Question 1

Consumption expenditures in the U.S.usually account for approximately __________ percent of GDP.

Accepted Answer

A)  40 
B)  50 
C)  60 
D)  70 
E)  80 
A)  40 
B)  50 
C)  60 
D)  70 
E)  80

Question 2

Explain why GDP figures do not necessarily measure happiness or well-being.

Accepted Answer

Well-being and happiness are subjective.

Question 3

Countries with a large GDP must also have a large per-capita GDP.

Accepted Answer

A) True 
 B)False

Question 4

An example of income earned but not received is

Accepted Answer

A)  welfare payments. 
B)  Social Security payments. 
C)  undistributed profits. 
D)  a and b 
E)  a, b, and c 
A)  welfare payments. 
B)  Social Security payments. 
C)  undistributed profits. 
D)  a and b 
E)  a, b, and c

Question 5

If GDP in year 1 is the same dollar amount as the GDP in year 2,does it follow that Real GDP in year 1 is the same as Real GDP in year 2?

Accepted Answer

A)  Yes, since prices must necessarily be the same in the two years. 
B)  No, since equal GDP figures do not account for population. 
C)  No, since prices may not be the same in the two years. 
D)  Yes, since equal GDP figures do account for a change in the quality of goods produced in the two years. 
E)  none of the above 
A)  Yes, since prices must necessarily be the same in the two years. 
B)  No, since equal GDP figures do not account for population. 
C)  No, since prices may not be the same in the two years. 
D)  Yes, since equal GDP figures do account for a change in the quality of goods produced in the two years. 
E)  none of the above

Question 6

GDP can rise as a result of a rise in __________________,and Real GDP can rise as a result of a rise in _______________________.

Accepted Answer

A)  prices or output; prices only. 
B)  prices only; prices or output. 
C)  prices or output; output only. 
D)  prices or output; prices or output. 
A)  prices or output; prices only. 
B)  prices only; prices or output. 
C)  prices or output; output only. 
D)  prices or output; prices or output.

Question 7

If a person receives a (stock)dividend check,in the calculation of national income this is part of

Accepted Answer

A)  compensation of employees. 
B)  proprietors' income. 
C)  rental income. 
D)  net interest. 
E)  corporate profits. 
A)  compensation of employees. 
B)  proprietors' income. 
C)  rental income. 
D)  net interest. 
E)  corporate profits.

Question 8

Exhibit 7-5
  
-Refer to Exhibit 7-5. During year 3,Country Z experienced economic _____________ and _________________.

Accepted Answer

A)  decline; deflation (falling price level) 
B)  growth; inflation (rising price level) 
C)  growth; deflation (falling price level) 
D)  decline; inflation (rising price level) 
A)  decline; deflation (falling price level) 
B)  growth; inflation (rising price level) 
C)  growth; deflation (falling price level) 
D)  decline; inflation (rising price level)

Question 9

Suppose the total market value of all final goods and services produced this year in economy X is $4 million.Of the $4 million worth of goods,$3 million is sold and $1 million is held in inventory.For this year,the GDP for economy X is

Accepted Answer

A)  $4 million. 
B)  $3 million. 
C)  $1 million. 
D)  $7 million. 
E)  none of the above 
A)  $4 million. 
B)  $3 million. 
C)  $1 million. 
D)  $7 million. 
E)  none of the above

Question 10

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

Accepted Answer

A)  9.73 percent 
B)  2.67 percent 
C)  3.58 percent 
D)  2.74 percent 
A)  9.73 percent 
B)  2.67 percent 
C)  3.58 percent 
D)  2.74 percent

Question 11

The expenditure approach to measuring GDP sums

Accepted Answer

A)  consumption, investment, government purchases, and net exports. 
B)  sales, revenues, income, and wages. 
C)  profits, compensation of employees, consumption, and investment. 
D)  net exports, consumption, wages, and salaries. 
E)  consumption, interest, net exports, and federal government purchases 
A)  consumption, investment, government purchases, and net exports. 
B)  sales, revenues, income, and wages. 
C)  profits, compensation of employees, consumption, and investment. 
D)  net exports, consumption, wages, and salaries. 
E)  consumption, interest, net exports, and federal government purchases

Question 12

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

Accepted Answer

A)  It had no impact on GDP. 
B)  GDP increased by $300. 
C)  GDP increased by $20,000. 
D)  GDP increased by $19,700. 
E)  GDP increased by $20,300. 
A)  It had no impact on GDP. 
B)  GDP increased by $300. 
C)  GDP increased by $20,000. 
D)  GDP increased by $19,700. 
E)  GDP increased by $20,300.

