Question 1

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

Accepted Answer

The recovery phase is the period when Re

Question 2

Net exports equals

Accepted Answer

A)  exports divided by imports. 
B)  the sum of exports and imports. 
C)  exports minus imports. 
D)  exports during the year. 
E)  none of the above 
A)  exports divided by imports. 
B)  the sum of exports and imports. 
C)  exports minus imports. 
D)  exports during the year. 
E)  none of the above

Question 3

Which of the following statements is true?

Accepted Answer

A)  National income accountants consider the portion of corporate profits that is used to pay corporate profits taxes to be income earned by households but not received. 
B)  Net domestic product (NDP) is a smaller dollar amount than GDP. 
C)  Personal income includes transfer payments. 
D)  b and c 
E)  a, b, and c 
A)  National income accountants consider the portion of corporate profits that is used to pay corporate profits taxes to be income earned by households but not received. 
B)  Net domestic product (NDP) is a smaller dollar amount than GDP. 
C)  Personal income includes transfer payments. 
D)  b and c 
E)  a, b, and c

Question 4

Germany has a ____________________ GDP than Austria and has a _____________________ GDP per capita than Austria.

Accepted Answer

A)  larger; smaller 
B)  larger; larger 
C)  smaller; larger 
D)  smaller; smaller 
A)  larger; smaller 
B)  larger; larger 
C)  smaller; larger 
D)  smaller; smaller

Question 5

Look at the following data: personal income = $4,900 billion; personal taxes = $900 billion; transfer payments = $980 billion.What is disposable income?

Accepted Answer

A)  $3,200 billion 
B)  $4,000 billion 
C)  $4,980 billion 
D)  $1,880 billion 
E)  There is not enough information to answer the question. 
A)  $3,200 billion 
B)  $4,000 billion 
C)  $4,980 billion 
D)  $1,880 billion 
E)  There is not enough information to answer the question.

Question 6

Investment is equal to all purchases of newly produced capital goods

Accepted Answer

A)  minus changes in business inventories. 
B)  plus fixed investment minus inventory investment. 
C)  plus changes in business inventories. 
D)  plus changes in business inventories plus purchases of new residential housing. 
A)  minus changes in business inventories. 
B)  plus fixed investment minus inventory investment. 
C)  plus changes in business inventories. 
D)  plus changes in business inventories plus purchases of new residential housing.

Question 7

Which of the following statements is true?

Accepted Answer

A)  Indirect business taxes are a component of national income because when added to the other components of national income, the sum must equal GDP. 
B)  Indirect business taxes must be subtracted from national income to yield a figure equal to GDP. 
C)  Indirect business taxes are a part of national income because they are considered a payment to a factor of production. 
D)  Indirect business taxes are not part of national income because they are not considered a payment to a factor of production. 
A)  Indirect business taxes are a component of national income because when added to the other components of national income, the sum must equal GDP. 
B)  Indirect business taxes must be subtracted from national income to yield a figure equal to GDP. 
C)  Indirect business taxes are a part of national income because they are considered a payment to a factor of production. 
D)  Indirect business taxes are not part of national income because they are not considered a payment to a factor of production.

Question 8

Exhibit 7-3
  
-Refer to Exhibit 7-3. GDP is equal to

Accepted Answer

A)  $13,050. 
B)  $11,550. 
C)  $8,600. 
D)  $11,450. 
E)  $14,000. 
A)  $13,050. 
B)  $11,550. 
C)  $8,600. 
D)  $11,450. 
E)  $14,000.

Question 9

The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

Accepted Answer

A)  expenditure; income 
B)  expenditure; national product 
C)  national product; income 
D)  real gross domestic product; nominal gross domestic product 
E)  net national product; personal income 
A)  expenditure; income 
B)  expenditure; national product 
C)  national product; income 
D)  real gross domestic product; nominal gross domestic product 
E)  net national product; personal income

Question 10

Investment equals inventory investment added to

Accepted Answer

A)  business purchases of new capital goods. 
B)  purchases of new residential housing. 
C)  fixed investment. 
D)  business purchases of new capital goods and purchases of new residential housing. 
E)  either c or d 
A)  business purchases of new capital goods. 
B)  purchases of new residential housing. 
C)  fixed investment. 
D)  business purchases of new capital goods and purchases of new residential housing. 
E)  either c or d

Question 11

What is the proper sequence of the phases of a business cycle?

