Question 1

Which of the following statements is true?

Accepted Answer

A) The main items that comprise indirect business taxes include excise taxes,income taxes,and property taxes. 
B) Capital consumption allowance is also known as depreciation. 
C) A sales tax is an example of an indirect business tax. 
D) b and c 
E) a,b,and c 
A) The main items that comprise indirect business taxes include excise taxes,income taxes,and property taxes. 
B) Capital consumption allowance is also known as depreciation. 
C) A sales tax is an example of an indirect business tax. 
D) b and c 
E) a,b,and c

Question 2

Corporate profits can be broken into three categories: dividends,undistributed profits,and corporate profits taxes.

Accepted Answer

A) True 
 B)False

Question 3

Macroeconomists define consumption as

Accepted Answer

A) purchases by the business sector. 
B) wearing away and breakdown of capital goods. 
C) the difference between imports and exports. 
D) purchases by the household sector. 
A) purchases by the business sector. 
B) wearing away and breakdown of capital goods. 
C) the difference between imports and exports. 
D) purchases by the household sector.

Question 4

Which of the following is a nonmarket good?

Accepted Answer

A) the corn you grow in your home garden and consume 
B) the clothes you sew and sell to a neighbor who pays you by writing you a check 
C) the self-portrait hanging in your den 
D) a and c 
E) a,b,and c 
A) the corn you grow in your home garden and consume 
B) the clothes you sew and sell to a neighbor who pays you by writing you a check 
C) the self-portrait hanging in your den 
D) a and c 
E) a,b,and c

Question 5

Which of the following statements is false?

Accepted Answer

A) Domestic income is the total income earned by the people and businesses within a country's borders. 
B) National income is the total income earned by U.S.citizens and businesses,no matter where they reside or are located. 
C) Corporate profits is the largest component of national income. 
D) National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
A) Domestic income is the total income earned by the people and businesses within a country's borders. 
B) National income is the total income earned by U.S.citizens and businesses,no matter where they reside or are located. 
C) Corporate profits is the largest component of national income. 
D) National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest.

Question 6

Net domestic product is the total value of

Accepted Answer

A) all final goods and services produced within a country's borders in a year. 
B) only intermediate goods produced within a country's borders in a year. 
C) all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D) only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E) all final goods and services produced within a country's borders in a year minus capital consumption allowance. 
A) all final goods and services produced within a country's borders in a year. 
B) only intermediate goods produced within a country's borders in a year. 
C) all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D) only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E) all final goods and services produced within a country's borders in a year minus capital consumption allowance.

Question 7

In 1820,the country with the highest per capita GDP was

Accepted Answer

A) Australia. 
B) the United States. 
C) Austria. 
D) Germany. 
E) the Netherlands. 
A) Australia. 
B) the United States. 
C) Austria. 
D) Germany. 
E) the Netherlands.

Question 8

The typical U.S.business cycle,measured peak to peak,lasts approximately

Accepted Answer

A) 4 to 5 years. 
B) 8 to 10 years. 
C) 1 to 3 years. 
D) 6 months to 2 years. 
A) 4 to 5 years. 
B) 8 to 10 years. 
C) 1 to 3 years. 
D) 6 months to 2 years.

Question 9

The research of economists Stevenson and Wolfers tends to support the Easterlin paradox.

Accepted Answer

A) True 
 B)False

Question 10

Net exports must always be a positive amount.

Accepted Answer

A) True 
 B)False

Question 11

Countries with a large GDP must also have a large per-capita GDP.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is false?

Accepted Answer

A) Real GDP in the United States was approximately seven times greater in 2012 than in 1950. 
B) The U.S.population was approximately twice as large in 2012 than in 1950. 
C) Nominal GDP in the United States was approximately seven times greater in 2012 than in 1950. 
D) Real GDP is GDP adjusted for price changes. 
A) Real GDP in the United States was approximately seven times greater in 2012 than in 1950. 
B) The U.S.population was approximately twice as large in 2012 than in 1950. 
C) Nominal GDP in the United States was approximately seven times greater in 2012 than in 1950. 
D) Real GDP is GDP adjusted for price changes.

