and services. 
B)  personal consumption expenditures. 
C)  gross private domestic investment. 
D)  net exports. 
A)  government expenditure on goods and services. 
B)  personal consumption expenditures. 
C)  gross private domestic investment. 
D)  net exports.

Question 19

The circular flow diagram shows only the aggregate expenditures measure of GDP.

Accepted Answer

A) True 
 B)False

Question 20

If a larger fraction of the adult population is working in the marketplace,household production

Accepted Answer

A)  counted in real GDP increases. 
B)  not counted in real GDP increases. 
C)  counted in real GDP decreases. 
D)  not counted in real GDP decreases. 
A)  counted in real GDP increases. 
B)  not counted in real GDP increases. 
C)  counted in real GDP decreases. 
D)  not counted in real GDP decreases.

A loaf of bread purchased by one of your instructors would be best described as

Suppose the country of Dingo experienced an economic trough in January 2011.We can conclude that

Real GDP is

Component Net taxes Personal consumption expenditure Depreciation Government expenditure Gross investment Net exports Compensation of employees Amount (dollars) 10 50 8 20 26 -10 65 -Using the information in the table above,calculate gross domestic product.

Which of the following is not a final good?

The word "final" in the definition of GDP refers to

"When a company's depreciation is larger than its gross investment,net investment becomes negative and the firm's capital stock decreases." Is the previous statement correct or incorrect? Explain your answer.

What kind of information is conveyed in a time-series graph?

List the components of the expenditure approach to measuring GDP.

Government expenditures included in the expenditure approach to GDP include ________.

Gross domestic product (GDP) is

Component Amount (billions of dollars) Personal consumption 3,720 expenditure Government 430 expenditure Gross investment 610 Net investment 520 Exports 650 Imports 720 -Using the information in the table above,net exports equals

Gross domestic product can be calculated

Looking at the components of the income approach we see that

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

An expansion ends when the economy

Which of the following is TRUE regarding business cycles? I. Cycles are predictable. II. In each cycle,a peak follows an expansion. III. Potential GDP fluctuates around real GDP.

In the expenditure approach to GDP,the largest component is

The circular flow diagram shows only the aggregate expenditures measure of GDP.

If a larger fraction of the adult population is working in the marketplace,household production

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

A loaf of bread purchased by one of your instructors would be best described as

Suppose the country of Dingo experienced an economic trough in January 2011.We can conclude that

Real GDP is

Component Net taxes Personal consumption expenditure Depreciation Government expenditure Gross investment Net exports Compensation of employees Amount (dollars) 10 50 8 20 26 -10 65 -Using the information in the table above,calculate gross domestic product.

Which of the following is not a final good?

The word "final" in the definition of GDP refers to

"When a company's depreciation is larger than its gross investment,net investment becomes negative and the firm's capital stock decreases." Is the previous statement correct or incorrect? Explain your answer.

What kind of information is conveyed in a time-series graph?

List the components of the expenditure approach to measuring GDP.

Government expenditures included in the expenditure approach to GDP include ________.

Gross domestic product (GDP) is

Component Amount (billions of dollars) Personal consumption 3,720 expenditure Government 430 expenditure Gross investment 610 Net investment 520 Exports 650 Imports 720 -Using the information in the table above,net exports equals

Gross domestic product can be calculated

Looking at the components of the income approach we see that

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

An expansion ends when the economy

Which of the following is TRUE regarding business cycles? I. Cycles are predictable. II. In each cycle,a peak follows an expansion. III. Potential GDP fluctuates around real GDP.

In the expenditure approach to GDP,the largest component is

The circular flow diagram shows only the aggregate expenditures measure of GDP.

If a larger fraction of the adult population is working in the marketplace,household production

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