Question 1

Economic growth is best measured by changes in

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  the inflation rate. 
D)  the unemployment rate. 
E)  the number of jobs. 
A)  nominal GDP. 
B)  real GDP. 
C)  the inflation rate. 
D)  the unemployment rate. 
E)  the number of jobs.

Question 2

Macroeconomics includes the study of

Accepted Answer

A)  individual markets. 
B)  the behavior of the firm. 
C)  the behavior of the consumer. 
D)  changes in national income. 
E)  changes in commodity prices. 
A)  individual markets. 
B)  the behavior of the firm. 
C)  the behavior of the consumer. 
D)  changes in national income. 
E)  changes in commodity prices.

Question 3

Which country has seen a decline in per capita gross domestic product (GDP)since the 1970s?

Accepted Answer

A)  India 
B)  Mexico 
C)  Nicaragua 
D)  Poland 
E)  Turkey 
A)  India 
B)  Mexico 
C)  Nicaragua 
D)  Poland 
E)  Turkey

Question 4

If nominal gross domestic product (GDP)is declining but production is rising,then it must be the case that

Accepted Answer

A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling. 
A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling.

Question 5

The contraction phase of a business cycle is best described as the time

Accepted Answer

A)  elapsed from a trough to a peak. 
B)  elapsed from a peak to a trough. 
C)  elapsed from a peak to a peak. 
D)  elapsed from a trough to a trough. 
E)  spent producing below the long-run trend of GDP. 
A)  elapsed from a trough to a peak. 
B)  elapsed from a peak to a trough. 
C)  elapsed from a peak to a peak. 
D)  elapsed from a trough to a trough. 
E)  spent producing below the long-run trend of GDP.

Question 6

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2012.  
-What was the nominal gross domestic product (GDP)in 2013?

Accepted Answer

A)  $5,400 
B)  $6,300 
C)  $6,450 
D)  $1,700 
E)  $13,600 
A)  $5,400 
B)  $6,300 
C)  $6,450 
D)  $1,700 
E)  $13,600

Question 7

Nominal gross domestic product (GDP)increased from $15.44 trillion to $15.75 trillion,and the price level increased from 116.5 to 122.3.Which of the following is true?

Accepted Answer

A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP. 
A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP.

Question 8

Which country has had a recent surge in per capita gross domestic product (GDP)after many years where it remained low?

Accepted Answer

A)  India 
B)  Nicaragua 
C)  Somalia 
D)  Poland 
E)  Turkey 
A)  India 
B)  Nicaragua 
C)  Somalia 
D)  Poland 
E)  Turkey

Question 9

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the following questions:  
-What is the value of nominal gross domestic product (GDP)in 2012? Round to the nearest second decimal.

Accepted Answer

A)  $480.60 million 
B)  $955.50 million 
C)  $1,146.60 million 
D)  $500.50 million 
E)  $720.72 million 
A)  $480.60 million 
B)  $955.50 million 
C)  $1,146.60 million 
D)  $500.50 million 
E)  $720.72 million

Question 10

A shortcoming of real gross domestic product (GDP)is it

Accepted Answer

A)  does not include the underground economy. 
B)  includes nonmarket goods. 
C)  does not measure changes in employment. 
D)  does not include the value obtained through purchases of stocks and bonds. 
E)  does not account for changes in the prices of goods and services. 
A)  does not include the underground economy. 
B)  includes nonmarket goods. 
C)  does not measure changes in employment. 
D)  does not include the value obtained through purchases of stocks and bonds. 
E)  does not account for changes in the prices of goods and services.

Question 11

Gross domestic product (GDP)is not a good measure of the

Accepted Answer

A)  total income earned by all people in the country. 
B)  average living standards of people in the country when adjusted for population. 
C)  output produced by people in the country. 
D)  income inequality that exists between people in the country. 
E)  overall health of the economy. 
A)  total income earned by all people in the country. 
B)  average living standards of people in the country when adjusted for population. 
C)  output produced by people in the country. 
D)  income inequality that exists between people in the country. 
E)  overall health of the economy.

Question 12

Joe has a full-time construction job and also does odd jobs for people on the weekends.You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence.Does the payment to Joe count toward the value of gross domestic product (GDP)?