Question 13

Which of the following does GDP omit?

Accepted Answer

A) Jack purchases $2,300 worth of stock in company X. 
B) Bob mows his lawn and washes and irons his shirts. 
C) Helen receives $4,000 a year in Social Security payments. 
D) a and b 
E) a,b,and c 
A) Jack purchases $2,300 worth of stock in company X. 
B) Bob mows his lawn and washes and irons his shirts. 
C) Helen receives $4,000 a year in Social Security payments. 
D) a and b 
E) a,b,and c

Question 14

National income equals

Accepted Answer

A) wages + salaries + corporate profits + net income. 
B) compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C) compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D) the monetary value of fringe benefits + tips + wages + profits + salaries. 
E) none of the above 
A) wages + salaries + corporate profits + net income. 
B) compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C) compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D) the monetary value of fringe benefits + tips + wages + profits + salaries. 
E) none of the above

Question 15

Sales tax is an example of an indirect business tax.

Accepted Answer

A) True 
 B)False

Question 16

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

Accepted Answer

A) Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher. 
B) Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher. 
C) Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures. 
D) Because Real GDP is easier to compute than GDP. 
E) Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher. 
A) Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher. 
B) Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher. 
C) Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures. 
D) Because Real GDP is easier to compute than GDP. 
E) Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher.

Question 17

Which of the following statements is true?

Accepted Answer

A) National income accountants consider the portion of corporate profits that is used to pay corporate profits taxes to be income earned by households but not received. 
B) Net domestic product (NDP)is a smaller dollar amount than GDP. 
C) Personal income includes transfer payments. 
D) b and c 
E) a,b,and c 
A) National income accountants consider the portion of corporate profits that is used to pay corporate profits taxes to be income earned by households but not received. 
B) Net domestic product (NDP)is a smaller dollar amount than GDP. 
C) Personal income includes transfer payments. 
D) b and c 
E) a,b,and c

Question 18

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract ________________ from GDP.

Accepted Answer

A) the capital consumption allowance 
B) gross private domestic investment 
C) imports 
D) inventory investment 
E) the statistical discrepancy 
A) the capital consumption allowance 
B) gross private domestic investment 
C) imports 
D) inventory investment 
E) the statistical discrepancy

Question 19

Look at the following data: consumption = $915 billion;exports = $40 billion;imports = $33 billion;inventory investment = $123 billion;fixed investment = $500 billion;government purchases = $300 billion.GDP is equal to

Accepted Answer

A) $1,632 billion. 
B) $1,466 billion. 
C) $1,911 billion. 
D) $1,845 billion. 
E) none of the above 
A) $1,632 billion. 
B) $1,466 billion. 
C) $1,911 billion. 
D) $1,845 billion. 
E) none of the above

Question 20

In 1950,the country with the highest per-capita GDP was

Accepted Answer

A) Switzerland. 
B) New Zealand. 
C) the United States. 
D) Venezuela. 
E) the Netherlands. 
A) Switzerland. 
B) New Zealand. 
C) the United States. 
D) Venezuela. 
E) the Netherlands.

Exam 7: Macroeconomic Measurements, part II: GDP and Real GDP

Which of the following statements is true?

Corporate profits can be broken into three categories: dividends,undistributed profits,and corporate profits taxes.

Macroeconomists define consumption as

Which of the following is a nonmarket good?

Which of the following statements is false?

Net domestic product is the total value of

In 1820,the country with the highest per capita GDP was

The typical U.S.business cycle,measured peak to peak,lasts approximately

The research of economists Stevenson and Wolfers tends to support the Easterlin paradox.

Net exports must always be a positive amount.

Countries with a large GDP must also have a large per-capita GDP.

Which of the following statements is false?

Which of the following does GDP omit?

National income equals

Sales tax is an example of an indirect business tax.

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

Which of the following statements is true?

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract ________________ from GDP.

Look at the following data: consumption = $915 billion;exports = $40 billion;imports = $33 billion;inventory investment = $123 billion;fixed investment = $500 billion;government purchases = $300 billion.GDP is equal to

In 1950,the country with the highest per-capita GDP was

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

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