Question 1

Which of the following describes the Soviet Union's economy between 1950 and the 1980s?

Accepted Answer

A)  The Soviet economy grew rapidly due to an increase in capital per worker. 
B)  The Soviet economy increased capital per worker very slowly from 1950 through 1980. 
C)  The Soviet economy grew slowly because of the slow rate of technological change. 
D)  The Soviet economy grew because it added labour through immigration-its policy in the 1950s. 
A)  The Soviet economy grew rapidly due to an increase in capital per worker. 
B)  The Soviet economy increased capital per worker very slowly from 1950 through 1980. 
C)  The Soviet economy grew slowly because of the slow rate of technological change. 
D)  The Soviet economy grew because it added labour through immigration-its policy in the 1950s.

Question 2

In the long run,a country will experience an increasing standard of living only if it experiences

Accepted Answer

A)  a high rate of consumption. 
B)  continuous technological change. 
C)  a high rate of labour force growth. 
D)  a slow rate of population growth. 
A)  a high rate of consumption. 
B)  continuous technological change. 
C)  a high rate of labour force growth. 
D)  a slow rate of population growth.

Question 3

To calculate GDP using the value-added method,we add up

Accepted Answer

A)  the market value of final goods and services produced during a particular period. 
B)  only the value added by the underground economy. 
C)  the value added by each firm involved in the production of final goods and services. 
D)  the market value of intermediate goods and services produced during a particular period. 
A)  the market value of final goods and services produced during a particular period. 
B)  only the value added by the underground economy. 
C)  the value added by each firm involved in the production of final goods and services. 
D)  the market value of intermediate goods and services produced during a particular period.

Question 4

'Potential GDP' is defined as the

Accepted Answer

A)  maximum level of GDP that the economy can produce. 
B)  amount of GDP produced if there is a zero rate of unemployment. 
C)  level of GDP attained when all firms are producing at capacity. 
D)  amount of GDP produced when the economy is in equilibrium. 
A)  maximum level of GDP that the economy can produce. 
B)  amount of GDP produced if there is a zero rate of unemployment. 
C)  level of GDP attained when all firms are producing at capacity. 
D)  amount of GDP produced when the economy is in equilibrium.

Question 5

Refer to Table 12.2 for the following questions.
Table 12.2
  
-Refer to Table 12.2.Calculate the GDP deflator in 2013.

Accepted Answer

A)  105 
B)  114 
C)  95 
D)  87 
A)  105 
B)  114 
C)  95 
D)  87

Question 6

Suppose that real GDP for 2013 was $10 000 billion and real GDP for 2014 was $9500 billion.What is the rate of growth of real GDP?

Accepted Answer

A)  -10 per cent 
B)  -1 per cent 
C)  -5 per cent 
D)  -2 per cent 
A)  -10 per cent 
B)  -1 per cent 
C)  -5 per cent 
D)  -2 per cent

Question 7

An increase in the price level of 5 per cent between 2008 and 2009 would be implied by a change in the GDP deflator from ________ in 2008 to ________ in 2009.

Accepted Answer

A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390 
A)  105; 115 
B)  200; 205 
C)  400; 420 
D)  375; 390

Question 8

Your friend owns an ice cream stand which he works by himself.He produces about 25 ice creams per hour.He wants to be able to produce twice as many ice creams per hour so he buys a second machine.He notices that he can only produce 10 more ice creams an hour.He jokes that he could have doubled his output with the second machine if he only had four hands.Using your knowledge of the production process,explain to your friend what you think has happened when he added more capital to his production process.

Accepted Answer

The second machine does not add as much

Question 9

How is the economic growth rate calculated?

Accepted Answer

This is the rate of change in real GDP f

Question 10

Suggest two policies the government could pursue to help increase the accumulation of knowledge.

Accepted Answer

Any two of the following three explanati

Question 11

Suppose that real GDP for 2012 was $10 000 billion and real GDP for 2013 was $11 000 billion.What is the rate of growth of real GDP?

Accepted Answer

A)  10 per cent 
B)  1 per cent 
C)  5 per cent 
D)  2 per cent 
A)  10 per cent 
B)  1 per cent 
C)  5 per cent 
D)  2 per cent

Question 12

How are intermediate goods treated in the calculation of GDP?

Accepted Answer

A)  Their value is not counted separately, but included as part of the value of the final good of which they are an input. 
B)  Their value is counted separately, and their value is also included as part of the value of the final good of which they are an input. 
C)  They are included in the year that they are produced. 
D)  They are included only if they are imported. 
A)  Their value is not counted separately, but included as part of the value of the final good of which they are an input. 
B)  Their value is counted separately, and their value is also included as part of the value of the final good of which they are an input. 
C)  They are included in the year that they are produced. 
D)  They are included only if they are imported.

Question 13

Which of the following is not one of the four main policy concerns of Australian macroeconomic policy?

