Question 1

Which of the following will lead to GDP underestimating our true output?

Accepted Answer

A) Mary begins a catering business. 
B) James begins drawing Social Security benefits upon his retirement. 
C) David accepts a position as a software specialist at Microsoft. 
D) Gretchen begins an accounting and bookkeeping service in her home, accepting cash as payment, which is not reported to tax authorities. 
E) None of the above. 
A) Mary begins a catering business. 
B) James begins drawing Social Security benefits upon his retirement. 
C) David accepts a position as a software specialist at Microsoft. 
D) Gretchen begins an accounting and bookkeeping service in her home, accepting cash as payment, which is not reported to tax authorities. 
E) None of the above.

Question 2

If indirect business taxes and depreciation were added to the national income, we obtain:

Accepted Answer

A) Net National product. 
B) Gross National Product. 
C) Gross Domestic Product. 
D) Personal Income. 
A) Net National product. 
B) Gross National Product. 
C) Gross Domestic Product. 
D) Personal Income.

Question 3

Which of the following would not be considered an investment in human capital?

Accepted Answer

A) education 
B) training programs 
C) transportation infrastructure 
D) literacy programs 
A) education 
B) training programs 
C) transportation infrastructure 
D) literacy programs

Question 4

Net exports are defined as:

Accepted Answer

A) exports plus imports. 
B) exports minus imports. 
C) imports minus exports. 
D) exports plus imports minus tariffs. 
A) exports plus imports. 
B) exports minus imports. 
C) imports minus exports. 
D) exports plus imports minus tariffs.

Question 5

Real GDP is:

Accepted Answer

A) the base year market value of all final goods and services produced domestically during a given period. 
B) the current year market value of all final goods and services produced domestically during a given period. 
C) usually greater than nominal GDP. 
D) the current year market value of domestic production of intermediate goods. 
A) the base year market value of all final goods and services produced domestically during a given period. 
B) the current year market value of all final goods and services produced domestically during a given period. 
C) usually greater than nominal GDP. 
D) the current year market value of domestic production of intermediate goods.

Question 6

Personal income:

Accepted Answer

A) is a measure of the income earned by owners of resources used in making final goods and services. 
B) is a measure of the income received by persons. 
C) is aggregate income minus the statistical discrepancy. 
D) equals GDP minus depreciation. 
E) measures the total amount of income received by households and noncorporate businesses. 
A) is a measure of the income earned by owners of resources used in making final goods and services. 
B) is a measure of the income received by persons. 
C) is aggregate income minus the statistical discrepancy. 
D) equals GDP minus depreciation. 
E) measures the total amount of income received by households and noncorporate businesses.

Question 7

In a fully employed economy, invention and discovery:

Accepted Answer

A) are automatic. 
B) are achieved through sacrifices in current consumption. 
C) have negative opportunity costs. 
D) All of the above are correct. 
A) are automatic. 
B) are achieved through sacrifices in current consumption. 
C) have negative opportunity costs. 
D) All of the above are correct.

Question 8

GDP equals $8 trillion.If consumption equals $5.5 trillion, investment equals $500 billion, and government spending equals $1.5 trillion, then:

Accepted Answer

A) exports exceed imports by $500 billion. 
B) imports exceed exports by $500 billion. 
C) net exports equal zero. 
D) exports exceed imports by $1 trillion. 
E) imports exceed exports by $1 trillion. 
A) exports exceed imports by $500 billion. 
B) imports exceed exports by $500 billion. 
C) net exports equal zero. 
D) exports exceed imports by $1 trillion. 
E) imports exceed exports by $1 trillion.

Question 9

Government purchases, under the expenditure approach to GDP accounting, includes all of the following except:

Accepted Answer

A) welfare payments. 
B) salaries of senators. 
C) fighter jets purchased by the government. 
D) the military payroll. 
A) welfare payments. 
B) salaries of senators. 
C) fighter jets purchased by the government. 
D) the military payroll.

Question 10

Which of the following is a problem with using real GDP as a measure of economic well-being?

Accepted Answer

A) does not account for inflation 
B) does not account for production within the household 
C) does not account for production by foreign firms producing inside the U.S. 
D) all of the above 
A) does not account for inflation 
B) does not account for production within the household 
C) does not account for production by foreign firms producing inside the U.S. 
D) all of the above

Question 11

If a nation's imports exceed its exports:

Accepted Answer

A) net exports will be positive. 
B) GDP will be less than the sum of consumption, investment, and government purchases. 
C) GDP will be greater than the sum of consumption, investment, and government purchases. 
D) none of the above apply. 
A) net exports will be positive. 
B) GDP will be less than the sum of consumption, investment, and government purchases. 
C) GDP will be greater than the sum of consumption, investment, and government purchases. 
D) none of the above apply.

Question 12

The expenditure method of measuring GDP is calculated by adding up:

Accepted Answer

A) the final goods and services produced domestically during a given period. 
B) C + I + G + (X - M). 
C) domestic production of final goods and services for consumers, firms, government, and the international sector (through net exports). 
D) all of the above. 
A) the final goods and services produced domestically during a given period. 
B) C + I + G + (X - M). 
C) domestic production of final goods and services for consumers, firms, government, and the international sector (through net exports). 
D) all of the above.

Question 13

Which of the following is not considered a factor contributing to economic growth?

Accepted Answer

A) Growth in the quantity and quality of labor resources used 
B) Growth in physical capital inputs (machines, tools, buildings, and inventories) 
C) Growth in the money supply relative to the growth of final goods and services 
D) Government protection of property rights 
A) Growth in the quantity and quality of labor resources used 
B) Growth in physical capital inputs (machines, tools, buildings, and inventories) 
C) Growth in the money supply relative to the growth of final goods and services 
D) Government protection of property rights

Question 14

Which of the following is not considered a factor that contributes to economic growth?

Accepted Answer

A) increased labor productivity 
B) increased infant mortality rates 
C) technological advances 
D) the migration of resources from areas of low productivity to areas of high productivity 
A) increased labor productivity 
B) increased infant mortality rates 
C) technological advances 
D) the migration of resources from areas of low productivity to areas of high productivity

Question 15

Exhibit 12-A
GDP - Expenditure Approach  
-Refer to Exhibit 12-A.What conclusion regarding exports and imports can be arrived at looking at the data provided?

Accepted Answer

A) Exports exceeded imports. 
B) Imports exceeded exports. 
C) Exports equaled imports. 
D) Data insufficient to arrive at any conclusion. 
A) Exports exceeded imports. 
B) Imports exceeded exports. 
C) Exports equaled imports. 
D) Data insufficient to arrive at any conclusion.

Question 16

Which of the following did not result in economic growth?

Accepted Answer

A) Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California 
B) Cyrus McCormack inventing a threshing machine for harvesting grains 
C) After World War II, the U.S. instituting the GI bill, which provided education subsidies to soldiers being released from service duty 
D) Many citizens emigrating from a nation when a politically repressive regime takes office 
A) Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California 
B) Cyrus McCormack inventing a threshing machine for harvesting grains 
C) After World War II, the U.S. instituting the GI bill, which provided education subsidies to soldiers being released from service duty 
D) Many citizens emigrating from a nation when a politically repressive regime takes office

Question 17

Nominal GDP is $10,000 billion in 2000, but real GDP is only $9,000.It follows that:

Accepted Answer

A) the GDP deflator is equal to 111. 
B) the GDP deflator is equal to 100. 
C) the GDP deflator is equal to 90. 
D) prices must have decreased relative to the base year. 
A) the GDP deflator is equal to 111. 
B) the GDP deflator is equal to 100. 
C) the GDP deflator is equal to 90. 
D) prices must have decreased relative to the base year.

Question 18

The per-worker production function is ____ sloped and ____ at a(n) ____ rate.

Accepted Answer

A) negatively; decreases; diminishing 
B) negatively; decreases; increasing 
C) positively; increases; increasing 
D) positively; increases; diminishing 
A) negatively; decreases; diminishing 
B) negatively; decreases; increasing 
C) positively; increases; increasing 
D) positively; increases; diminishing

Question 19

A country will roughly double its GDP in five years if its annual growth rate is:

Accepted Answer

A) 5 percent. 
B) 7 percent. 
C) 12 percent. 
D) 14 percent. 
E) 20 percent. 
A) 5 percent. 
B) 7 percent. 
C) 12 percent. 
D) 14 percent. 
E) 20 percent.

Question 20

Over the last several decades, the amount of government investment in U.S.infrastructure has:

Accepted Answer

A) remained the same. 
B) decreased. 
C) increased marginally. 
D) increased substantially. 
A) remained the same. 
B) decreased. 
C) increased marginally. 
D) increased substantially.

Which of the following will lead to GDP underestimating our true output?

If indirect business taxes and depreciation were added to the national income, we obtain:

Which of the following would not be considered an investment in human capital?

Net exports are defined as:

Real GDP is:

Personal income:

In a fully employed economy, invention and discovery:

GDP equals $8 trillion.If consumption equals $5.5 trillion, investment equals $500 billion, and government spending equals $1.5 trillion, then:

Government purchases, under the expenditure approach to GDP accounting, includes all of the following except:

Which of the following is a problem with using real GDP as a measure of economic well-being?

If a nation's imports exceed its exports:

The expenditure method of measuring GDP is calculated by adding up:

Which of the following is not considered a factor contributing to economic growth?

Which of the following is not considered a factor that contributes to economic growth?

Exhibit 12-A GDP - Expenditure Approach -Refer to Exhibit 12-A.What conclusion regarding exports and imports can be arrived at looking at the data provided?

Which of the following did not result in economic growth?

Nominal GDP is $10,000 billion in 2000, but real GDP is only $9,000.It follows that:

The per-worker production function is sloped and at a(n) rate.

A country will roughly double its GDP in five years if its annual growth rate is:

Over the last several decades, the amount of government investment in U.S.infrastructure has:

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

Exam 12: Economic Growth

Which of the following will lead to GDP underestimating our true output?

If indirect business taxes and depreciation were added to the national income, we obtain:

Which of the following would not be considered an investment in human capital?

Net exports are defined as:

Real GDP is:

Personal income:

In a fully employed economy, invention and discovery:

GDP equals $8 trillion.If consumption equals $5.5 trillion, investment equals $500 billion, and government spending equals $1.5 trillion, then:

Government purchases, under the expenditure approach to GDP accounting, includes all of the following except:

Which of the following is a problem with using real GDP as a measure of economic well-being?

If a nation's imports exceed its exports:

The expenditure method of measuring GDP is calculated by adding up:

Which of the following is not considered a factor contributing to economic growth?

Which of the following is not considered a factor that contributes to economic growth?

Exhibit 12-A GDP - Expenditure Approach -Refer to Exhibit 12-A.What conclusion regarding exports and imports can be arrived at looking at the data provided?

Which of the following did not result in economic growth?

Nominal GDP is $10,000 billion in 2000, but real GDP is only $9,000.It follows that:

The per-worker production function is ____ sloped and ____ at a(n) ____ rate.

A country will roughly double its GDP in five years if its annual growth rate is:

Over the last several decades, the amount of government investment in U.S.infrastructure has:

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

The per-worker production function is sloped and at a(n) rate.