Question 1

One of the principles behind the concept of the circular flow is that

Accepted Answer

A)  in every economic exchange, the seller receives exactly the same amount that the buyer spends. 
B)  in every economic exchange, the seller receives less than the amount that the buyer spends. 
C)  the seller of goods receives exactly the same amount that the buyer spends, but the seller of resources receives less than the buyer spends. 
D)  in exchange involving products, the seller receives less than the amount the buyer spends, but in resource markets the seller receives more than the buyer spends. 
A)  in every economic exchange, the seller receives exactly the same amount that the buyer spends. 
B)  in every economic exchange, the seller receives less than the amount that the buyer spends. 
C)  the seller of goods receives exactly the same amount that the buyer spends, but the seller of resources receives less than the buyer spends. 
D)  in exchange involving products, the seller receives less than the amount the buyer spends, but in resource markets the seller receives more than the buyer spends.

Question 2

The two main methods of measuring GDP are

Accepted Answer

A)  the income approach and the expenditure approach. 
B)  the income approach and the receipts approach. 
C)  the goods approach and the services approach. 
D)  the saving approach and the investment approach. 
A)  the income approach and the expenditure approach. 
B)  the income approach and the receipts approach. 
C)  the goods approach and the services approach. 
D)  the saving approach and the investment approach.

Question 3

-According to the above table, national income is

Accepted Answer

A)  $12,637 billion. 
B)  $11,968 billion. 
C)  $11,943 billion. 
D)  $11,866 billion. 
A)  $12,637 billion. 
B)  $11,968 billion. 
C)  $11,943 billion. 
D)  $11,866 billion.

Question 4

Per capita real Gross Domestic Product (GDP)

Accepted Answer

A)  does not tell us the welfare level in the country. 
B)  tells us the overall welfare conditions of all the country's citizens. 
C)  gives only the welfare of the country's corporations. 
D)  gives only the welfare of the richest areas of the country. 
A)  does not tell us the welfare level in the country. 
B)  tells us the overall welfare conditions of all the country's citizens. 
C)  gives only the welfare of the country's corporations. 
D)  gives only the welfare of the richest areas of the country.

Question 5

The dollar value of total output in the United States

Accepted Answer

A)  equals the value of all physical goods sold in the United States. 
B)  equals the market value of all final goods and services produced in the United States. 
C)  equals all the value of U.S. stocks on the world's stock exchanges. 
D)  equals the value of all resources that can be found in the United States. 
A)  equals the value of all physical goods sold in the United States. 
B)  equals the market value of all final goods and services produced in the United States. 
C)  equals all the value of U.S. stocks on the world's stock exchanges. 
D)  equals the value of all resources that can be found in the United States.

Question 6

Which of the following transactions is included in the GDP?

Accepted Answer

A)  paying a lawyer for a divorce 
B)  giving your friend a gift worth of $20 
C)  selling your 2004 Toyota Camry 
D)  cleaning your own house 
A)  paying a lawyer for a divorce 
B)  giving your friend a gift worth of $20 
C)  selling your 2004 Toyota Camry 
D)  cleaning your own house

Question 7

-According to the above table, net domestic product is

Accepted Answer

A)  $12,531 billion. 
B)  $11,998 billion. 
C)  $11,892 billion. 
D)  $11,811 billion. 
A)  $12,531 billion. 
B)  $11,998 billion. 
C)  $11,892 billion. 
D)  $11,811 billion.

Question 8

-Using the above table, the Net Domestic Product (NDP) for the country is

Accepted Answer

A)  662. 
B)  84. 
C)  328. 
D)  338. 
A)  662. 
B)  84. 
C)  328. 
D)  338.

Question 9

The nominal value of an economic variable is

Accepted Answer

A)  the consumer price index. 
B)  the producer price. 
C)  expressed in terms of actual market prices at which goods are sold. 
D)  computed by taking the nominal value and dividing by the appropriate price index. 
A)  the consumer price index. 
B)  the producer price. 
C)  expressed in terms of actual market prices at which goods are sold. 
D)  computed by taking the nominal value and dividing by the appropriate price index.