Question 13

If a business firm in Country A produces a good but does not sell it in that same year,that good will not be counted in Country A's GDP.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is counted in GDP?

Accepted Answer

A)  the trading of 100 shares of Microsoft stock 
B)  the services of a real estate broker 
C)  government transfer payments 
D)  the sale of a used car 
E)  none of the above 
A)  the trading of 100 shares of Microsoft stock 
B)  the services of a real estate broker 
C)  government transfer payments 
D)  the sale of a used car 
E)  none of the above

Question 15

Disposable income equals national income minus personal taxes.

Accepted Answer

A) True 
 B)False

Question 16

Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion.In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion.Which of the following statements is true?

Accepted Answer

A)  Per-capita GDP is necessarily higher in year 2 than year 1. 
B)  People are "better off" in year 2 than in year 1 because there are more goods and services in year 2 than year 1. 
C)  Government transfer payments were higher in year 2 than in year 1. 
D)  a and b 
E)  none of the above 
A)  Per-capita GDP is necessarily higher in year 2 than year 1. 
B)  People are "better off" in year 2 than in year 1 because there are more goods and services in year 2 than year 1. 
C)  Government transfer payments were higher in year 2 than in year 1. 
D)  a and b 
E)  none of the above

Question 17

The typical U.S.business cycle,measured peak to peak,lasts approximately

Accepted Answer

A)  4 to 5 years. 
B)  8 to 10 years. 
C)  1 to 3 years. 
D)  6 months to 2 years. 
A)  4 to 5 years. 
B)  8 to 10 years. 
C)  1 to 3 years. 
D)  6 months to 2 years.

Question 18

Suppose that inventory investment is $20 billion and (total)investment is $680 billion. What does purchases of newly produced capital goods equal?

Accepted Answer

A)  $715 billion 
B)  $785 billion 
C)  $750 billion 
D)  $35 billion 
E)  There is not enough information to answer this question. 
A)  $715 billion 
B)  $785 billion 
C)  $750 billion 
D)  $35 billion 
E)  There is not enough information to answer this question.

Question 19

Personal income is

Accepted Answer

A)  equal to GDP. 
B)  that portion of national income that can be used for consumption and saving. 
C)  the sum of all payments to suppliers of the factors of production. 
D)  the amount of income that individuals actually receive. 
E)  another term for disposable income. 
A)  equal to GDP. 
B)  that portion of national income that can be used for consumption and saving. 
C)  the sum of all payments to suppliers of the factors of production. 
D)  the amount of income that individuals actually receive. 
E)  another term for disposable income.

Question 20

Exhibit 7-1
  
-Refer to Exhibit 7-1.What is the value of net domestic product?

Accepted Answer

A)  $5,840 
B)  $5,731 
C)  $5,650 
D)  $5,767 
E)  $6,637 
A)  $5,840 
B)  $5,731 
C)  $5,650 
D)  $5,767 
E)  $6,637

Exam 7: Macroeconomic Measurements: GDP and Real GDP

Consumption expenditures in the U.S.usually account for approximately __________ percent of GDP.

Explain why GDP figures do not necessarily measure happiness or well-being.

Countries with a large GDP must also have a large per-capita GDP.

An example of income earned but not received is

If GDP in year 1 is the same dollar amount as the GDP in year 2,does it follow that Real GDP in year 1 is the same as Real GDP in year 2?

GDP can rise as a result of a rise in __________________,and Real GDP can rise as a result of a rise in _______________________.

If a person receives a (stock)dividend check,in the calculation of national income this is part of

Exhibit 7-5 -Refer to Exhibit 7-5. During year 3,Country Z experienced economic _____________ and _________________.

Suppose the total market value of all final goods and services produced this year in economy X is $4 million.Of the $4 million worth of goods,$3 million is sold and $1 million is held in inventory.For this year,the GDP for economy X is

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

The expenditure approach to measuring GDP sums

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker.How did this impact GDP?

If a business firm in Country A produces a good but does not sell it in that same year,that good will not be counted in Country A's GDP.

Which of the following is counted in GDP?

Disposable income equals national income minus personal taxes.

Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion.In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion.Which of the following statements is true?

The typical U.S.business cycle,measured peak to peak,lasts approximately

Suppose that inventory investment is $20 billion and (total)investment is $680 billion. What does purchases of newly produced capital goods equal?

Personal income is

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of net domestic product?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

GDP can rise as a result of a rise in ,and Real GDP can rise as a result of a rise in _____.

Exhibit 7-5 -Refer to Exhibit 7-5. During year 3,Country Z experienced economic _ and _____.