Accepted Answer

A)  The rate of economic growth. 
B)  The circular-flow of income. 
C)  The unemployment rate. 
D)  The rate of inflation. 
A)  The rate of economic growth. 
B)  The circular-flow of income. 
C)  The unemployment rate. 
D)  The rate of inflation.

Question 14

When measuring real GDP,what does the term 'chain volume measures' refer to?

Accepted Answer

This refers to the method of calculating

Question 15

Figure 12.1  
-The movement from A to E in Figure 12.1 illustrates

Accepted Answer

A)  negative technological change. 
B)  a decline in capital per worker. 
C)  zero returns to capital. 
D)  diminishing returns to labour. 
A)  negative technological change. 
B)  a decline in capital per worker. 
C)  zero returns to capital. 
D)  diminishing returns to labour.

Question 16

Explain why the increase in GDP per capita understates the whole effect of economic growth on the standard of living.

Accepted Answer

Economic growth has led not ju

Question 17

The measure of production that values output using a base year is called

Accepted Answer

A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground GDP. 
A)  value-added GDP. 
B)  nominal GDP. 
C)  real GDP. 
D)  underground GDP.

Question 18

Describe how the final value of an iPhone must be equal to the sum of income generated by the production of the iPhone.

Accepted Answer

Consider the value of a good such as an

Question 19

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

Accepted Answer

A) True 
 B)False

Question 20

If a country passes a labour law limiting the number of hours of work per week,ceteris paribus,GDP would ________ and leisure would ________.

Accepted Answer

A)  decrease; increase 
B)  increase; increase 
C)  decrease; decrease 
D)  increase; decrease 
A)  decrease; increase 
B)  increase; increase 
C)  decrease; decrease 
D)  increase; decrease

Which of the following describes the Soviet Union's economy between 1950 and the 1980s?

In the long run,a country will experience an increasing standard of living only if it experiences

To calculate GDP using the value-added method,we add up

'Potential GDP' is defined as the

Refer to Table 12.2 for the following questions. Table 12.2 -Refer to Table 12.2.Calculate the GDP deflator in 2013.

Suppose that real GDP for 2013 was $10 000 billion and real GDP for 2014 was $9500 billion.What is the rate of growth of real GDP?

An increase in the price level of 5 per cent between 2008 and 2009 would be implied by a change in the GDP deflator from in 2008 to in 2009.

How is the economic growth rate calculated?

Suggest two policies the government could pursue to help increase the accumulation of knowledge.

Suppose that real GDP for 2012 was $10 000 billion and real GDP for 2013 was $11 000 billion.What is the rate of growth of real GDP?

How are intermediate goods treated in the calculation of GDP?

Which of the following is not one of the four main policy concerns of Australian macroeconomic policy?

When measuring real GDP,what does the term 'chain volume measures' refer to?

Figure 12.1 -The movement from A to E in Figure 12.1 illustrates

Explain why the increase in GDP per capita understates the whole effect of economic growth on the standard of living.

The measure of production that values output using a base year is called

Describe how the final value of an iPhone must be equal to the sum of income generated by the production of the iPhone.

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

If a country passes a labour law limiting the number of hours of work per week,ceteris paribus,GDP would and leisure would .

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 12: GDP: Measuring Total Production and Income

Which of the following describes the Soviet Union's economy between 1950 and the 1980s?

In the long run,a country will experience an increasing standard of living only if it experiences

To calculate GDP using the value-added method,we add up

'Potential GDP' is defined as the

Refer to Table 12.2 for the following questions. Table 12.2 -Refer to Table 12.2.Calculate the GDP deflator in 2013.

Suppose that real GDP for 2013 was $10 000 billion and real GDP for 2014 was $9500 billion.What is the rate of growth of real GDP?

An increase in the price level of 5 per cent between 2008 and 2009 would be implied by a change in the GDP deflator from ________ in 2008 to ________ in 2009.

How is the economic growth rate calculated?

Suggest two policies the government could pursue to help increase the accumulation of knowledge.

Suppose that real GDP for 2012 was $10 000 billion and real GDP for 2013 was $11 000 billion.What is the rate of growth of real GDP?

How are intermediate goods treated in the calculation of GDP?

Which of the following is not one of the four main policy concerns of Australian macroeconomic policy?

When measuring real GDP,what does the term 'chain volume measures' refer to?

Figure 12.1 -The movement from A to E in Figure 12.1 illustrates

Explain why the increase in GDP per capita understates the whole effect of economic growth on the standard of living.

The measure of production that values output using a base year is called

Describe how the final value of an iPhone must be equal to the sum of income generated by the production of the iPhone.

The 'rule of 70' states that it takes approximately 70 years for a developing economy to become a developed economy once economic growth begins.

If a country passes a labour law limiting the number of hours of work per week,ceteris paribus,GDP would ________ and leisure would ________.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

An increase in the price level of 5 per cent between 2008 and 2009 would be implied by a change in the GDP deflator from in 2008 to in 2009.

If a country passes a labour law limiting the number of hours of work per week,ceteris paribus,GDP would and leisure would .