Question 1

Microeconomics includes the study of

Accepted Answer

A)  the unemployment rate. 
B)  the overall level of prices in an economy. 
C)  changes in the price of commercial real estate. 
D)  expansions and contractions of the economy. 
E)  measures of the standard of living. 
A)  the unemployment rate. 
B)  the overall level of prices in an economy. 
C)  changes in the price of commercial real estate. 
D)  expansions and contractions of the economy. 
E)  measures of the standard of living.

Question 2

If over a period of time real gross domestic product (GDP)decreases while nominal GDP increases,then this implies

Accepted Answer

A)  a significant rise in the price level. 
B)  a significant drop in the price level. 
C)  that real GDP is much greater than nominal GDP. 
D)  that the given period occurs before the base period. 
E)  that the given period year occurs after the base period. 
A)  a significant rise in the price level. 
B)  a significant drop in the price level. 
C)  that real GDP is much greater than nominal GDP. 
D)  that the given period occurs before the base period. 
E)  that the given period year occurs after the base period.

Question 3

In macroeconomics

Accepted Answer

A)  output and income are very different concepts. 
B)  output and income are essentially identical. 
C)  output is less than income. 
D)  output is greater than income. 
E)  income is measured in dollars but output is not. 
A)  output and income are very different concepts. 
B)  output and income are essentially identical. 
C)  output is less than income. 
D)  output is greater than income. 
E)  income is measured in dollars but output is not.

Question 4

A shortcoming of nominal gross domestic product (GDP)is that

Accepted Answer

A)  an increase in nominal GDP can be caused by changes in either price or quantity. 
B)  it does not measure changes in employment. 
C)  it does not measure changes in price. 
D)  it does not include net exports. 
E)  it does not include the value obtained through purchases of stocks and bonds. 
A)  an increase in nominal GDP can be caused by changes in either price or quantity. 
B)  it does not measure changes in employment. 
C)  it does not measure changes in price. 
D)  it does not include net exports. 
E)  it does not include the value obtained through purchases of stocks and bonds.

Question 5

A shortcoming of using real gross domestic product (GDP)as a measure of economic well-being is that it does not measure changes in

Accepted Answer

A)  production. 
B)  environmental quality. 
C)  prices. 
D)  unemployment. 
E)  interest rates. 
A)  production. 
B)  environmental quality. 
C)  prices. 
D)  unemployment. 
E)  interest rates.

Question 6

A company sells 100 boxes of chocolate,yet it only produced 90 boxes of chocolate during the year.Which of the following is true?

Accepted Answer

A)  It is impossible to sell more than is produced. 
B)  Inventory investment must be negative. 
C)  The price of the chocolate must have gone up. 
D)  The firm must have acquired the extra 10 boxes from another company. 
E)  The firm sold the chocolate but must have given 10 people an IOU. 
A)  It is impossible to sell more than is produced. 
B)  Inventory investment must be negative. 
C)  The price of the chocolate must have gone up. 
D)  The firm must have acquired the extra 10 boxes from another company. 
E)  The firm sold the chocolate but must have given 10 people an IOU.

Question 7

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 the gross domestic product (GDP)deflator in 2011? Round to the nearest decimal.

Accepted Answer

A)  54.6 
B)  154.6 
C)  110.0 
D)  90.9 
E)  112.0 
A)  54.6 
B)  154.6 
C)  110.0 
D)  90.9 
E)  112.0

Question 8

The consumption component of gross domestic product (GDP)consists of both goods and services.The goods,in turn,can be broken down into durable and nondurable goods.Briefly explain what is included in each category,and why the distinction is significant.

Accepted Answer

Nondurable goods are consumed over a sho

Question 9

For the following questions, suppose a country has the following quarterly growth data for the last three years:  
-The country's long-run average growth rate is 3 percent.In how many of these quarters did gross domestic product (GDP)contract?

Accepted Answer

A)  two 
B)  six 
C)  five 
D)  four 
E)  three 
A)  two 
B)  six 
C)  five 
D)  four 
E)  three

Question 10

Consider the following data to answer the following questions:  
-If these are the only five countries in the world,then country B produces ________ of world gross domestic product (GDP).

Accepted Answer

A)  50 percent 
B)  25 percent 
C)  20 percent 
D)  62.5 percent 
E)  30 percent 
A)  50 percent 
B)  25 percent 
C)  20 percent 
D)  62.5 percent 
E)  30 percent

Question 11

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 real gross domestic product (GDP)in 2010? Round to the nearest second decimal.

Accepted Answer

A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million 
A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million

Question 12

Consider the following figure to answer the following questions:  
-During which period was the economy in an expansion?

Accepted Answer

A)  2005-2009 
B)  2000-2004 
C)  2009-2013 
D)  2004-2008 
E)  2000-2012 
A)  2005-2009 
B)  2000-2004 
C)  2009-2013 
D)  2004-2008 
E)  2000-2012

Question 13

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the following questions:  
-The market value of cell phones is

Accepted Answer

A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million. 
A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million.

Question 14

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:  
-Between quarter 2 and quarter 3,real gross domestic product (GDP)grew by what percentage?

Accepted Answer

A)  4 percent 
B)  3 percent 
C)  1 percent 
D)  2 percent 
E)  -2 percent 
A)  4 percent 
B)  3 percent 
C)  1 percent 
D)  2 percent 
E)  -2 percent

Question 15

Identify three reasons why gross domestic product (GDP)is not a perfect measure of a nation's well-being.

Accepted Answer

Four shortcomings limit the effectivenes

Question 16

The government purchases category of gross domestic product (GDP)includes spending by

Accepted Answer

A)  federal,state,and local governments. 
B)  federal and state governments. 
C)  state and local governments. 
D)  local government only. 
E)  the federal government only. 
A)  federal,state,and local governments. 
B)  federal and state governments. 
C)  state and local governments. 
D)  local government only. 
E)  the federal government only.

Question 17

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:  
-How many quarters did this economy spend in a recession?

Accepted Answer

A)  8 quarters 
B)  4 quarters 
C)  2 quarters 
D)  6 quarters 
E)  7 quarters 
A)  8 quarters 
B)  4 quarters 
C)  2 quarters 
D)  6 quarters 
E)  7 quarters

Question 18

Between two given years,if real gross domestic product (GDP)and nominal GDP grow at the same rate,then

Accepted Answer

A)  the price level increased. 
B)  prices must have remained constant between the two years. 
C)  quantities must have remained constant between the two years. 
D)  prices and quantities must have remained constant between the two years. 
E)  prices and quantities must have grown at the same rate between the two years. 
A)  the price level increased. 
B)  prices must have remained constant between the two years. 
C)  quantities must have remained constant between the two years. 
D)  prices and quantities must have remained constant between the two years. 
E)  prices and quantities must have grown at the same rate between the two years.

Question 19

Explain how the difference between nominal and real gross domestic product (GDP)arises,and draw a graph to illustrate the difference between them.

Accepted Answer

Nominal GDP represents the total monetar

Question 20

Gross domestic product (GDP)per capita is a good,but imperfect,measure of

Accepted Answer

A)  the percentage change in the overall level of prices. 
B)  income inequality. 
C)  changes in average living standards. 
D)  environmental quality. 
E)  the cost of living. 
A)  the percentage change in the overall level of prices. 
B)  income inequality. 
C)  changes in average living standards. 
D)  environmental quality. 
E)  the cost of living.

Exam 19: Introduction to Macroeconomics and Gross Domestic Product

Microeconomics includes the study of

If over a period of time real gross domestic product (GDP)decreases while nominal GDP increases,then this implies

In macroeconomics

A shortcoming of nominal gross domestic product (GDP)is that

A shortcoming of using real gross domestic product (GDP)as a measure of economic well-being is that it does not measure changes in

A company sells 100 boxes of chocolate,yet it only produced 90 boxes of chocolate during the year.Which of the following is true?

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 the gross domestic product (GDP)deflator in 2011? Round to the nearest decimal.

The consumption component of gross domestic product (GDP)consists of both goods and services.The goods,in turn,can be broken down into durable and nondurable goods.Briefly explain what is included in each category,and why the distinction is significant.

For the following questions, suppose a country has the following quarterly growth data for the last three years: -The country's long-run average growth rate is 3 percent.In how many of these quarters did gross domestic product (GDP)contract?

Consider the following data to answer the following questions: -If these are the only five countries in the world,then country B produces ________ of world gross domestic product (GDP).

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 real gross domestic product (GDP)in 2010? Round to the nearest second decimal.

Consider the following figure to answer the following questions: -During which period was the economy in an expansion?

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the following questions: -The market value of cell phones is

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: -Between quarter 2 and quarter 3,real gross domestic product (GDP)grew by what percentage?

Identify three reasons why gross domestic product (GDP)is not a perfect measure of a nation's well-being.

The government purchases category of gross domestic product (GDP)includes spending by

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: -How many quarters did this economy spend in a recession?

Between two given years,if real gross domestic product (GDP)and nominal GDP grow at the same rate,then

Explain how the difference between nominal and real gross domestic product (GDP)arises,and draw a graph to illustrate the difference between them.

Gross domestic product (GDP)per capita is a good,but imperfect,measure of

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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