Question 1

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.

Question 2

According to the BEA, in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent. The difference between the change in nominal GDP and the change in real GDP could be explained by

Accepted Answer

A)  an increase in prices of final goods and services produced. 
B)  a decrease in prices of final goods and services produced. 
C)  an increase in quantity of final goods and services produced. 
D)  a decrease in quantity of final goods and services produced. 
A)  an increase in prices of final goods and services produced. 
B)  a decrease in prices of final goods and services produced. 
C)  an increase in quantity of final goods and services produced. 
D)  a decrease in quantity of final goods and services produced.

Question 3

Which of the following is NOT part of the expenditure approach to measuring GDP?

Accepted Answer

A)  gross private domestic investment 
B)  net exports of goods and services 
C)  net interest 
D)  personal consumption expenditures 
A)  gross private domestic investment 
B)  net exports of goods and services 
C)  net interest 
D)  personal consumption expenditures

Question 4

A business cycle is

Accepted Answer

A)  the pattern of short-run upward and downward movements in total output. 
B)  the increase in consumer spending that accompanies an increase in disposable income. 
C)  the cyclical change in the nation's balance of trade. 
D)  the cyclical movement in the interest rates. 
A)  the pattern of short-run upward and downward movements in total output. 
B)  the increase in consumer spending that accompanies an increase in disposable income. 
C)  the cyclical change in the nation's balance of trade. 
D)  the cyclical movement in the interest rates.

Question 5

A new 2015 Honda Civic produced in 2015 and purchased in 2016 is

Accepted Answer

A)  part of GDP in 2015. 
B)  part of GDP in 2016. 
C)  not part of GDP in either year because it was produced in one year and sold in another year. 
D)  part of GDP in both 2015 and 2016. 
A)  part of GDP in 2015. 
B)  part of GDP in 2016. 
C)  not part of GDP in either year because it was produced in one year and sold in another year. 
D)  part of GDP in both 2015 and 2016.

Question 6

Which of the following is included in government expenditures when measuring GDP?

Accepted Answer

A)  Social Security payments 
B)  unemployment compensation payments 
C)  pension payment made to past presidents 
D)  the current president's salary 
A)  Social Security payments 
B)  unemployment compensation payments 
C)  pension payment made to past presidents 
D)  the current president's salary

Question 7

In the circular flow model of an economy, households

Accepted Answer

A)  receive income from buyers of goods and services. 
B)  receive income from the sale of factors in the goods markets. 
C)  pay firms for the use of their factors. 
D)  receive income from producers for the use of factors in the factor markets. 
A)  receive income from buyers of goods and services. 
B)  receive income from the sale of factors in the goods markets. 
C)  pay firms for the use of their factors. 
D)  receive income from producers for the use of factors in the factor markets.

Question 8

The low point of economic activity during a business cycle is called the

Accepted Answer

A)  trough. 
B)  recession. 
C)  peak. 
D)  failure. 
A)  trough. 
B)  recession. 
C)  peak. 
D)  failure.

Question 9

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 10

-The figure above shows a time-series graph. The horizontal axis measures ________ and the vertical axis measures ________.

Accepted Answer

A)  time; x-values 
B)  time; the variable of interest 
C)  the variable of interest; time 
D)  y-values; the variable of interest 
A)  time; x-values 
B)  time; the variable of interest 
C)  the variable of interest; time 
D)  y-values; the variable of interest

Question 11

Which of the following is included in the category of corporate profits when measuring GDP?
I.Profits paid as dividends.
II.Undistributed profits.
III.Income received by owners and operators of businesses.

Accepted Answer

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

Question 12

Which of the following is TRUE regarding the circular flow diagram?
I."Aggregate income" is the flow of income earned by firms.
II.Retained earnings are considered income earned by firms rather than part of households' income.
III.The government, households, and firms all have transactions in the goods market.

Accepted Answer

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

Question 13

An economic expansion rather than a recession occurs

Accepted Answer

A)  when the federal budget is balanced. 
B)  when the unemployment rate falls below 5 percent. 
C)  when growth in real GDP is positive. 
D)  when the unemployment rate is not changing. 
A)  when the federal budget is balanced. 
B)  when the unemployment rate falls below 5 percent. 
C)  when growth in real GDP is positive. 
D)  when the unemployment rate is not changing.

Question 14

To measure GDP using the expenditure approach you must collect data on

Accepted Answer

A)  inflation. 
B)  exports. 
C)  wages. 
D)  saving. 
A)  inflation. 
B)  exports. 
C)  wages. 
D)  saving.

Question 15

Consumption expenditure is the payment by households for consumption of

Accepted Answer

A)  goods but not services. 
B)  services but not goods. 
C)  goods and services. 
D)  services and for saving. 
A)  goods but not services. 
B)  services but not goods. 
C)  goods and services. 
D)  services and for saving.

Question 16

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

Accepted Answer

A) True 
 B)False

Question 17

If we compare the four sources of spending in the economy we see that

Accepted Answer

A)  household consumption is the smallest. 
B)  government expenditure is the largest. 
C)  business investment is the largest. 
D)  household consumption is the largest. 
A)  household consumption is the smallest. 
B)  government expenditure is the largest. 
C)  business investment is the largest. 
D)  household consumption is the largest.

Question 18

By common definition, a recession occurs when

Accepted Answer

A)  the international deficit worsens for at least two successive quarters. 
B)  the government budget deficit exceeds the national debt. 
C)  the inflation rate exceeds 3.5 percent. 
D)  real GDP decreases for at least two successive quarters. 
A)  the international deficit worsens for at least two successive quarters. 
B)  the government budget deficit exceeds the national debt. 
C)  the inflation rate exceeds 3.5 percent. 
D)  real GDP decreases for at least two successive quarters.

Question 19

-In the above figure, consumption expenditure is shown by flow

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  F.

Question 20

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

Accepted Answer

A)  falling. 
B)  rising. 
C)  high but not rising any higher. 
D)  low. 
A)  falling. 
B)  rising. 
C)  high but not rising any higher. 
D)  low.

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

According to the BEA, in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent. The difference between the change in nominal GDP and the change in real GDP could be explained by

Which of the following is NOT part of the expenditure approach to measuring GDP?

A business cycle is

A new 2015 Honda Civic produced in 2015 and purchased in 2016 is

Which of the following is included in government expenditures when measuring GDP?

In the circular flow model of an economy, households

The low point of economic activity during a business cycle is called the

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.

-The figure above shows a time-series graph. The horizontal axis measures and the vertical axis measures .

Which of the following is included in the category of corporate profits when measuring GDP? I.Profits paid as dividends. II.Undistributed profits. III.Income received by owners and operators of businesses.

An economic expansion rather than a recession occurs

To measure GDP using the expenditure approach you must collect data on

Consumption expenditure is the payment by households for consumption of

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

If we compare the four sources of spending in the economy we see that

By common definition, a recession occurs when

-In the above figure, consumption expenditure is shown by flow

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

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

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

According to the BEA, in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent. The difference between the change in nominal GDP and the change in real GDP could be explained by

Which of the following is NOT part of the expenditure approach to measuring GDP?

A business cycle is

A new 2015 Honda Civic produced in 2015 and purchased in 2016 is

Which of the following is included in government expenditures when measuring GDP?

In the circular flow model of an economy, households

The low point of economic activity during a business cycle is called the

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.

-The figure above shows a time-series graph. The horizontal axis measures ________ and the vertical axis measures ________.

Which of the following is included in the category of corporate profits when measuring GDP? I.Profits paid as dividends. II.Undistributed profits. III.Income received by owners and operators of businesses.

An economic expansion rather than a recession occurs

To measure GDP using the expenditure approach you must collect data on

Consumption expenditure is the payment by households for consumption of

The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

If we compare the four sources of spending in the economy we see that

By common definition, a recession occurs when

-In the above figure, consumption expenditure is shown by flow

A graph shows the wages of factory workers. The slope of the line is positive for periods when the wage rate is

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

-The figure above shows a time-series graph. The horizontal axis measures and the vertical axis measures .