Accepted Answer

A)  Yes,the fence increases the value of your house. 
B)  Yes,all income earned counts in GDP. 
C)  No,his is a nonmarket activity. 
D)  No,this income is not likely to be reported to the government. 
E)  No,this is a leisure activity. 
A)  Yes,the fence increases the value of your house. 
B)  Yes,all income earned counts in GDP. 
C)  No,his is a nonmarket activity. 
D)  No,this income is not likely to be reported to the government. 
E)  No,this is a leisure activity.

Question 13

Consider the following data that identifies real gross domestic product (GDP) in comparison to the long-run trend of real GDP to answer the following questions:  
-In what quarter did this economy enter a recession?

Accepted Answer

A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9 
A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9

Question 14

Explain why per capita gross domestic product (GDP)is a better measure of a nation's standard of living than national GDP.

Accepted Answer

Standard of living is about each individ

Question 15

Explain why real gross domestic product (GDP)is preferred to nominal GDP as a measure of economic growth.

Accepted Answer

Nominal GDP can increase as a result of

Question 16

Gross domestic product (GDP)is defined as the total of all final goods and services produced ________ during a fixed period of time.

Accepted Answer

A)  by a nation's public sector 
B)  by a nation's private sector 
C)  within a nation's borders 
D)  for export by a nation 
E)  for domestic consumption 
A)  by a nation's public sector 
B)  by a nation's private sector 
C)  within a nation's borders 
D)  for export by a nation 
E)  for domestic consumption

Question 17

Explain why a country with a lower level of real gross domestic product (GDP)per capita might have a higher level of well-being in comparison to a country with a higher level of real GDP per capita.

Accepted Answer

The country with the lower level of real

Question 18

Which of the following is a topic of macroeconomics?

Accepted Answer

A)  the income earned by a person 
B)  the profit earned by a firm 
C)  production in the computer industry 
D)  the price of ice cream 
E)  the number of unemployed people in the economy 
A)  the income earned by a person 
B)  the profit earned by a firm 
C)  production in the computer industry 
D)  the price of ice cream 
E)  the number of unemployed people in the economy

Question 19

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called

Accepted Answer

A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs. 
A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs.

Question 20

Gross domestic product (GDP)is most often measured by the

Accepted Answer

A)  year. 
B)  month. 
C)  week. 
D)  day. 
E)  quarter. 
A)  year. 
B)  month. 
C)  week. 
D)  day. 
E)  quarter.

Exam 19: Introduction to Macroeconomics and Gross Domestic Product

Economic growth is best measured by changes in

Macroeconomics includes the study of

Which country has seen a decline in per capita gross domestic product (GDP)since the 1970s?

If nominal gross domestic product (GDP)is declining but production is rising,then it must be the case that

The contraction phase of a business cycle is best described as the time

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2012. -What was the nominal gross domestic product (GDP)in 2013?

Nominal gross domestic product (GDP)increased from $15.44 trillion to $15.75 trillion,and the price level increased from 116.5 to 122.3.Which of the following is true?

Which country has had a recent surge in per capita gross domestic product (GDP)after many years where it remained low?

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the following questions: -What is the value of nominal gross domestic product (GDP)in 2012? Round to the nearest second decimal.

A shortcoming of real gross domestic product (GDP)is it

Gross domestic product (GDP)is not a good measure of the

Joe has a full-time construction job and also does odd jobs for people on the weekends.You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence.Does the payment to Joe count toward the value of gross domestic product (GDP)?

Consider the following data that identifies real gross domestic product (GDP) in comparison to the long-run trend of real GDP to answer the following questions: -In what quarter did this economy enter a recession?

Explain why per capita gross domestic product (GDP)is a better measure of a nation's standard of living than national GDP.

Explain why real gross domestic product (GDP)is preferred to nominal GDP as a measure of economic growth.

Gross domestic product (GDP)is defined as the total of all final goods and services produced ________ during a fixed period of time.

Explain why a country with a lower level of real gross domestic product (GDP)per capita might have a higher level of well-being in comparison to a country with a higher level of real GDP per capita.

Which of the following is a topic of macroeconomics?

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called

Gross domestic product (GDP)is most often measured by the

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Unemployment

The Price Level and Inflation

Savings,interest Rates,and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

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