Question 10

If deflation is occurring and nominal Gross Domestic Product (GDP) is increasing over time, then real Gross Domestic Product (GDP) is

Accepted Answer

A)  decreasing. 
B)  increasing at the same rate as nominal Gross Domestic Product (GDP). 
C)  increasing more slowly than nominal Gross Domestic Product (GDP). 
D)  increasing faster than nominal Gross Domestic Product (GDP). 
A)  decreasing. 
B)  increasing at the same rate as nominal Gross Domestic Product (GDP). 
C)  increasing more slowly than nominal Gross Domestic Product (GDP). 
D)  increasing faster than nominal Gross Domestic Product (GDP).

Question 11

Which of the following is TRUE about product markets?

Accepted Answer

A)  Goods and services flow from households to firms. 
B)  Goods and services flow from firms to households. 
C)  Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms. 
D)  Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households. 
A)  Goods and services flow from households to firms. 
B)  Goods and services flow from firms to households. 
C)  Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms. 
D)  Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households.

Question 12

Which of the following is included in the calculation of Gross Domestic Product (GDP) using the income approach? I. Wages and salaries.
II) Net exports.

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 13

A farmer buys seed for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30 cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes bread, which is sold to the grocer for 90 cents. The grocer sells the bread for $1.30. What is the value added for the grocer?

Accepted Answer

A)  15 cents 
B)  40 cents 
C)  35 cents 
D)  $1.30 
A)  15 cents 
B)  40 cents 
C)  35 cents 
D)  $1.30

Question 14

The circular flow of income shows

Accepted Answer

A)  goods, services, and money payments flowing in the same direction. 
B)  goods and money payments flowing in one direction and services flowing in the opposite direction. 
C)  goods and services flowing in one direction and money payments in the other direction. 
D)  goods flowing in one direction and services and money payments flowing in the other direction. 
A)  goods, services, and money payments flowing in the same direction. 
B)  goods and money payments flowing in one direction and services flowing in the opposite direction. 
C)  goods and services flowing in one direction and money payments in the other direction. 
D)  goods flowing in one direction and services and money payments flowing in the other direction.

Question 15

The amount of income households receive after personal income taxes have been paid is known as

Accepted Answer

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

Question 16

Which of the following is included in gross private domestic investment? I. The purchase of new capital goods
II) An increase in business inventories

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 17

Any use of today's resources to expand tomorrow's production or consumption 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 18

-Using the above table, the Disposable Personal Income (DPI) for the country is

Accepted Answer

A)  78. 
B)  220. 
C)  147. 
D)  293. 
A)  78. 
B)  220. 
C)  147. 
D)  293.

Question 19

-Refer to the above figure. The top two arrows of the figure refer to the product markets. The bottom arrows refer to the factor markets. Which arrow represents the total monetary value of all goods and services?

Accepted Answer

A)  Arrow A 
B)  Arrow B 
C)  Arrow C 
D)  Arrow D 
A)  Arrow A 
B)  Arrow B 
C)  Arrow C 
D)  Arrow D

Question 20

Suppose that in 2018, the total value of all final services produced in a nation was $300 billion; the total value of all final goods produced in that nation was $400 billion; and the total value of all final goods and services produced by that nation's firms in other countries was $300 billion. Gross domestic product (GDP) was

Accepted Answer

A)  $700 billion. 
B)  $500 billion. 
C)  $900 billion. 
D)  $800 billion. 
A)  $700 billion. 
B)  $500 billion. 
C)  $900 billion. 
D)  $800 billion.

Exam 8: Measuring the Economys Performance

One of the principles behind the concept of the circular flow is that

The two main methods of measuring GDP are

-According to the above table, national income is

Per capita real Gross Domestic Product (GDP)

The dollar value of total output in the United States

Which of the following transactions is included in the GDP?

-According to the above table, net domestic product is

-Using the above table, the Net Domestic Product (NDP) for the country is

The nominal value of an economic variable is

If deflation is occurring and nominal Gross Domestic Product (GDP) is increasing over time, then real Gross Domestic Product (GDP) is

Which of the following is TRUE about product markets?

Which of the following is included in the calculation of Gross Domestic Product (GDP) using the income approach? I. Wages and salaries. II) Net exports.

The circular flow of income shows

The amount of income households receive after personal income taxes have been paid is known as

Which of the following is included in gross private domestic investment? I. The purchase of new capital goods II) An increase in business inventories

Any use of today's resources to expand tomorrow's production or consumption is a(n)

-Using the above table, the Disposable Personal Income (DPI) for the country is

-Refer to the above figure. The top two arrows of the figure refer to the product markets. The bottom arrows refer to the factor markets. Which arrow represents the total monetary value of all goods and services?

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