Question 1

Which of the following items is NOT a category of personal consumption expenditures?

Accepted Answer

A)  durable goods 
B)  nondurable goods 
C)  residential housing 
D)  services 
A)  durable goods 
B)  nondurable goods 
C)  residential housing 
D)  services

Question 2

The main reason the national income and product accounts were created was to:

Accepted Answer

A)  provide businesses with data on the economy. 
B)  help governments manage the business cycle. 
C)  provide employment for statisticians during the Great Depression. 
D)  test out accounting theory developed during the early 20th century. 
A)  provide businesses with data on the economy. 
B)  help governments manage the business cycle. 
C)  provide employment for statisticians during the Great Depression. 
D)  test out accounting theory developed during the early 20th century.

Question 3

(Table) According to the table, the net domestic product for 2010 was: GDP Expenditures for 2010 $$\begin{array} { | l | c | } 
\hline \text { Expenditure } & \text { Billions } \
\hline \text { Personal consumption } & \$ 10,353.5 \
\hline \text { Gross private domestic investment } & 1,769.1 \
\hline \text { Exports } & 1,746.1 \
\hline \text { Imports } & 2,251.5 \
\hline \text { Government purchases } & 2,975.1 \
\hline \text { Capital consumption allowance } & 1,030.2 \
\hline
\end{array}$$

Accepted Answer

A)  $14,592.3 billion. 
B)  $738.9 billion. 
C)  $15,622.5 billion. 
D)  $13,562.1 billion. 
A)  $14,592.3 billion. 
B)  $738.9 billion. 
C)  $15,622.5 billion. 
D)  $13,562.1 billion.

Question 4

The proprietors' income component of the income approach to calculating GDP must be adjusted by an allowance to account for depreciating equipment.

Accepted Answer

A) True 
 B)False

Question 5

The largest component of GDP is:

Accepted Answer

A)  consumption expenditure. 
B)  gross private domestic investment. 
C)  government spending. 
D)  net exports. 
A)  consumption expenditure. 
B)  gross private domestic investment. 
C)  government spending. 
D)  net exports.

Question 6

A criticism of the National Bureau of Economic Research's business cycle dating committee is that it:

Accepted Answer

A)  makes premature judgments as to the turning points of the business cycle. 
B)  makes little use of the national income and product accounts. 
C)  dates peaks and troughs only after they occur. 
D)  does not update or revise data. 
A)  makes premature judgments as to the turning points of the business cycle. 
B)  makes little use of the national income and product accounts. 
C)  dates peaks and troughs only after they occur. 
D)  does not update or revise data.

Question 7

The national income and product accounts provide:

Accepted Answer

A)  the ability to track business cycles. 
B)  the ability to account for nonmarket activities, such as car maintenance. 
C)  a comprehensive measure of domestic unemployment. 
D)  a comprehensive measure of domestic inflation. 
A)  the ability to track business cycles. 
B)  the ability to account for nonmarket activities, such as car maintenance. 
C)  a comprehensive measure of domestic unemployment. 
D)  a comprehensive measure of domestic inflation.

Question 8

Which of the following statements about environmental quality and economic activity is true?

Accepted Answer

A)  Wealthier countries tend to value environmental quality more than developing countries. 
B)  As countries develop, they spend less on resources to improve environmental quality. 
C)  No measure of economic progress incorporates environmental quality. 
D)  Developing countries generally prefer to keep their environments pristine, even at the cost of such necessities as food and health care. 
A)  Wealthier countries tend to value environmental quality more than developing countries. 
B)  As countries develop, they spend less on resources to improve environmental quality. 
C)  No measure of economic progress incorporates environmental quality. 
D)  Developing countries generally prefer to keep their environments pristine, even at the cost of such necessities as food and health care.

Question 9

The national income and product accounts do all of the following EXCEPT:

Accepted Answer

A)  let economists judge our nation's economic performance. 
B)  compare U.S. income and output to that of other nations. 
C)  track the economy's condition over the course of the business cycle. 
D)  track changes in income distribution. 
A)  let economists judge our nation's economic performance. 
B)  compare U.S. income and output to that of other nations. 
C)  track the economy's condition over the course of the business cycle. 
D)  track changes in income distribution.

Question 10

An economic recovery that produces too few jobs to significantly reduce the unemployment rate is known as a(n):

Accepted Answer

A)  unemployment trap. 
B)  recession. 
C)  jobless recovery. 
D)  microeconomic problem. 
A)  unemployment trap. 
B)  recession. 
C)  jobless recovery. 
D)  microeconomic problem.

Question 11

The primary purpose of the circular flow model is to show how government policies affect businesses and households.

Accepted Answer

A) True 
 B)False

Question 12

Child care provided by a nanny is not included in the GDP if the parents pay the nanny "under the table."

Accepted Answer

A) True 
 B)False

Question 13

A microprocessor purchased by Dell is an example of a final good.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true within the circular flow of economic activity?

Accepted Answer

A)  Households are buyers of products and sellers of production factors. 
B)  Business firms are buyers and sellers of production factors. 
C)  Households are sellers of products and buyers of production factors. 
D)  Business firms are buyers of products and sellers of production factors. 
A)  Households are buyers of products and sellers of production factors. 
B)  Business firms are buyers and sellers of production factors. 
C)  Households are sellers of products and buyers of production factors. 
D)  Business firms are buyers of products and sellers of production factors.

Question 15

Holding other expenditures constant, if imports fall by $20 billion and exports fall by $10 billion, then GDP:

Accepted Answer

A)  rises by $10 billion. 
B)  falls by $10 billion. 
C)  falls by $30 billion. 
D)  rises by $30 billion. 
A)  rises by $10 billion. 
B)  falls by $10 billion. 
C)  falls by $30 billion. 
D)  rises by $30 billion.

Question 16

In 2014, we could accurately say that the Leading Economic Index has successfully predicted the past seven recessions.

Accepted Answer

A) True 
 B)False

Question 17

It is possible for the unemployment rate at the beginning of a recession to be lower than the unemployment rate at the beginning of a recovery.

Accepted Answer

A) True 
 B)False

Question 18

Which organization determines the beginning and end dates of a recession?

Accepted Answer

A)  the Council of Economic Advisers 
B)  the National Bureau of Economic Research 
C)  the U.S. Treasury Department 
D)  the Federal Reserve Board of Governors 
A)  the Council of Economic Advisers 
B)  the National Bureau of Economic Research 
C)  the U.S. Treasury Department 
D)  the Federal Reserve Board of Governors

Question 19

How do trends in bond interest rates help predict changes in the business cycle?

Accepted Answer

A)  When long-term rates are higher than short-term rates, a recession is likely. 
B)  When long-term rates are lower than short-term rates, a recession is likely. 
C)  When long-term rates are higher than short-term rates, a trough is present. 
D)  When long-term rates are lower than short-term rates, an expansion is likely. 
A)  When long-term rates are higher than short-term rates, a recession is likely. 
B)  When long-term rates are lower than short-term rates, a recession is likely. 
C)  When long-term rates are higher than short-term rates, a trough is present. 
D)  When long-term rates are lower than short-term rates, an expansion is likely.

Question 20

The income approach to calculating GDP includes compensation of employees plus:

Accepted Answer

A)  corporate profits and rental income. 
B)  national income and government expenditures. 
C)  net interest and net exports. 
D)  rental income and net exports. 
A)  corporate profits and rental income. 
B)  national income and government expenditures. 
C)  net interest and net exports. 
D)  rental income and net exports.

Which of the following items is NOT a category of personal consumption expenditures?

The main reason the national income and product accounts were created was to:

(Table) According to the table, the net domestic product for 2010 was: GDP Expenditures for 2010 Expenditure Billions Personal consumption \ 10,353.5 Gross private domestic investment 1,769.1 Exports 1,746.1 Imports 2,251.5 Government purchases 2,975.1 Capital consumption allowance 1,030.2

The proprietors' income component of the income approach to calculating GDP must be adjusted by an allowance to account for depreciating equipment.

The largest component of GDP is:

A criticism of the National Bureau of Economic Research's business cycle dating committee is that it:

The national income and product accounts provide:

Which of the following statements about environmental quality and economic activity is true?

The national income and product accounts do all of the following EXCEPT:

An economic recovery that produces too few jobs to significantly reduce the unemployment rate is known as a(n):

The primary purpose of the circular flow model is to show how government policies affect businesses and households.

Child care provided by a nanny is not included in the GDP if the parents pay the nanny "under the table."

A microprocessor purchased by Dell is an example of a final good.

Which of the following is true within the circular flow of economic activity?

Holding other expenditures constant, if imports fall by $20 billion and exports fall by $10 billion, then GDP:

In 2014, we could accurately say that the Leading Economic Index has successfully predicted the past seven recessions.

It is possible for the unemployment rate at the beginning of a recession to be lower than the unemployment rate at the beginning of a recovery.

Which organization determines the beginning and end dates of a recession?

How do trends in bond interest rates help predict changes in the business cycle?

The income approach to calculating GDP includes compensation of employees plus:

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

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Exam 5: Introduction to Macroeconomics

Which of the following items is NOT a category of personal consumption expenditures?

The main reason the national income and product accounts were created was to:

(Table) According to the table, the net domestic product for 2010 was: GDP Expenditures for 2010 Expenditure Billions Personal consumption \ 10,353.5 Gross private domestic investment 1,769.1 Exports 1,746.1 Imports 2,251.5 Government purchases 2,975.1 Capital consumption allowance 1,030.2

The proprietors' income component of the income approach to calculating GDP must be adjusted by an allowance to account for depreciating equipment.

The largest component of GDP is:

A criticism of the National Bureau of Economic Research's business cycle dating committee is that it:

The national income and product accounts provide:

Which of the following statements about environmental quality and economic activity is true?

The national income and product accounts do all of the following EXCEPT:

An economic recovery that produces too few jobs to significantly reduce the unemployment rate is known as a(n):

The primary purpose of the circular flow model is to show how government policies affect businesses and households.

Child care provided by a nanny is not included in the GDP if the parents pay the nanny "under the table."

A microprocessor purchased by Dell is an example of a final good.

Which of the following is true within the circular flow of economic activity?

Holding other expenditures constant, if imports fall by $20 billion and exports fall by $10 billion, then GDP:

In 2014, we could accurately say that the Leading Economic Index has successfully predicted the past seven recessions.

It is possible for the unemployment rate at the beginning of a recession to be lower than the unemployment rate at the beginning of a recovery.

Which organization determines the beginning and end dates of a recession?

How do trends in bond interest rates help predict changes in the business cycle?

The income approach to calculating GDP includes compensation of employees plus:

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

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