Accepted Answer

A)  peak, contraction, trough, expansion, recovery 
B)  peak, contraction, recovery, trough, expansion 
C)  peak, contraction, trough, recovery, expansion 
D)  contraction, peak, trough, recovery, expansion 
E)  recovery, trough, peak, expansion, contraction 
A)  peak, contraction, trough, expansion, recovery 
B)  peak, contraction, recovery, trough, expansion 
C)  peak, contraction, trough, recovery, expansion 
D)  contraction, peak, trough, recovery, expansion 
E)  recovery, trough, peak, expansion, contraction

Question 12

Net domestic product is the total value of

Accepted Answer

A)  all final goods and services produced within a country's borders in a year. 
B)  only intermediate goods produced within a country's borders in a year. 
C)  all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D)  only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E)  all final goods and services produced within a country's borders in a year minus capital consumption allowance. 
A)  all final goods and services produced within a country's borders in a year. 
B)  only intermediate goods produced within a country's borders in a year. 
C)  all final goods and services produced within a country's borders in a year minus gross private domestic investment. 
D)  only intermediate goods produced within a country's borders in a year plus gross private domestic investment. 
E)  all final goods and services produced within a country's borders in a year minus capital consumption allowance.

Question 13

Exhibit 7-4
  
-Refer to Exhibit 7-4. Did Country A experience a recession (based on the standard definition)in 2012?

Accepted Answer

A)  Yes, because Real GDP declined during two consecutive quarters in 2012 
B)  No, because Real GDP did not decline during three consecutive quarters in 2012. 
C)  Yes, because Real GDP was lower at the end of the year than it was at the beginning of the year. 
D)  This information cannot be determined because the determination of a recession is based upon GDP not Real GDP. 
A)  Yes, because Real GDP declined during two consecutive quarters in 2012 
B)  No, because Real GDP did not decline during three consecutive quarters in 2012. 
C)  Yes, because Real GDP was lower at the end of the year than it was at the beginning of the year. 
D)  This information cannot be determined because the determination of a recession is based upon GDP not Real GDP.

Question 14

Which of the following does GDP omit?

Accepted Answer

A)  Jack purchases $2,300 worth of stock in company X. 
B)  Bob mows his lawn and washes and irons his shirts. 
C)  Helen receives $4,000 a year in Social Security payments. 
D)  a and b 
E)  a, b, and c 
A)  Jack purchases $2,300 worth of stock in company X. 
B)  Bob mows his lawn and washes and irons his shirts. 
C)  Helen receives $4,000 a year in Social Security payments. 
D)  a and b 
E)  a, b, and c

Question 15

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

Accepted Answer

A)  $6,062 
B)  $5,731 
C)  $3,072 
D)  $6,382 
E)  $2,637 
A)  $6,062 
B)  $5,731 
C)  $3,072 
D)  $6,382 
E)  $2,637

Question 16

The base year is the year

Accepted Answer

A)  in which prices are unstable. 
B)  in which prices are lowest. 
C)  in which prices are highest. 
D)  that serves as a reference point or benchmark. 
E)  in which nominal output is largest. 
A)  in which prices are unstable. 
B)  in which prices are lowest. 
C)  in which prices are highest. 
D)  that serves as a reference point or benchmark. 
E)  in which nominal output is largest.

Question 17

Real GDP is always measured in

Accepted Answer

A)  cheaper dollars. 
B)  quality of goods produced. 
C)  base-year dollars. 
D)  nominal dollars. 
E)  current dollars. 
A)  cheaper dollars. 
B)  quality of goods produced. 
C)  base-year dollars. 
D)  nominal dollars. 
E)  current dollars.

Question 18

Exhibit 7-3
  
-Refer to Exhibit 7-3. Net exports is equal to

Accepted Answer

A)  $200. 
B)  -$200. 
C)  $600. 
D)  -$1,400. 
E)  $1,400 
A)  $200. 
B)  -$200. 
C)  $600. 
D)  -$1,400. 
E)  $1,400

Exam 7: Macroeconomic Measurements: GDP and Real GDP

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

Net exports equals

Which of the following statements is true?

Germany has a ____________________ GDP than Austria and has a _____________________ GDP per capita than Austria.

Look at the following data: personal income = $4,900 billion; personal taxes = $900 billion; transfer payments = $980 billion.What is disposable income?

Investment is equal to all purchases of newly produced capital goods

Which of the following statements is true?

Exhibit 7-3 -Refer to Exhibit 7-3. GDP is equal to

The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

Investment equals inventory investment added to

What is the proper sequence of the phases of a business cycle?

Net domestic product is the total value of

Exhibit 7-4 -Refer to Exhibit 7-4. Did Country A experience a recession (based on the standard definition)in 2012?

Which of the following does GDP omit?

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

The base year is the year

Real GDP is always measured in

Exhibit 7-3 -Refer to Exhibit 7-3. Net exports is equal to

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

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Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

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Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

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Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

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Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

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Agriculture: Problems, Policies, and Unintended Effects

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Germany has a GDP than Austria and has a _ GDP per capita than Austria.

The two ways of measuring Gross Domestic Product are the approach and the approach.