Question 1

The MOST important use of GDP is as a measure of:

Accepted Answer

A)  the size of the economy. 
B)  the level of unemployment. 
C)  changes in the price level. 
D)  rates of return in financial markets. 
A)  the size of the economy. 
B)  the level of unemployment. 
C)  changes in the price level. 
D)  rates of return in financial markets.

Question 2

The scale MOST often used to compare economic performance in other years is:

Accepted Answer

A)  the circular-flow diagram. 
B)  real GDP. 
C)  the business cycle. 
D)  fiscal policy. 
A)  the circular-flow diagram. 
B)  real GDP. 
C)  the business cycle. 
D)  fiscal policy.

Question 3

Which transaction will be included in the official measurement of GDP?

Accepted Answer

A)  Stan sold his 2015 Honda to his sister. 
B)  Monica illegally downloaded movies to her laptop. 
C)  Ben bought a textbook from his friend who took the class last semester. . 
D)  Sean bought a new truck. 
A)  Stan sold his 2015 Honda to his sister. 
B)  Monica illegally downloaded movies to her laptop. 
C)  Ben bought a textbook from his friend who took the class last semester. . 
D)  Sean bought a new truck.

Question 4

In the circular-flow model, households:

Accepted Answer

A)  receive transfer payments from the government. 
B)  buy resources in the factor markets. 
C)  sell products in the market for goods and services. 
D)  issue stocks and bonds to raise capital. 
A)  receive transfer payments from the government. 
B)  buy resources in the factor markets. 
C)  sell products in the market for goods and services. 
D)  issue stocks and bonds to raise capital.

Question 5

Which factor causes an outflow of funds from a domestic economy?

Accepted Answer

A)  household savings 
B)  government tax collections 
C)  government transfer payments 
D)  imports 
A)  household savings 
B)  government tax collections 
C)  government transfer payments 
D)  imports

Question 6

Use the following to answer questions:  
-(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, real GDP in 2011 was:

Accepted Answer

A)  $47,000. 
B)  $69,000. 
C)  $72,000. 
D)  $114,000. 
A)  $47,000. 
B)  $69,000. 
C)  $72,000. 
D)  $114,000.

Question 7

If we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's:

Accepted Answer

A)  disposable income. 
B)  gross domestic product. 
C)  trade deficit. 
D)  budget deficit. 
A)  disposable income. 
B)  gross domestic product. 
C)  trade deficit. 
D)  budget deficit.

Question 8

Households do NOT receive income in the form of:

Accepted Answer

A)  wages. 
B)  dividends. 
C)  interest and rent. 
D)  investment spending. 
A)  wages. 
B)  dividends. 
C)  interest and rent. 
D)  investment spending.

Question 9

GDP is the total dollar value of all:

Accepted Answer

A)  intermediate goods and services produced in the economy in a given period. 
B)  wages paid to producing workers in a given period. 
C)  final goods and services produced in the economy in a given period. 
D)  government production in a given period. 
A)  intermediate goods and services produced in the economy in a given period. 
B)  wages paid to producing workers in a given period. 
C)  final goods and services produced in the economy in a given period. 
D)  government production in a given period.

Question 10

If real GDP rises while nominal GDP falls, then prices on average have:

Accepted Answer

A)  risen. 
B)  fallen. 
C)  stayed the same. 
D)  decreased and then been offset by an equal increase. 
A)  risen. 
B)  fallen. 
C)  stayed the same. 
D)  decreased and then been offset by an equal increase.

Question 11

Which equation is CORRECT?

Accepted Answer

A)  GDP = C + I + G + IM - X. 
B)  GDP = C + I + G + X - IM. 
C)  GDP = C + I + G + X + IM. 
D)  GDP = C + I + G - T + TR. 
A)  GDP = C + I + G + IM - X. 
B)  GDP = C + I + G + X - IM. 
C)  GDP = C + I + G + X + IM. 
D)  GDP = C + I + G - T + TR.

Question 12

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. How does the government finance its purchases of goods and services?

Accepted Answer

A)  by printing money 
B)  by taxes 
C)  by borrowing 
D)  by taxes and borrowing 
A)  by printing money 
B)  by taxes 
C)  by borrowing 
D)  by taxes and borrowing

Question 13

Chained dollars is:

Accepted Answer

A)  money that banks are required to keep in their vaults to back deposits. 
B)  the measure of the value of intermediate goods. 
C)  a method for calculating changes in real GDP using an early base year and a late base year. 
D)  a method used to convert real to nominal GDP. 
A)  money that banks are required to keep in their vaults to back deposits. 
B)  the measure of the value of intermediate goods. 
C)  a method for calculating changes in real GDP using an early base year and a late base year. 
D)  a method used to convert real to nominal GDP.

