Question 1

Consider the following data to answer the following questions:  
-Which country has the lowest average living standard?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 2

The expansion 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 above 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 above the long-run trend of GDP.

Question 3

Describe three different uses of gross domestic product (GDP),or give three different reasons to explain why it might be useful to calculate GDP.

Accepted Answer

Using the GDP,we can calculate GDP per c

Question 4

Goods that firms repackage with other goods for sale at a later stage are

Accepted Answer

A)  inventory. 
B)  final goods. 
C)  intermediate goods. 
D)  used goods. 
E)  value-added goods. 
A)  inventory. 
B)  final goods. 
C)  intermediate goods. 
D)  used goods. 
E)  value-added goods.

Question 5

Consumption is approximately ________ of gross domestic product (GDP).

Accepted Answer

A)  50 percent 
B)  90 percent 
C)  70 percent 
D)  80 percent 
E)  40 percent 
A)  50 percent 
B)  90 percent 
C)  70 percent 
D)  80 percent 
E)  40 percent

Question 6

The gross domestic product (GDP)deflator is a measure of

Accepted Answer

A)  price level. 
B)  the growth rate of nominal GDP. 
C)  the growth rate of real GDP. 
D)  the growth rate of long-run trend GDP. 
E)  how much the economy contracts during a recession. 
A)  price level. 
B)  the growth rate of nominal GDP. 
C)  the growth rate of real GDP. 
D)  the growth rate of long-run trend GDP. 
E)  how much the economy contracts during a recession.

Question 7

Company X sells paper to company Y for $100,000.Company Y uses the paper to make textbooks,selling them to consumers for $500,000.The total contribution to gross domestic product (GDP)is

Accepted Answer

A)  $500,000. 
B)  $400,000. 
C)  $600,000. 
D)  $550,000. 
E)  $450,000. 
A)  $500,000. 
B)  $400,000. 
C)  $600,000. 
D)  $550,000. 
E)  $450,000.

Question 8

"'One U.S.dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics,because we are talking about the cost in pesos of a single good,namely a dollar." Why is this reasoning INCORRECT?

Accepted Answer

A)  An exchange of dollars for pesos is,implicitly,an exchange across international borders.Any such exchange is by definition macroeconomic. 
B)  What makes the statement about dollars and pesos microeconomic is the fact that individual consumers can perform currency exchange transactions. 
C)  Mexico and the United States,together with Canada,form a single trade zone,within which exchange rates between currencies are not micro- (or macro-)economically significant. 
D)  A dollar is not a "single good" in the required sense.It is a medium by which goods-all goods-are exchanged,and so changes in exchange rates between the dollar and other currencies affect the prices of all goods. 
E)  Microeconomics is about incomes,outputs,employment,and prices.Since an exchange rate does not fall under any of those topics,it is not part of microeconomics. 
A)  An exchange of dollars for pesos is,implicitly,an exchange across international borders.Any such exchange is by definition macroeconomic. 
B)  What makes the statement about dollars and pesos microeconomic is the fact that individual consumers can perform currency exchange transactions. 
C)  Mexico and the United States,together with Canada,form a single trade zone,within which exchange rates between currencies are not micro- (or macro-)economically significant. 
D)  A dollar is not a "single good" in the required sense.It is a medium by which goods-all goods-are exchanged,and so changes in exchange rates between the dollar and other currencies affect the prices of all goods. 
E)  Microeconomics is about incomes,outputs,employment,and prices.Since an exchange rate does not fall under any of those topics,it is not part of microeconomics.

Question 9

The difference between nominal gross domestic product (GDP)and real GDP is

Accepted Answer

A)  real output growth. 
B)  the price level. 
C)  nominal output growth. 
D)  long-run trend GDP. 
E)  average output growth. 
A)  real output growth. 
B)  the price level. 
C)  nominal output growth. 
D)  long-run trend GDP. 
E)  average output growth.

Question 10

Real gross domestic product (GDP)can be calculated as

Accepted Answer

A)  (nominal GDP)* (the GDP deflator)* 100. 
B)  (nominal GDP)/ (the GDP deflator)* 100. 
C)  (nominal GDP)- (the GDP deflator)* 100. 
D)  (the GDP deflator)/ (nominal GDP)*100. 
E)  (nominal GDP)* (the long-run trend growth rate of GDP)* 100. 
A)  (nominal GDP)* (the GDP deflator)* 100. 
B)  (nominal GDP)/ (the GDP deflator)* 100. 
C)  (nominal GDP)- (the GDP deflator)* 100. 
D)  (the GDP deflator)/ (nominal GDP)*100. 
E)  (nominal GDP)* (the long-run trend growth rate of GDP)* 100.

Question 11

To determine a value for gross domestic product (GDP),you would add up the

Accepted Answer

A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced. 
A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced.

Question 12

Use an equation to explain how the growth of nominal gross domestic product (GDP),the growth of real GDP,and the change in price level are related.Give an example.

Accepted Answer

The growth of nominal GDP is approximate

Question 13

Economists measure the total output of an economy in order to

Accepted Answer

A)  estimate the economy's consumption of resources. 
B)  measure the overall level of prices. 
C)  know how to adjust gross domestic product (GDP)for inflation. 
D)  prevent the appearance of business cycles. 
E)  gauge the economy's overall health. 
A)  estimate the economy's consumption of resources. 
B)  measure the overall level of prices. 
C)  know how to adjust gross domestic product (GDP)for inflation. 
D)  prevent the appearance of business cycles. 
E)  gauge the economy's overall health.

Question 14

Consider the following data to answer the following questions:  
-Although countries C and D have the same level of gross domestic product (GDP),country C has a level of per capita GDP that is ________ times that of country D.

Accepted Answer

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

Exam 19: Introduction to Macroeconomics and Gross Domestic Product

Consider the following data to answer the following questions: -Which country has the lowest average living standard?

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

Describe three different uses of gross domestic product (GDP),or give three different reasons to explain why it might be useful to calculate GDP.

Goods that firms repackage with other goods for sale at a later stage are

Consumption is approximately ________ of gross domestic product (GDP).

The gross domestic product (GDP)deflator is a measure of

Company X sells paper to company Y for $100,000.Company Y uses the paper to make textbooks,selling them to consumers for $500,000.The total contribution to gross domestic product (GDP)is

"'One U.S.dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics,because we are talking about the cost in pesos of a single good,namely a dollar." Why is this reasoning INCORRECT?

The difference between nominal gross domestic product (GDP)and real GDP is

Real gross domestic product (GDP)can be calculated as

To determine a value for gross domestic product (GDP),you would add up the

Use an equation to explain how the growth of nominal gross domestic product (GDP),the growth of real GDP,and the change in price level are related.Give an example.

Economists measure the total output of an economy in order to

Consider the following data to answer the following questions: -Although countries C and D have the same level of gross domestic product (GDP),country C has a level of per capita GDP that is ________ times that of country D.

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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