Question 1

Gross investment is equal to

Accepted Answer

A)  depreciation minus net investment. 
B)  net investment plus capital stock. 
C)  depreciation plus net investment. 
D)  net investment minus capital stock. 
A)  depreciation minus net investment. 
B)  net investment plus capital stock. 
C)  depreciation plus net investment. 
D)  net investment minus capital stock.

Question 2

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, ________ has occurred.

Accepted Answer

A)  replacement investment 
B)  gross investment 
C)  depreciation 
D)  net investment 
A)  replacement investment 
B)  gross investment 
C)  depreciation 
D)  net investment

Question 3

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 4

According to the BEA, in the second quarter of 2012 purchases of new residential structures rose by 8.9 percent. Using the expenditure approach, this change increases

Accepted Answer

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

Question 5

If Frito Lay, an American snack company, opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America, then Mexico's GDP ________ and U.S. GDP ________.

Accepted Answer

A)  increases; does not change 
B)  does not change; increases 
C)  increases; decreases 
D)  increases; increases 
A)  increases; does not change 
B)  does not change; increases 
C)  increases; decreases 
D)  increases; increases

Question 6

The four parts of the business cycle occur in the following order

Accepted Answer

A)  recession, trough, peak, expansion. 
B)  expansion, trough, peak, recession. 
C)  recession, trough, expansion, peak. 
D)  expansion, trough, recession, peak. 
A)  recession, trough, peak, expansion. 
B)  expansion, trough, peak, recession. 
C)  recession, trough, expansion, peak. 
D)  expansion, trough, recession, peak.

Question 7

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 8

-Using the data in the table above, what is the value of GDP?

Accepted Answer

A)  $13,516 billion 
B)  $10,679 billion 
C)  $9,541 billion 
D)  $8,403 billion 
A)  $13,516 billion 
B)  $10,679 billion 
C)  $9,541 billion 
D)  $8,403 billion

Question 9

-The income approach to measuring GDP

Accepted Answer

A)  determines the cost of production, then adjusts it to equal the market value of production. 
B)  sums all incomes earned in the United States and makes no other adjustments because other adjustments are not necessary. 
C)  measures the cost of producing GDP rather than the market value. 
D)  sums the value at each stage of production plus the value of depreciation. 
A)  determines the cost of production, then adjusts it to equal the market value of production. 
B)  sums all incomes earned in the United States and makes no other adjustments because other adjustments are not necessary. 
C)  measures the cost of producing GDP rather than the market value. 
D)  sums the value at each stage of production plus the value of depreciation.

Question 10

In the circular flow of income

Accepted Answer

A)  households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. 
B)  households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. 
C)  households sell goods and services while firms sell factors. 
D)  households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms. 
A)  households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. 
B)  households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. 
C)  households sell goods and services while firms sell factors. 
D)  households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.

Question 11

According to the circular flow diagram, the dollar value of a nation's output is equal to

Accepted Answer

A)  profits. 
B)  total income. 
C)  net income minus taxes. 
D)  wages. 
A)  profits. 
B)  total income. 
C)  net income minus taxes. 
D)  wages.

Question 12

Recessions are commonly defined to occur

Accepted Answer

A)  whenever unemployment increases. 
B)  when growth in real GDP decreases for two consecutive quarters. 
C)  when growth in real GDP is negative for two consecutive quarters. 
D)  when the unemployment rate exceeds 6 percent. 
A)  whenever unemployment increases. 
B)  when growth in real GDP decreases for two consecutive quarters. 
C)  when growth in real GDP is negative for two consecutive quarters. 
D)  when the unemployment rate exceeds 6 percent.

Question 13

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)  the standard of living did not change in Uruguay between 2000 and 2008. 
B)  Uruguay entered a recession in 2001. 
C)  potential GDP decreased in 2001. 
D)  Uruguay's economy reached a peak in 2005. 
A)  the standard of living did not change in Uruguay between 2000 and 2008. 
B)  Uruguay entered a recession in 2001. 
C)  potential GDP decreased in 2001. 
D)  Uruguay's economy reached a peak in 2005.

Question 14

Define and discuss GDP.

Accepted Answer

GDP is the market value of all final goo

Question 15

You believe that the total amount of goods produced in the United States has generally increased over the years. In a time-series graph illustrating the total amount produced, you expect to find

Accepted Answer

A)  an upward trend. 
B)  no relationship between time and the amount of goods produced. 
C)  an inverse relationship between time and the amount of goods produced. 
D)  a linear relationship. 
A)  an upward trend. 
B)  no relationship between time and the amount of goods produced. 
C)  an inverse relationship between time and the amount of goods produced. 
D)  a linear relationship.

Question 16

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

Accepted Answer

A) True 
 B)False

Question 17

The omission of household production causes actual economic production to be underestimated.

Accepted Answer

A) True 
 B)False

Question 18

The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euros, in constant prices):
2006	2007
Consumption	84,000	89,000
Government expenditure	24,000	26,000
Investment	48,000	48,000
Exports	142,000	151,000
Imports	123,000	128,000
Subsidies	1,800	1,900
Taxes	500	500
Ireland's real GDP in 2007 was ________ million euros.

Accepted Answer

A)  442,000 
B)  186,000 
C)  188,400 
D)  163,000 
A)  442,000 
B)  186,000 
C)  188,400 
D)  163,000

Question 19

The circular flow of income shows that

Accepted Answer

A)  households transact only in the goods market. 
B)  governments purchase goods and services. 
C)  firms generally are the demanders in the goods markets and suppliers in the factor markets. 
D)  None of the above answers is correct. 
A)  households transact only in the goods market. 
B)  governments purchase goods and services. 
C)  firms generally are the demanders in the goods markets and suppliers in the factor markets. 
D)  None of the above answers is correct.

Question 20

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

Accepted Answer

A)  gross private investment. 
B)  gross private investment plus government expenditure on goods and services. 
C)  gross private investment plus government expenditure on goods and services minus imports of goods and services. 
D)  gross private investment plus government expenditure on goods and services plus net exports of goods and services. 
A)  gross private investment. 
B)  gross private investment plus government expenditure on goods and services. 
C)  gross private investment plus government expenditure on goods and services minus imports of goods and services. 
D)  gross private investment plus government expenditure on goods and services plus net exports of goods and services.

Gross investment is equal to

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, ________ has occurred.

An expansion ends when the economy

According to the BEA, in the second quarter of 2012 purchases of new residential structures rose by 8.9 percent. Using the expenditure approach, this change increases

If Frito Lay, an American snack company, opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America, then Mexico's GDP and U.S. GDP .

The four parts of the business cycle occur in the following order

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

-Using the data in the table above, what is the value of GDP?

-The income approach to measuring GDP

In the circular flow of income

According to the circular flow diagram, the dollar value of a nation's output is equal to

Recessions are commonly defined to occur

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

Define and discuss GDP.

You believe that the total amount of goods produced in the United States has generally increased over the years. In a time-series graph illustrating the total amount produced, you expect to find

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

The omission of household production causes actual economic production to be underestimated.

The circular flow of income shows that

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

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

Gross investment is equal to

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, ________ has occurred.

An expansion ends when the economy

According to the BEA, in the second quarter of 2012 purchases of new residential structures rose by 8.9 percent. Using the expenditure approach, this change increases

If Frito Lay, an American snack company, opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America, then Mexico's GDP ________ and U.S. GDP ________.

The four parts of the business cycle occur in the following order

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

-Using the data in the table above, what is the value of GDP?

-The income approach to measuring GDP

In the circular flow of income

According to the circular flow diagram, the dollar value of a nation's output is equal to

Recessions are commonly defined to occur

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

Define and discuss GDP.

You believe that the total amount of goods produced in the United States has generally increased over the years. In a time-series graph illustrating the total amount produced, you expect to find

To calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports.

The omission of household production causes actual economic production to be underestimated.

The circular flow of income shows that

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

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

If Frito Lay, an American snack company, opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America, then Mexico's GDP and U.S. GDP .