Question 1

-In the above figure, which point represents an economy which is at the peak part of a business cycle?

Accepted Answer

A)  point F 
B)  point G 
C)  point I 
D)  point K

Question 2

Compensation paid to employees represented ________ of GDP for the United States in 2016.

Accepted Answer

A)  about 5 percent 
B)  approximately 15 percent 
C)  35 percent 
D)  more than 50 percent

Question 3

-The figure above shows the price of a DVD player from 2003 to 2007.
a) What type of graph is illustrated above?
b) What is the trend in the price of a DVD player?

Accepted Answer

The answer of 
-The figure above shows the price of...

Question 4

The income approach measures GDP by adding together compensation of employees, proprietors' income,

Accepted Answer

A)  net investment, saving, and farmers' income. 
B)  net interest, rental income, and corporate profits. 
C)  net investment, rental income, and corporate profits. 
D)  net saving, investment income, and profits.

Question 5

In the circular flow of income

Accepted Answer

A)  households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. 
B)  households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. 
C)  households sell goods and services while firms sell factors. 
D)  households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.

Question 6

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

Accepted Answer

A)  net investment. 
B)  gross investment minus depreciation. 
C)  gross investment plus depreciation. 
D)  gross investment.

Question 7

In the circular flow diagram, aggregate expenditure includes the sum of

Accepted Answer

A)  saving and investment. 
B)  consumption and investment. 
C)  consumption, investment, and saving. 
D)  income and saving.

Question 8

-The above table shows some national income accounting data for a nation. In this nation, gross domestic product is equal to ________ billion.

Accepted Answer

A)  $2,000 
B)  $2,300 
C)  $2,500 
D)  $2,800

Question 9

An economic expansion rather than a recession occurs

Accepted Answer

A)  when the federal budget is balanced. 
B)  when the unemployment rate falls below 5 percent. 
C)  when growth in real GDP is positive. 
D)  when the unemployment rate is not changing.

Question 10

Net exports of goods and services equal the

Accepted Answer

A)  exports of goods and services divided by the imports of goods and services. 
B)  exports of goods and services plus the imports of goods and services. 
C)  exports of goods and services minus the imports of goods and services. 
D)  imports of goods and services minus the exports of goods and services.

Question 11

Which of the following is included in government expenditures when measuring GDP?

Accepted Answer

A)  Social Security payments 
B)  unemployment compensation payments 
C)  pension payment made to past presidents 
D)  the current president's salary

Question 12

GDP counts only final goods and services because this

Accepted Answer

A)  method avoids including any goods that are produced this year and sold next year. 
B)  method avoids double counting of goods going through several stages of production. 
C)  amount can be more easily determined in the marketplace. 
D)  method avoids understating the value of GDP produced during a given year.

Question 13

Define and distinguish between final goods and intermediate goods.

Accepted Answer

The answer of Define and distinguish between final goods and...

Question 14

In the definition of GDP, "market value" refers to

Accepted Answer

A)  valuing production in production units. 
B)  not counting intermediate products. 
C)  valuing production according to the market price. 
D)  when the production took place.

Question 15

Which of the following is included in "compensation of employees" part of the income approach to measuring GDP?
I. Wages and salaries.
II. Pension fund contributions.
III. Social Security contributions.

Accepted Answer

A)  I only 
B)  I and II 
C)  I and III 
D)  I, II and III

Question 16

Phases and turning points of the business cycle are expansion, peak, recession and trough.

Accepted Answer

A) True 
 B)False

Question 17

If consumption expenditures are $500 million, net investment is $100 million, depreciation equals $5 million, imports are $50 million, exports are $55 million, government expenditure on goods and services is $220 million, and government transfer payments are $20 million, then GDP is

Accepted Answer

A)  $790 million. 
B)  $800 million. 
C)  $830 million. 
D)  $850 million.

Question 18

It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1 trillion while Brazil's was $1.31 trillion. These data show that

Accepted Answer

A)  Brazil had a healthier economy than did Mexico. 
B)  Mexico's GDP per person was lower than was Brazil's GDP per person in 2007. 
C)  Mexico's GDP per person was $9,090 in 2007. 
D)  Brazil's GDP per person was $5,300 in 2007.

Question 19

-Use the information in the table above to calculate the value of net exports.

Accepted Answer

A)  $10 million 
B)  $0 
C)  -$10 million 
D)  $30 million

Question 20

The business cycle progresses from an expansion to a peak to a recession and then to a trough.

Accepted Answer