Question 1

Which of the following are parts of the business cycles?

Accepted Answer

A)  peak and potential GDP 
B)  real GDP and potential GDP 
C)  recession and expansion 
D)  inflation and recession 
A)  peak and potential GDP 
B)  real GDP and potential GDP 
C)  recession and expansion 
D)  inflation and recession

Question 2

An increase in exports of goods or services with no change in imports of goods or services

Accepted Answer

A)  decreases GDP. 
B)  increases GDP. 
C)  may increase or decrease GDP depending on whether it is the export of goods or the export of services that increased. 
D)  has no effect on GDP. 
A)  decreases GDP. 
B)  increases GDP. 
C)  may increase or decrease GDP depending on whether it is the export of goods or the export of services that increased. 
D)  has no effect on GDP.

Question 3

The largest component of GDP is

Accepted Answer

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

Question 4

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

Accepted Answer

A)  peak, expansion, and recession, respectively 
B)  recession, expansion, and peak, respectively 
C)  expansion, peak, and recession, respectively 
D)  peak, recession, and expansion, respectively 
A)  peak, expansion, and recession, respectively 
B)  recession, expansion, and peak, respectively 
C)  expansion, peak, and recession, respectively 
D)  peak, recession, and expansion, respectively

Question 5

The chain-weighted output index method of calculating real GDP compares

Accepted Answer

A)  compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
B)  quantities produced in different years using prices from a year chosen as a reference period. 
C)  quantities produced in different years with the prices that prevailed during the year in which the output was produced. 
D)  prices at different points in time using a sample of goods that is representative of goods purchased by households. 
A)  compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output. 
B)  quantities produced in different years using prices from a year chosen as a reference period. 
C)  quantities produced in different years with the prices that prevailed during the year in which the output was produced. 
D)  prices at different points in time using a sample of goods that is representative of goods purchased by households.

Question 6

To calculate GDP when using the income approach, you must add indirect business taxes and depreciation.

Accepted Answer

A) True 
 B)False

Question 7

An indirect tax is a tax paid by consumers

Accepted Answer

A)  to a state or local government. 
B)  when they purchase goods and services. 
C)  on unearned income (as opposed to wages and salaries). 
D)  that is a percentage of the value of their real property. 
A)  to a state or local government. 
B)  when they purchase goods and services. 
C)  on unearned income (as opposed to wages and salaries). 
D)  that is a percentage of the value of their real property.

Question 8

-The income approach measures GDP by adding together compensation of employees, proprietors' income, ________.

Accepted Answer

A)  net investment, saving, and farmers' income 
B)  net interest, rental income, and corporate profits 
C)  net investment, rental income, and corporate profits 
D)  net saving, investment income, and profits 
A)  net investment, saving, and farmers' income 
B)  net interest, rental income, and corporate profits 
C)  net investment, rental income, and corporate profits 
D)  net saving, investment income, and profits

Question 9

The circular flow diagram indicates that

Accepted Answer

A)  households sell the services of factors of production to firms. 
B)  firms buy the services of factors of production from the government. 
C)  households sell goods and services to the government. 
D)  firms buy goods and services from households. 
A)  households sell the services of factors of production to firms. 
B)  firms buy the services of factors of production from the government. 
C)  households sell goods and services to the government. 
D)  firms buy goods and services from households.

Question 10

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 11

Gross investment equals

Accepted Answer

A)  net investment - depreciation + change in inventories. 
B)  net investment + depreciation. 
C)  net investment + change in inventories. 
D)  depreciation + change in inventories. 
A)  net investment - depreciation + change in inventories. 
B)  net investment + depreciation. 
C)  net investment + change in inventories. 
D)  depreciation + change in inventories.

Question 12

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

Accepted Answer

A)  $5,130 billion 
B)  $5,320 billion 
C)  $4,760 billion 
D)  $4,690 billion 
A)  $5,130 billion 
B)  $5,320 billion 
C)  $4,760 billion 
D)  $4,690 billion

Question 13

An indirect tax is exemplified by

Accepted Answer

A)  an income tax. 
B)  a sales tax. 
C)  a subsidy. 
D)  None of the above answers is correct. 
A)  an income tax. 
B)  a sales tax. 
C)  a subsidy. 
D)  None of the above answers is correct.

Question 14

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

Accepted Answer

They are all equal. The value of product

Question 15

On January 1, 2015, United Delivery had trucks valued at $1.3 million. During 2015, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2015 was $1.5 million, what is the amount of its net investment and its depreciation during 2015?

Accepted Answer

Net investment is the change in the capi

Question 16

-According to the graph in the figure above, which year experienced the most rapid change in employment?

Accepted Answer

A)  Year 2 
B)  Year 3 
C)  Year 4 
D)  Year 5 
A)  Year 2 
B)  Year 3 
C)  Year 4 
D)  Year 5

Question 17

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 be greater than potential GDP if the inflation rate is positive. 
D)  always equals potential GDP. 
A)  must always be less than potential GDP. 
B)  might be greater or less than potential GDP. 
C)  will be greater than potential GDP if the inflation rate is positive. 
D)  always equals potential GDP.

Question 18

-If we compare the U.S. GDP and the Chinese GDP

Accepted Answer

A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used.

Question 19

By itself, an increase in exports

Accepted Answer

A)  increases GDP. 
B)  decreases GDP. 
C)  means imports decrease by the same amount. 
D)  can either increase or decrease GDP, depending on whether the exports are durable or nondurable. 
A)  increases GDP. 
B)  decreases GDP. 
C)  means imports decrease by the same amount. 
D)  can either increase or decrease GDP, depending on whether the exports are durable or nondurable.

Question 20

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

Accepted Answer

A) True 
 B)False

Which of the following are parts of the business cycles?

An increase in exports of goods or services with no change in imports of goods or services

The largest component of GDP is

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

The chain-weighted output index method of calculating real GDP compares

To calculate GDP when using the income approach, you must add indirect business taxes and depreciation.

An indirect tax is a tax paid by consumers

-The income approach measures GDP by adding together compensation of employees, proprietors' income, ________.

The circular flow diagram indicates that

When calculating GDP, underground economic activity is

Gross investment equals

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

An indirect tax is exemplified by

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

On January 1, 2015, United Delivery had trucks valued at $1.3 million. During 2015, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2015 was $1.5 million, what is the amount of its net investment and its depreciation during 2015?

-According to the graph in the figure above, which year experienced the most rapid change in employment?

In any year, real GDP

-If we compare the U.S. GDP and the Chinese GDP

By itself, an increase in exports

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

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

Which of the following are parts of the business cycles?

An increase in exports of goods or services with no change in imports of goods or services

The largest component of GDP is

-In the above figure, the letters A, B, and C represent which positions in the business cycle?

The chain-weighted output index method of calculating real GDP compares

To calculate GDP when using the income approach, you must add indirect business taxes and depreciation.

An indirect tax is a tax paid by consumers

-The income approach measures GDP by adding together compensation of employees, proprietors' income, ________.

The circular flow diagram indicates that

When calculating GDP, underground economic activity is

Gross investment equals

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

An indirect tax is exemplified by

What is the relationship shown by the circular flow among income, total expenditure, and GDP?

On January 1, 2015, United Delivery had trucks valued at $1.3 million. During 2015, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2015 was $1.5 million, what is the amount of its net investment and its depreciation during 2015?

-According to the graph in the figure above, which year experienced the most rapid change in employment?

In any year, real GDP

-If we compare the U.S. GDP and the Chinese GDP

By itself, an increase in exports

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

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