Question 14

Use the following to answer questions:  
-(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, nominal GDP in 2011 was:

Accepted Answer

A)  $47,000. 
B)  $69,000. 
C)  $72,000. 
D)  $114,000. 
A)  $47,000. 
B)  $69,000. 
C)  $72,000. 
D)  $114,000.

Question 15

Use the following to answer questions:  
-(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is the value of disposable income?

Accepted Answer

A)  $1,020 
B)  $1,000 
C)  $870 
D)  $850 
A)  $1,020 
B)  $1,000 
C)  $870 
D)  $850

Question 16

In the circular-flow diagram, a person or a group of people who share income is a:

Accepted Answer

A)  government. 
B)  factor. 
C)  household. 
D)  firm. 
A)  government. 
B)  factor. 
C)  household. 
D)  firm.

Question 17

Use the following to answer question 115:  
-(Table: Furniture Production Schedule) Use Table: Furniture Production Schedule. What is the total value added of all stages of production of the furniture?

Accepted Answer

A)  $800 
B)  $1,200 
C)  $1,800 
D)  $2,000 
A)  $800 
B)  $1,200 
C)  $1,800 
D)  $2,000

Question 18

Which item would NOT be included in this year's GDP?

Accepted Answer

A)  the production of a television show 
B)  the purchase of a new work truck 
C)  the hiring of a new police officer 
D)  your purchase of your neighbor's 2001 Toyota 
A)  the production of a television show 
B)  the purchase of a new work truck 
C)  the hiring of a new police officer 
D)  your purchase of your neighbor's 2001 Toyota

Question 19

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in government spending, holding everything else constant, which outcome is likely to occur?

Accepted Answer

A)  an increase in the nominal GDP 
B)  an increase in the real GDP 
C)  an increase in the unemployment rate 
D)  an increase in the inflation rate 
A)  an increase in the nominal GDP 
B)  an increase in the real GDP 
C)  an increase in the unemployment rate 
D)  an increase in the inflation rate

Question 20

Real GDP tends to understate our economic well-being because it:

Accepted Answer

A)  includes the value of services produced in the home. 
B)  excludes the value of leisure. 
C)  includes expenditures on crime prevention equipment. 
D)  includes health care costs related to the consumption of cigarettes. 
A)  includes the value of services produced in the home. 
B)  excludes the value of leisure. 
C)  includes expenditures on crime prevention equipment. 
D)  includes health care costs related to the consumption of cigarettes.

The MOST important use of GDP is as a measure of:

The scale MOST often used to compare economic performance in other years is:

Which transaction will be included in the official measurement of GDP?

In the circular-flow model, households:

Which factor causes an outflow of funds from a domestic economy?

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, real GDP in 2011 was:

If we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's:

Households do NOT receive income in the form of:

GDP is the total dollar value of all:

If real GDP rises while nominal GDP falls, then prices on average have:

Which equation is CORRECT?

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. How does the government finance its purchases of goods and services?

Chained dollars is:

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, nominal GDP in 2011 was:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is the value of disposable income?

In the circular-flow diagram, a person or a group of people who share income is a:

Use the following to answer question 115: -(Table: Furniture Production Schedule) Use Table: Furniture Production Schedule. What is the total value added of all stages of production of the furniture?

Which item would NOT be included in this year's GDP?

Real GDP tends to understate our economic well-being because it:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 7: GDP and the CPI: Tracking the Macroeconomy

The MOST important use of GDP is as a measure of:

The scale MOST often used to compare economic performance in other years is:

Which transaction will be included in the official measurement of GDP?

In the circular-flow model, households:

Which factor causes an outflow of funds from a domestic economy?

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, real GDP in 2011 was:

If we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's:

Households do NOT receive income in the form of:

GDP is the total dollar value of all:

If real GDP rises while nominal GDP falls, then prices on average have:

Which equation is CORRECT?

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. How does the government finance its purchases of goods and services?

Chained dollars is:

Use the following to answer questions: -(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2010 as the base year, nominal GDP in 2011 was:

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. What is the value of disposable income?

In the circular-flow diagram, a person or a group of people who share income is a:

Use the following to answer question 115: -(Table: Furniture Production Schedule) Use Table: Furniture Production Schedule. What is the total value added of all stages of production of the furniture?

Which item would NOT be included in this year's GDP?

Real GDP tends to understate our economic well-being because it:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters