Question 1

In the simple circular flow

Accepted Answer

A)  businesses trade goods and services for resources in the product market. 
B)  consumers trade resources for goods and services in the factor market. 
C)  consumers trade goods and services for monetary payments in the factor market. 
D)  producers trade goods and services for monetary payments in the product market. 
A)  businesses trade goods and services for resources in the product market. 
B)  consumers trade resources for goods and services in the factor market. 
C)  consumers trade goods and services for monetary payments in the factor market. 
D)  producers trade goods and services for monetary payments in the product market.

Question 2

Income received by the factors of production is called

Accepted Answer

A)  gross domestic income. 
B)  disposable personal income. 
C)  personal income. 
D)  national income. 
A)  gross domestic income. 
B)  disposable personal income. 
C)  personal income. 
D)  national income.

Question 3

A purchasing power parity index would help you

Accepted Answer

A)  predict changes in U.S. real GDP. 
B)  identify those goods and services that are becoming relatively more important in chain-weighted GDP. 
C)  make international comparisons of living standards. 
D)  estimate the growth rate of U.S. personal income. 
A)  predict changes in U.S. real GDP. 
B)  identify those goods and services that are becoming relatively more important in chain-weighted GDP. 
C)  make international comparisons of living standards. 
D)  estimate the growth rate of U.S. personal income.

Question 4

What is the proper formula for computing the GDP using the expenditure approach?

Accepted Answer

A)  S + I + G + X 
B)  C + I + G + X 
C)  C + O + G + S 
D)  0.5(w + r) + k 
A)  S + I + G + X 
B)  C + I + G + X 
C)  C + O + G + S 
D)  0.5(w + r) + k

Question 5

Which one of the following is a durable consumer good?

Accepted Answer

A)  a home computer 
B)  gasoline 
C)  food 
D)  office supplies that will be used up this year 
A)  a home computer 
B)  gasoline 
C)  food 
D)  office supplies that will be used up this year

Question 6

Which of the following is from the calculation of investment for GDP purposes?

Accepted Answer

A)  the purchase of new capital goods 
B)  changes in business inventories 
C)  new home construction 
D)  all of the above 
A)  the purchase of new capital goods 
B)  changes in business inventories 
C)  new home construction 
D)  all of the above

Question 7

-Refer to the above figure. Which arrows represent items that are measured in dollar terms?

Accepted Answer

A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C 
A)  Arrows A and B 
B)  Arrows C and D 
C)  Arrows A and D 
D)  Arrows B and C

Question 8

National income is

Accepted Answer

A)  the total of factor payments to owners of resources. 
B)  the dollar value of all final goods and services produced in a country in a year. 
C)  the amount of monetary payments households actually receive before paying personal income taxes. 
D)  the amount of monetary payments households actually receive after paying personal income taxes. 
A)  the total of factor payments to owners of resources. 
B)  the dollar value of all final goods and services produced in a country in a year. 
C)  the amount of monetary payments households actually receive before paying personal income taxes. 
D)  the amount of monetary payments households actually receive after paying personal income taxes.

Question 9

If no other national income variables change when ________ increase, then GDP will decrease.

Accepted Answer

A)  inventories 
B)  imports 
C)  investments 
D)  levels of pollution 
A)  inventories 
B)  imports 
C)  investments 
D)  levels of pollution

Question 10

In the circular flow model, profits are considered to be

Accepted Answer

A)  a subtraction from the Gross Domestic Product (GDP). 
B)  a cost of doing business. 
C)  equal to zero, or else the circular flow would be out of balance. 
D)  a form of interest payment. 
A)  a subtraction from the Gross Domestic Product (GDP). 
B)  a cost of doing business. 
C)  equal to zero, or else the circular flow would be out of balance. 
D)  a form of interest payment.

Question 11

C + net I + G + X equals

Accepted Answer

A)  GDP. 
B)  DPI. 
C)  NDP. 
D)  PI. 
A)  GDP. 
B)  DPI. 
C)  NDP. 
D)  PI.

Question 12

A consumer good that is used up within three years is a(n)

Accepted Answer

A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment. 
A)  durable consumer good. 
B)  nondurable consumer good. 
C)  service. 
D)  investment.

Question 13

Suppose that in 2018, nominal Gross Domestic Product (GDP) for the economy of Chiconia was $10 trillion and the Gross Domestic Product (GDP) price index was 200.0. What is Chiconia's real Gross Domestic Product (GDP) in 2018?

Accepted Answer

A)  $5 trillion 
B)  $10 trillion 
C)  $20 trillion 
D)  $200 trillion 
A)  $5 trillion 
B)  $10 trillion 
C)  $20 trillion 
D)  $200 trillion

Question 14

Because of improved productivity, wages increase 10 percent. As a result, gross domestic income increases. What happens to Gross Domestic Product?

Accepted Answer

A)  Gross Domestic Product also increases since consumption expenditures would increase. 
B)  Gross Domestic Product decreases as people pay more taxes on their higher incomes. 
C)  Gross Domestic Product would not change since consumption expenditures would rise but investment spending would fall. 
D)  Gross Domestic Product would decrease because businesses are spending more on wages. 
A)  Gross Domestic Product also increases since consumption expenditures would increase. 
B)  Gross Domestic Product decreases as people pay more taxes on their higher incomes. 
C)  Gross Domestic Product would not change since consumption expenditures would rise but investment spending would fall. 
D)  Gross Domestic Product would decrease because businesses are spending more on wages.

Question 15

Between two years, GDP at constant prices increased by 5 percent while GDP at current prices increased by 8 percent. Based on this information, the price level

Accepted Answer

A)  increased by 3 percent. 
B)  increased by 13 percent. 
C)  decreased by 3 percent. 
D)  decreased by 13 percent. 
A)  increased by 3 percent. 
B)  increased by 13 percent. 
C)  decreased by 3 percent. 
D)  decreased by 13 percent.

Question 16

If disposable personal income (DPI) = $800 and personal income taxes = $100, then what is personal income (PI)?

Accepted Answer

A)  $900 
B)  $800 
C)  $700 
D)  can't tell from the information provided 
A)  $900 
B)  $800 
C)  $700 
D)  can't tell from the information provided

Question 17

-Refer to the above table. Real GDP in 2018 is

Accepted Answer

A)  103.1. 
B)  128.9. 
C)  775.9. 
D)  824.8. 
A)  103.1. 
B)  128.9. 
C)  775.9. 
D)  824.8.

Question 18

-According to the above table, national income is

Accepted Answer

A)  $2,190. 
B)  $2,550. 
C)  $2,465. 
D)  $2,750. 
A)  $2,190. 
B)  $2,550. 
C)  $2,465. 
D)  $2,750.

Question 19

Which of the following are examples of the gross private domestic investment component of Gross Domestic Product (GDP)? I. The purchase of production equipment
II) An increase in finished goods inventory

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Question 20

-When using the income approach to estimate Gross Domestic Product (GDP), which of the following would NOT be included?

Accepted Answer

A)  the implicit rental value of owner-occupied housing 
B)  proprietors' income 
C)  personal consumption expenditures 
D)  net interest received by households 
A)  the implicit rental value of owner-occupied housing 
B)  proprietors' income 
C)  personal consumption expenditures 
D)  net interest received by households

Exam 8: Measuring the Economys Performance

In the simple circular flow

Income received by the factors of production is called

A purchasing power parity index would help you

What is the proper formula for computing the GDP using the expenditure approach?

Which one of the following is a durable consumer good?

Which of the following is from the calculation of investment for GDP purposes?

-Refer to the above figure. Which arrows represent items that are measured in dollar terms?

National income is

If no other national income variables change when ________ increase, then GDP will decrease.

In the circular flow model, profits are considered to be

C + net I + G + X equals

A consumer good that is used up within three years is a(n)

Suppose that in 2018, nominal Gross Domestic Product (GDP) for the economy of Chiconia was $10 trillion and the Gross Domestic Product (GDP) price index was 200.0. What is Chiconia's real Gross Domestic Product (GDP) in 2018?

Because of improved productivity, wages increase 10 percent. As a result, gross domestic income increases. What happens to Gross Domestic Product?

Between two years, GDP at constant prices increased by 5 percent while GDP at current prices increased by 8 percent. Based on this information, the price level

If disposable personal income (DPI) = $800 and personal income taxes = $100, then what is personal income (PI)?

-Refer to the above table. Real GDP in 2018 is

-According to the above table, national income is

Which of the following are examples of the gross private domestic investment component of Gross Domestic Product (GDP)? I. The purchase of production equipment II) An increase in finished goods inventory

-When using the income approach to estimate Gross Domestic Product (GDP), which of the following would NOT be included?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters