Question 1

-Normally in the United States the relationship between nominal and real GDP for a given year is

Accepted Answer

A)  real GDP is greater than nominal GDP because of price increases. 
B)  nominal GDP is greater than real GDP because of price increases. 
C)  nominal GDP equals real GDP. 
D)  nominal GDP is greater than real GDP because of price decreases. 
A)  real GDP is greater than nominal GDP because of price increases. 
B)  nominal GDP is greater than real GDP because of price increases. 
C)  nominal GDP equals real GDP. 
D)  nominal GDP is greater than real GDP because of price decreases.

Question 2

The business cycle refers to

Accepted Answer

A)  fluctuations in the level of real GDP around potential GDP. 
B)  changes in the level of nominal GDP. 
C)  changes in the level of the stock market. 
D)  changes in the level of employment. 
A)  fluctuations in the level of real GDP around potential GDP. 
B)  changes in the level of nominal GDP. 
C)  changes in the level of the stock market. 
D)  changes in the level of employment.

Question 3

-Purchasing power parity prices are used to construct GDP data that

Accepted Answer

A)  do not omit the underground economy. 
B)  can be used to make more valid comparisons between one country and another. 
C)  is a proper measure of economic welfare. 
D)  adjust for differences in population. 
A)  do not omit the underground economy. 
B)  can be used to make more valid comparisons between one country and another. 
C)  is a proper measure of economic welfare. 
D)  adjust for differences in population.

Question 4

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time (in years)on the horizontal axis would show

Accepted Answer

A)  the rate of inflation as a horizontal line. 
B)  that inflation was following a decreasing trend line. 
C)  that inflation had a positive trend. 
D)  that inflation had a negative trend. 
A)  the rate of inflation as a horizontal line. 
B)  that inflation was following a decreasing trend line. 
C)  that inflation had a positive trend. 
D)  that inflation had a negative trend.

Question 5

The chain-weighted output index

Accepted Answer

A)  uses only the current year's prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  must be calculated only every other year. 
D)  is an inaccurate way to measure growth in real GDP and so has been replaced by the "nominal-to-real" index. 
A)  uses only the current year's prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  must be calculated only every other year. 
D)  is an inaccurate way to measure growth in real GDP and so has been replaced by the "nominal-to-real" index.

Question 6

Gross domestic product is the total ________ produced within a country in a given time period.

Accepted Answer

A)  market value of all final and intermediate goods and services 
B)  market value of all goods and services 
C)  amount of final and intermediate goods and services 
D)  market value of all final goods and services 
A)  market value of all final and intermediate goods and services 
B)  market value of all goods and services 
C)  amount of final and intermediate goods and services 
D)  market value of all final goods and services

Question 7

The components of the expenditure approach to measuring GDP include all of the following EXCEPT

Accepted Answer

A)  net exports. 
B)  government expenditure on goods and services. 
C)  investment. 
D)  the implicit payments for unpaid household work. 
A)  net exports. 
B)  government expenditure on goods and services. 
C)  investment. 
D)  the implicit payments for unpaid household work.

Question 8

-The figure above shows the price of a DVD player from 2003 to 2007.
a)What type of graph is illustrated above?
b)What is the trend in the price of a DVD player?

Accepted Answer

a)The graph is a time-series graph becau

Question 9

What is the distinction between gross investment and net investment?

Accepted Answer

Gross investment is the total spending o

Question 10

-Which of the following is NOT one of the components for computing GDP based upon the income approach?

Accepted Answer

A)  investment 
B)  corporate profits 
C)  compensation of employees 
D)  net interest 
A)  investment 
B)  corporate profits 
C)  compensation of employees 
D)  net interest

Question 11

Comparing aggregate expenditure and aggregate incomes shows that

Accepted Answer

A)  aggregate expenditure is usually greater than aggregate income. 
B)  aggregate income is usually greater than aggregate expenditure. 
C)  they are equal. 
D)  aggregate income cannot equal aggregate expenditure if we have any savings. 
A)  aggregate expenditure is usually greater than aggregate income. 
B)  aggregate income is usually greater than aggregate expenditure. 
C)  they are equal. 
D)  aggregate income cannot equal aggregate expenditure if we have any savings.

Question 12

-In the above figure, flow B represents ________.

Accepted Answer

A)  household purchases of goods and services 
B)  household borrowing 
C)  household income 
D)  firms' payments for labor services 
A)  household purchases of goods and services 
B)  household borrowing 
C)  household income 
D)  firms' payments for labor services

Question 13

-In the above figure, the diagram shows

Accepted Answer

A)  a downward trend in x. 
B)  an upward trend in x. 
C)  a scatter diagram. 
D)  a two-variable scatter diagram. 
A)  a downward trend in x. 
B)  an upward trend in x. 
C)  a scatter diagram. 
D)  a two-variable scatter diagram.

Question 14

Of the following, the largest component of GDP is

Accepted Answer

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

Question 15

Potential GDP is

Accepted Answer

A)  the maximum GDP that an economy actually achieves throughout its entire history. 
B)  the level of GDP achieved during periods when 100 percent of the labor force is employed. 
C)  a goal that can never be achieved by the economy. 
D)  the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation. 
A)  the maximum GDP that an economy actually achieves throughout its entire history. 
B)  the level of GDP achieved during periods when 100 percent of the labor force is employed. 
C)  a goal that can never be achieved by the economy. 
D)  the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation.

Question 16

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 17

A common definition of a recession is a time with

Accepted Answer

A)  a decline in the price level. 
B)  a decline in interest rates. 
C)  a decrease in real GDP for two or more successive quarters. 
D)  a decrease in real GDP for two or more successive years. 
A)  a decline in the price level. 
B)  a decline in interest rates. 
C)  a decrease in real GDP for two or more successive quarters. 
D)  a decrease in real GDP for two or more successive years.

Question 18

-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 19

When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United States.

Accepted Answer

A) True 
 B)False

Question 20

According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to

Accepted Answer

A)  a decrease in government expenditure on goods and services. 
B)  no change in GDP because only federal government expenditures are included in GDP. 
C)  a decrease in gross private domestic investment. 
D)  no change in GDP because state and local government expenditure is always canceled out by federal government expenditure. 
A)  a decrease in government expenditure on goods and services. 
B)  no change in GDP because only federal government expenditures are included in GDP. 
C)  a decrease in gross private domestic investment. 
D)  no change in GDP because state and local government expenditure is always canceled out by federal government expenditure.

-Normally in the United States the relationship between nominal and real GDP for a given year is

The business cycle refers to

-Purchasing power parity prices are used to construct GDP data that

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time (in years)on the horizontal axis would show

The chain-weighted output index

Gross domestic product is the total ________ produced within a country in a given time period.

The components of the expenditure approach to measuring GDP include all of the following EXCEPT

-The figure above shows the price of a DVD player from 2003 to 2007. a)What type of graph is illustrated above? b)What is the trend in the price of a DVD player?

What is the distinction between gross investment and net investment?

-Which of the following is NOT one of the components for computing GDP based upon the income approach?

Comparing aggregate expenditure and aggregate incomes shows that

-In the above figure, flow B represents ________.

-In the above figure, the diagram shows

Of the following, the largest component of GDP is

Potential GDP is

Gross domestic product can be calculated

A common definition of a recession is a time with

-Using the information in the table above, net exports equals

When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United States.

According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to

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

-Normally in the United States the relationship between nominal and real GDP for a given year is

The business cycle refers to

-Purchasing power parity prices are used to construct GDP data that

Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time (in years)on the horizontal axis would show

The chain-weighted output index

Gross domestic product is the total ________ produced within a country in a given time period.

The components of the expenditure approach to measuring GDP include all of the following EXCEPT

-The figure above shows the price of a DVD player from 2003 to 2007. a)What type of graph is illustrated above? b)What is the trend in the price of a DVD player?

What is the distinction between gross investment and net investment?

-Which of the following is NOT one of the components for computing GDP based upon the income approach?

Comparing aggregate expenditure and aggregate incomes shows that

-In the above figure, flow B represents ________.

-In the above figure, the diagram shows

Of the following, the largest component of GDP is

Potential GDP is

Gross domestic product can be calculated

A common definition of a recession is a time with

-Using the information in the table above, net exports equals

When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United States.

According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to

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