Question 1

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

Accepted Answer

A)  net investment. 
B)  gross investment minus depreciation. 
C)  gross investment plus depreciation. 
D)  gross investment. 
A)  net investment. 
B)  gross investment minus depreciation. 
C)  gross investment plus depreciation. 
D)  gross investment. D

Question 2

Net investment is the

Accepted Answer

A)  total amount of gross investment minus depreciation. 
B)  value of software and other network related products. 
C)  profit or loss in the stock market. 
D)  value of the depreciated capital multiplied by the changes in the price level. 
A)  total amount of gross investment minus depreciation. 
B)  value of software and other network related products. 
C)  profit or loss in the stock market. 
D)  value of the depreciated capital multiplied by the changes in the price level. A

Question 3

The circular flow diagram shows that

Accepted Answer

A)  the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services. 
B)  goods and factor markets are independent. 
C)  the total amount of income generated by the economy equals the total purchases of final goods and services. 
D)  consumption expenditure equals saving. 
A)  the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services. 
B)  goods and factor markets are independent. 
C)  the total amount of income generated by the economy equals the total purchases of final goods and services. 
D)  consumption expenditure equals saving. C

Question 4

The following data show Uruguay's GDP using purchasing power parity in billions of dollars.
 
Using the data, we can conclude that

Accepted Answer

A)  Uruguay's economy reached a peak in 2000. 
B)  GDP per person in Uruguay almost doubled between 2000 and 2008. 
C)  potential GDP in Uruguay doubled between 2000 and 2008. 
D)  Uruguay's economy was entered a recession in 2008. 
A)  Uruguay's economy reached a peak in 2000. 
B)  GDP per person in Uruguay almost doubled between 2000 and 2008. 
C)  potential GDP in Uruguay doubled between 2000 and 2008. 
D)  Uruguay's economy was entered a recession in 2008.

Question 5

According to the BEA, in the second quarter of 2012 federal government spending on goods and services changed by -0.1 percent. This decrease could have been caused by a decrease in spending on

Accepted Answer

A)  national defense. 
B)  Social Security. 
C)  interest payments on the national debt. 
D)  unemployment benefits. 
A)  national defense. 
B)  Social Security. 
C)  interest payments on the national debt. 
D)  unemployment benefits.

Question 6

The following data describe France's economy in 2008.
Consumption	234 billion euros
Government expenditure	93 billion euros
Investment	88 billion euros
Exports	128 billion euros
Imports	137 billion euros
From the data, we can conclude that in France

Accepted Answer

A)  net exports totaled -11 billion euros. 
B)  GDP equaled 424 billion euros. 
C)  GDP equaled 680 billion euros. 
D)  Net exports totaled 265 billion euros. 
A)  net exports totaled -11 billion euros. 
B)  GDP equaled 424 billion euros. 
C)  GDP equaled 680 billion euros. 
D)  Net exports totaled 265 billion euros.

Question 7

-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 8

Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP.

Accepted Answer

A) True 
 B)False

Question 9

In the United States, GDP is typically measured

Accepted Answer

A)  monthly. 
B)  quarterly. 
C)  daily. 
D)  weekly. 
A)  monthly. 
B)  quarterly. 
C)  daily. 
D)  weekly.

Question 10

Compared to the other sources of spending, net exports is

Accepted Answer

A)  large and negative. 
B)  small and negative. 
C)  large and positive. 
D)  small and positive. 
A)  large and negative. 
B)  small and negative. 
C)  large and positive. 
D)  small and positive.

Question 11

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

Question 12

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 13

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.

Question 14

If you buy a new water skis and other new equipment for $2,500 and take a week off of your job, where you earn $1,000 a week, to go water skiing. The equipment you purchased was all produced in the United States. You think that the week was worth $4,000. As a result of your vacation, GDP changes by how much?

Accepted Answer

GDP changes by only

Question 15

Which one of the following transactions in a particular year is included in gross domestic product for that year?

Accepted Answer

A)  Social Security payments to retirees 
B)  The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. 
C)  A car is produced in the previous year and remains in inventory for the entire year under consideration. 
D)  A stay-at-home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform. 
A)  Social Security payments to retirees 
B)  The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. 
C)  A car is produced in the previous year and remains in inventory for the entire year under consideration. 
D)  A stay-at-home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform.

Question 16

How are changes in inventory treated in GDP?

Accepted Answer

Changes in inventory are part of the inv

Question 17

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Accepted Answer

A)  a new set of tools by an auto mechanic, for use in repairing cars. 
B)  100 shares of IBM stock. 
C)  a 100 year old house by a married couple. 
D)  computer chips by Dell to put in their personal computers. 
A)  a new set of tools by an auto mechanic, for use in repairing cars. 
B)  100 shares of IBM stock. 
C)  a 100 year old house by a married couple. 
D)  computer chips by Dell to put in their personal computers.

Question 18

Explain the relationship among the capital stock, gross investment, net investment, and depreciation.

Accepted Answer

The capital stock is the total quantity

Question 19

Gross domestic product

Accepted Answer

A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period. 
A)  includes all the goods and none of the services produced in an economy in a given time period. 
B)  measures the value of the aggregate production of goods and services in a country during a given time period. 
C)  measures the value of labor payments generated in an economy in a given time period. 
D)  is generally less than federal expenditure in any time period.

Question 20

Explain the business cycle by describing the phases and turning points.

Accepted Answer

The business cycle has two phases, the e

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

Net investment is the

The circular flow diagram shows that

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Using the data, we can conclude that

According to the BEA, in the second quarter of 2012 federal government spending on goods and services changed by -0.1 percent. This decrease could have been caused by a decrease in spending on

The following data describe France's economy in 2008. Consumption 234 billion euros Government expenditure 93 billion euros Investment 88 billion euros Exports 128 billion euros Imports 137 billion euros From the data, we can conclude that in France

-Which type of graph is used to identify trends?

Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP.

In the United States, GDP is typically measured

Compared to the other sources of spending, net exports is

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?

An expansion

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

Which one of the following transactions in a particular year is included in gross domestic product for that year?

How are changes in inventory treated in GDP?

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Explain the relationship among the capital stock, gross investment, net investment, and depreciation.

Gross domestic product

Explain the business cycle by describing the phases and turning points.

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring GDP and Economic Growth

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

Net investment is the

The circular flow diagram shows that

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Using the data, we can conclude that

According to the BEA, in the second quarter of 2012 federal government spending on goods and services changed by -0.1 percent. This decrease could have been caused by a decrease in spending on

The following data describe France's economy in 2008. Consumption 234 billion euros Government expenditure 93 billion euros Investment 88 billion euros Exports 128 billion euros Imports 137 billion euros From the data, we can conclude that in France

-Which type of graph is used to identify trends?

Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP.

In the United States, GDP is typically measured

Compared to the other sources of spending, net exports is

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?

An expansion

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

Which one of the following transactions in a particular year is included in gross domestic product for that year?

How are changes in inventory treated in GDP?

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

Explain the relationship among the capital stock, gross investment, net investment, and depreciation.

Gross domestic product

Explain the business cycle by describing the phases and turning points.

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters