Question 1

If nominal GDP rises from $5 billion to $6 billion, when the GDP deflator goes from 100 to 110, real GDP

Accepted Answer

A) rises. 
B) falls. 
C) stays the same. 
D) could either be rising or falling. 
A) rises. 
B) falls. 
C) stays the same. 
D) could either be rising or falling. A

Question 2

An increase in growth rates will cause:

Accepted Answer

A) an inward shift of an economy's production possibilities curve. 
B) an outward shift of an economy's production possibilities curve. 
C) a movement from a point on an economy's production possibilities curve to a point inside the curve. 
D) an economy's production possibilities curve to slope upward. 
E) none of the above. 
A) an inward shift of an economy's production possibilities curve. 
B) an outward shift of an economy's production possibilities curve. 
C) a movement from a point on an economy's production possibilities curve to a point inside the curve. 
D) an economy's production possibilities curve to slope upward. 
E) none of the above. B

Question 3

Which of the following factors contribute to economic growth?

Accepted Answer

A) growth in physical capital 
B) an increase in the availability of natural resources 
C) an increase in the productivity of labor 
D) technological advances 
E) all of the above 
A) growth in physical capital 
B) an increase in the availability of natural resources 
C) an increase in the productivity of labor 
D) technological advances 
E) all of the above E

Question 4

Which of the following is false?

Accepted Answer

A) Accepting a reduction in current income to acquire education and training can increase future earning ability, which can raise the standard of living. 
B) Improvements in literacy stimulate economic growth by reducing barriers to the flow of information and raising labor productivity. 
C) One problem of providing enough education in poorer countries is that since children in developing countries are an important part of the labor force at a young age, there is a higher opportunity cost of education in terms of foregone contribution to family income. 
D) Investment alone does not guarantee economic growth per capita. 
E) None of the above are false; all are true. 
A) Accepting a reduction in current income to acquire education and training can increase future earning ability, which can raise the standard of living. 
B) Improvements in literacy stimulate economic growth by reducing barriers to the flow of information and raising labor productivity. 
C) One problem of providing enough education in poorer countries is that since children in developing countries are an important part of the labor force at a young age, there is a higher opportunity cost of education in terms of foregone contribution to family income. 
D) Investment alone does not guarantee economic growth per capita. 
E) None of the above are false; all are true.

Question 5

In a consumer-oriented economy, the decision to save in order to promote economic growth:

Accepted Answer

A) means a sacrifice of current consumption in order to enhance future consumption. 
B) must be enforced by high levels of taxation. 
C) cannot be expected to benefit future generations. 
D) none of the above. 
A) means a sacrifice of current consumption in order to enhance future consumption. 
B) must be enforced by high levels of taxation. 
C) cannot be expected to benefit future generations. 
D) none of the above.

Question 6

In some rural regions of the United States, residents harvest much of their food supplies directly from nature by hunting, fishing, and gathering.With regard to these subsistence activities:

Accepted Answer

A) GDP will overestimate the true value of the nation's production of final goods and services. 
B) GDP will underestimate the true value of the nation's production of final goods and services only when the income approach is used. 
C) GDP will correctly estimate the true value of the nation's production of final goods and services. 
D) GDP will underestimate the true value of the nation's production of final goods and services. 
A) GDP will overestimate the true value of the nation's production of final goods and services. 
B) GDP will underestimate the true value of the nation's production of final goods and services only when the income approach is used. 
C) GDP will correctly estimate the true value of the nation's production of final goods and services. 
D) GDP will underestimate the true value of the nation's production of final goods and services.

Question 7

Table 12-A
 $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Growth Rate } \
\text { (\%) }
\end{array} & \begin{array} { c } 
\text { Years to double } \
\text { econony }
\end{array} \
\hline \text { Nation A } & ? & 14 \
\hline \text { Nation B } & 10 & ? \
\hline \text { Nation C } & ? & 35 \
\hline \text { Nation D } & 7 & ? \
\hline
\end{array}$$
-Refer to Table 12-A.Which nation has the lowest growth rate?

Accepted Answer

A) Nation A 
B) Nation B 
C) Nation C 
D) Nation D 
A) Nation A 
B) Nation B 
C) Nation C 
D) Nation D

Question 8

Which of the government policies below is not likely to encourage per capita economic growth?

Accepted Answer

A) High taxes on companies that spend a lot on capital formation 
B) The use of tax revenues for investment and capital formation 
C) Special subsidies for capital-intensive forms of production 
D) Promotion of education and training programs for workers 
A) High taxes on companies that spend a lot on capital formation 
B) The use of tax revenues for investment and capital formation 
C) Special subsidies for capital-intensive forms of production 
D) Promotion of education and training programs for workers

Question 9

The rule of 70 which predicts the time required for the economy of a nation to double, is based on the mechanism of:

Accepted Answer

A) compound interest. 
B) capital formation. 
C) labor force productivity. 
D) capital investments. 
A) compound interest. 
B) capital formation. 
C) labor force productivity. 
D) capital investments.

Question 10

Which component of current U.S.GDP under the expenditure approach is most likely to be negative?

Accepted Answer

A) consumption 
B) government purchases 
C) net exports 
D) investment 
A) consumption 
B) government purchases 
C) net exports 
D) investment

Question 11

If real GDP decreased by 1% and nominal GDP increased by 2%, then output:

Accepted Answer

A) increased and the price level increased. 
B) increased and the price level decreased. 
C) decreased and the price level increased. 
D) decreased and the price level decreased. 
A) increased and the price level increased. 
B) increased and the price level decreased. 
C) decreased and the price level increased. 
D) decreased and the price level decreased.

Question 12

According to the rule of 70,

Accepted Answer

A) if a country is growing at 14% per year, its output will double in approximately 5 years. 
B) if a country is growing at 10% per year, its output will double in approximately 7 years. 
C) if a country is growing at 2% per year, its output will double in approximately 35 years. 
D) all of the above are true. 
E) none of the above are true. 
A) if a country is growing at 14% per year, its output will double in approximately 5 years. 
B) if a country is growing at 10% per year, its output will double in approximately 7 years. 
C) if a country is growing at 2% per year, its output will double in approximately 35 years. 
D) all of the above are true. 
E) none of the above are true.

Question 13

Which of the following is not included in GDP?

Accepted Answer

A) the fees for legal services rendered by your attorney 
B) the replacement of brake pads on your six-year-old vehicle 
C) cash income paid to a day laborer that is not reported to the tax authorities 
D) the payments for a chiropractor's services 
A) the fees for legal services rendered by your attorney 
B) the replacement of brake pads on your six-year-old vehicle 
C) cash income paid to a day laborer that is not reported to the tax authorities 
D) the payments for a chiropractor's services

Question 14

If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then

Accepted Answer

A) GDP comparisons between the countries would overstate the economic welfare of country A compared to B. 
B) GDP comparisons between the countries would understate the economic welfare of country A compared to B. 
C) it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. 
D) it would not introduce any bias in using GDP to compare economic welfare between the countries. 
E) none of the above would be true. 
A) GDP comparisons between the countries would overstate the economic welfare of country A compared to B. 
B) GDP comparisons between the countries would understate the economic welfare of country A compared to B. 
C) it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. 
D) it would not introduce any bias in using GDP to compare economic welfare between the countries. 
E) none of the above would be true.

Question 15

Which of the following is an example of an intermediate good?

Accepted Answer

A) a pair of jeans sold by a clothing retailer 
B) cloth sold to a suit manufacturer 
C) a share of Wal-Mart stock 
D) a used Ford Mustang sold from one neighbor to another 
A) a pair of jeans sold by a clothing retailer 
B) cloth sold to a suit manufacturer 
C) a share of Wal-Mart stock 
D) a used Ford Mustang sold from one neighbor to another

Question 16

Why has nominal GDP increased historically more rapidly than real GDP in the United States?

Accepted Answer

A) because of inflation 
B) because of deflation 
C) because of statistical discrepancies 
D) because of high interest rates 
E) because of none of the above 
A) because of inflation 
B) because of deflation 
C) because of statistical discrepancies 
D) because of high interest rates 
E) because of none of the above

Question 17

Transfer payments are included in which category under the expenditure approach to GDP accounting?

Accepted Answer

A) consumption 
B) government purchases 
C) investment 
D) net exports 
E) Transfer payments are not directly included in GDP calculations. 
A) consumption 
B) government purchases 
C) investment 
D) net exports 
E) Transfer payments are not directly included in GDP calculations.

Question 18

Nominal GDP will always equal real GDP:

Accepted Answer

A) if prices are declining. 
B) in the base year. 
C) if prices are increasing. 
D) if the economy's total production does not change. 
A) if prices are declining. 
B) in the base year. 
C) if prices are increasing. 
D) if the economy's total production does not change.

Question 19

If nominal GDP rises:

Accepted Answer

A) we can be sure the price level has risen. 
B) real GDP may rise or fall. 
C) real GDP must rise. 
D) real GDP must fall. 
A) we can be sure the price level has risen. 
B) real GDP may rise or fall. 
C) real GDP must rise. 
D) real GDP must fall.

Question 20

GDP equals $5 trillion.If consumption equals $3.5 trillion, investment equals $1 trillion, and government spending equals $1.5 trillion, then:

Accepted Answer

A) exports exceed imports by $1 trillion. 
B) imports exceed exports by $1 trillion. 
C) net exports equal zero. 
D) exports exceed imports by $1.5 trillion. 
E) imports exceed exports by $1.5 trillion. 
A) exports exceed imports by $1 trillion. 
B) imports exceed exports by $1 trillion. 
C) net exports equal zero. 
D) exports exceed imports by $1.5 trillion. 
E) imports exceed exports by $1.5 trillion.

If nominal GDP rises from $5 billion to $6 billion, when the GDP deflator goes from 100 to 110, real GDP

An increase in growth rates will cause:

Which of the following factors contribute to economic growth?

Which of the following is false?

In a consumer-oriented economy, the decision to save in order to promote economic growth:

In some rural regions of the United States, residents harvest much of their food supplies directly from nature by hunting, fishing, and gathering.With regard to these subsistence activities:

Table 12-A Growth Rate (\%) Years to double econony Nation A ? 14 Nation B 10 ? Nation C ? 35 Nation D 7 ? -Refer to Table 12-A.Which nation has the lowest growth rate?

Which of the government policies below is not likely to encourage per capita economic growth?

The rule of 70 which predicts the time required for the economy of a nation to double, is based on the mechanism of:

Which component of current U.S.GDP under the expenditure approach is most likely to be negative?

If real GDP decreased by 1% and nominal GDP increased by 2%, then output:

According to the rule of 70,

Which of the following is not included in GDP?

If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then

Which of the following is an example of an intermediate good?

Why has nominal GDP increased historically more rapidly than real GDP in the United States?

Transfer payments are included in which category under the expenditure approach to GDP accounting?

Nominal GDP will always equal real GDP:

If nominal GDP rises:

GDP equals $5 trillion.If consumption equals $3.5 trillion, investment equals $1 trillion, and government spending equals $1.5 trillion, then:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

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Exam 12: Economic Growth

If nominal GDP rises from $5 billion to $6 billion, when the GDP deflator goes from 100 to 110, real GDP

An increase in growth rates will cause:

Which of the following factors contribute to economic growth?

Which of the following is false?

In a consumer-oriented economy, the decision to save in order to promote economic growth:

In some rural regions of the United States, residents harvest much of their food supplies directly from nature by hunting, fishing, and gathering.With regard to these subsistence activities:

Table 12-A Growth Rate (\%) Years to double econony Nation A ? 14 Nation B 10 ? Nation C ? 35 Nation D 7 ? -Refer to Table 12-A.Which nation has the lowest growth rate?

Which of the government policies below is not likely to encourage per capita economic growth?

The rule of 70 which predicts the time required for the economy of a nation to double, is based on the mechanism of:

Which component of current U.S.GDP under the expenditure approach is most likely to be negative?

If real GDP decreased by 1% and nominal GDP increased by 2%, then output:

According to the rule of 70,

Which of the following is not included in GDP?

If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then

Which of the following is an example of an intermediate good?

Why has nominal GDP increased historically more rapidly than real GDP in the United States?

Transfer payments are included in which category under the expenditure approach to GDP accounting?

Nominal GDP will always equal real GDP:

If nominal GDP rises:

GDP equals $5 trillion.If consumption equals $3.5 trillion, investment equals $1 trillion, and government spending equals $1.5 trillion, then:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters