Question 1

According to the circular-flow diagram, which of the following economic agents engage in consumer spending?

Accepted Answer

A) firms 
B) households 
C) factor markets 
D) financial markets 
A) firms 
B) households 
C) factor markets 
D) financial markets

Question 2

The consumer price index reflects:

Accepted Answer

A) changes in the prices of goods and services typically purchased by consumers. 
B) the level of prices for intermediate goods and services purchased by business. 
C) the level of prices for raw materials. 
D) the prices of all goods and services computed from the ratio of nominal GDP to real GDP. 
A) changes in the prices of goods and services typically purchased by consumers. 
B) the level of prices for intermediate goods and services purchased by business. 
C) the level of prices for raw materials. 
D) the prices of all goods and services computed from the ratio of nominal GDP to real GDP.

Question 3

The GDP deflator for a given year is equal to 100 times nominal GDP for that year minus real GDP for that year.

Accepted Answer

A) True 
 B)False

Question 4

Use the following to answer questions :
Table: Per Capita GDP
  
-(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of real GDP from 2011 to 2014 was:

Accepted Answer

A) 10%. 
B) 20%. 
C) 25%. 
D) 33%. 
A) 10%. 
B) 20%. 
C) 25%. 
D) 33%.

Question 5

Real GDP tends to understate our economic well-being because it:

Accepted Answer

A) includes the value of services produced in the home. 
B) excludes the value of leisure. 
C) includes expenditures on crime prevention equipment. 
D) includes health care costs related to the consumption of cigarettes. 
A) includes the value of services produced in the home. 
B) excludes the value of leisure. 
C) includes expenditures on crime prevention equipment. 
D) includes health care costs related to the consumption of cigarettes.

Question 6

Use the following to answer questions :
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in consumer spending, which of the following is likely to happen?

Accepted Answer

A) an increase in the nominal GDP 
B) an increase in the real GDP 
C) an increase in the unemployment rate 
D) an increase in the inflation rate 
A) an increase in the nominal GDP 
B) an increase in the real GDP 
C) an increase in the unemployment rate 
D) an increase in the inflation rate

Question 7

Use the following to answer questions :
Table: Price and Output Data  
-(Table: Price and Output Data) Look at the table Price and Output Data. Real GDP in year 5 is:

Accepted Answer

A) $1.29. 
B) $16. 
C) $35. 
D) $63. 
A) $1.29. 
B) $16. 
C) $35. 
D) $63.

Question 8

Which of the following transactions is included in the nation's gross domestic product?

Accepted Answer

A) A college student buys a used textbook from his roommate. 
B) A construction company purchases lumber to build a new house. 
C) A college student buys a pizza and has it delivered to her dorm room. 
D) A group of college students volunteer to rake leaves at an assisted living facility for senior citizens. 
A) A college student buys a used textbook from his roommate. 
B) A construction company purchases lumber to build a new house. 
C) A college student buys a pizza and has it delivered to her dorm room. 
D) A group of college students volunteer to rake leaves at an assisted living facility for senior citizens.

Question 9

Use the following to answer questions :  
-(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. Between 2010 and 2011, nominal GDP:

Accepted Answer

A) increased by 12.5%. 
B) decreased by 12.5%. 
C) increased by 16.67%. 
D) increased by 31.25%. 
A) increased by 12.5%. 
B) decreased by 12.5%. 
C) increased by 16.67%. 
D) increased by 31.25%.

Question 10

Use the following to answer questions:
Table: Real and Nominal Output  
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal output in year 4 is:

Accepted Answer

A) $70. 
B) $120. 
C) $140. 
D) $280. 
A) $70. 
B) $120. 
C) $140. 
D) $280.

Question 11

The scale most often used to compare economic performance in other years is:

Accepted Answer

A) the circular-flow diagram. 
B) GDP. 
C) the business cycle. 
D) fiscal policy. 
A) the circular-flow diagram. 
B) GDP. 
C) the business cycle. 
D) fiscal policy.

Question 12

In the circular-flow diagram, households:

Accepted Answer

A) supply goods. 
B) supply services. 
C) buy resources. 
D) buy goods and services. 
A) supply goods. 
B) supply services. 
C) buy resources. 
D) buy goods and services.

Question 13

The circular-flow diagram illustrates:

Accepted Answer

A) the minimum wage state by state. 
B) fluctuations in exchange rates. 
C) changes in worker productivity. 
D) the key concepts in the national accounts. 
A) the minimum wage state by state. 
B) fluctuations in exchange rates. 
C) changes in worker productivity. 
D) the key concepts in the national accounts.

Question 14

Consider an economy that produces only DVDs and DVD players. If 10 DVDs are sold at $20 each and 5 DVD players are sold at $100 each, then nominal GDP is:

Accepted Answer

A) $100. 
B) $700. 
C) $1,100. 
D) $900. 
A) $100. 
B) $700. 
C) $1,100. 
D) $900.

Question 15

The calculation of GDP includes the value of all of the following goods EXCEPT:

Accepted Answer

A) Firestone tires sold at your local garage. 
B) Bridgestone tires purchased by Ford Motor Co. 
C) Goodyear tires purchased by the United States Secret Service. 
D) Michelin tires purchased by Canadian car collectors. 
A) Firestone tires sold at your local garage. 
B) Bridgestone tires purchased by Ford Motor Co. 
C) Goodyear tires purchased by the United States Secret Service. 
D) Michelin tires purchased by Canadian car collectors.

Question 16

The producer price index is also known as the wholesale price index.

Accepted Answer

A) True 
 B)False

Question 17

The price index in a given year is the cost of the market basket in that year _____ the cost of the market basket in the base year times 100.

Accepted Answer

A) divided by 
B) times 
C) minus 
D) plus 
A) divided by 
B) times 
C) minus 
D) plus

Question 18

Real GDP tends to overstate our economic well-being by including:

Accepted Answer

A) expenditures on crime prevention. 
B) payments for cleaning up the environment. 
C) repairs to structures destroyed by storms. 
D) expenditures on crime prevention, payments for cleaning up the environment, and repairs to structures destroyed by storms. 
A) expenditures on crime prevention. 
B) payments for cleaning up the environment. 
C) repairs to structures destroyed by storms. 
D) expenditures on crime prevention, payments for cleaning up the environment, and repairs to structures destroyed by storms.

Question 19

Private savings is equal to:

Accepted Answer

A) disposable income less taxes. 
B) disposable income less consumption. 
C) wealth. 
D) wealth plus government transfer payments. 
A) disposable income less taxes. 
B) disposable income less consumption. 
C) wealth. 
D) wealth plus government transfer payments.

Question 20

A firm is an organization that produces goods and/or services for sale.

Accepted Answer

A) True 
 B)False

According to the circular-flow diagram, which of the following economic agents engage in consumer spending?

The consumer price index reflects:

The GDP deflator for a given year is equal to 100 times nominal GDP for that year minus real GDP for that year.

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of real GDP from 2011 to 2014 was:

Real GDP tends to understate our economic well-being because it:

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Real GDP in year 5 is:

Which of the following transactions is included in the nation's gross domestic product?

Use the following to answer questions : -(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. Between 2010 and 2011, nominal GDP:

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal output in year 4 is:

The scale most often used to compare economic performance in other years is:

In the circular-flow diagram, households:

The circular-flow diagram illustrates:

Consider an economy that produces only DVDs and DVD players. If 10 DVDs are sold at $20 each and 5 DVD players are sold at $100 each, then nominal GDP is:

The calculation of GDP includes the value of all of the following goods EXCEPT:

The producer price index is also known as the wholesale price index.

The price index in a given year is the cost of the market basket in that year _____ the cost of the market basket in the base year times 100.

Real GDP tends to overstate our economic well-being by including:

Private savings is equal to:

A firm is an organization that produces goods and/or services for sale.

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 7: Gdp and Cpi: Tracking the Macroeconomy

According to the circular-flow diagram, which of the following economic agents engage in consumer spending?

The consumer price index reflects:

The GDP deflator for a given year is equal to 100 times nominal GDP for that year minus real GDP for that year.

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of real GDP from 2011 to 2014 was:

Real GDP tends to understate our economic well-being because it:

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Real GDP in year 5 is:

Which of the following transactions is included in the nation's gross domestic product?

Use the following to answer questions : -(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. Between 2010 and 2011, nominal GDP:

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal output in year 4 is:

The scale most often used to compare economic performance in other years is:

In the circular-flow diagram, households:

The circular-flow diagram illustrates:

Consider an economy that produces only DVDs and DVD players. If 10 DVDs are sold at $20 each and 5 DVD players are sold at $100 each, then nominal GDP is:

The calculation of GDP includes the value of all of the following goods EXCEPT:

The producer price index is also known as the wholesale price index.

The price index in a given year is the cost of the market basket in that year _____ the cost of the market basket in the base year times 100.

Real GDP tends to overstate our economic well-being by including:

Private savings is equal to:

A firm is an organization that produces goods and/or services for sale.

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters