Question 1

The most volatile component of GDP over the business cycle is

Accepted Answer

A) consumption. 
B) net exports. 
C) investment. 
D) government purchases. 
A) consumption. 
B) net exports. 
C) investment. 
D) government purchases. C

Question 2

In the event of deflation,or negative inflation,then

Accepted Answer

A) real GDP is always lower than nominal GDP 
B) real GDP is always lower than nominal GDP after the base year. 
C) real GDP is always lower than nominal GDP. 
D) real GDP is always higher than nominal GDP before the base year. 
E) None of the above 
A) real GDP is always lower than nominal GDP 
B) real GDP is always lower than nominal GDP after the base year. 
C) real GDP is always lower than nominal GDP. 
D) real GDP is always higher than nominal GDP before the base year. 
E) None of the above E

Question 3

Profits earned in the United States by a foreign-owned firm would be included in

Accepted Answer

A) gross domestic product and gross national product. 
B) gross national product but not in gross domestic product. 
C) gross domestic product but not in gross national product. 
D) neither gross domestic product nor gross national product. 
A) gross domestic product and gross national product. 
B) gross national product but not in gross domestic product. 
C) gross domestic product but not in gross national product. 
D) neither gross domestic product nor gross national product. C

Question 4

Government purchases of goods and services

Accepted Answer

A) consist of current output of goods and services purchased by the federal government only. 
B) includes the current output of goods and services bought by the federal,state,and local governments. 
C) are the largest component of gross national product. 
D) include both defense spending and spending on social security. 
A) consist of current output of goods and services purchased by the federal government only. 
B) includes the current output of goods and services bought by the federal,state,and local governments. 
C) are the largest component of gross national product. 
D) include both defense spending and spending on social security.

Question 5

Which of the following indices best signals future movements in retail prices?

Accepted Answer

A) The implicit GDP deflator 
B) nominal GDP 
C) The consumer price index 
D) The producer price index 
E) The measure of economic welfare (MEW) 
A) The implicit GDP deflator 
B) nominal GDP 
C) The consumer price index 
D) The producer price index 
E) The measure of economic welfare (MEW)

Question 6

In the national income accounts,investment includes all of the following EXCEPT:

Accepted Answer

A) stock market purchases. 
B) inventories. 
C) purchases of equipment. 
D) new home sales. 
A) stock market purchases. 
B) inventories. 
C) purchases of equipment. 
D) new home sales.

Question 7

In the United States,an official dating of business cycles

Accepted Answer

A) is executed by the Federal Reserve Bank of New York. 
B) originates with the Department of Commerce. 
C) was started by the Bureau of Labor Statistics Institute. 
D) is performed by the Business Cycle Dating Group of the National Bureau of Economic Research. 
A) is executed by the Federal Reserve Bank of New York. 
B) originates with the Department of Commerce. 
C) was started by the Bureau of Labor Statistics Institute. 
D) is performed by the Business Cycle Dating Group of the National Bureau of Economic Research.

Question 8

The CPI overestimates inflation because

Accepted Answer

A) it often ignores the invention of new goods. 
B) it always includes discount stores. 
C) it allows substitution from more expensive goods to cheaper goods. 
D) all of the above. 
A) it often ignores the invention of new goods. 
B) it always includes discount stores. 
C) it allows substitution from more expensive goods to cheaper goods. 
D) all of the above.

Question 9

Assume that gross national product amounts to $4300.5 billion,depreciation is $550.1 billion,and indirect taxes are $399.3 billion.Then,net national product amounts to

Accepted Answer

A) $3351.1 billion. 
B) $4549.8 billion. 
C) $3851.2 billion. 
D) $3750.4 billion. 
A) $3351.1 billion. 
B) $4549.8 billion. 
C) $3851.2 billion. 
D) $3750.4 billion.

Question 10

If the value of a price index was 125 for 2005 and 75 for 1982,and GDP was 2500 in 2005 compared to 600 in 1982,the value of real 2005 GDP in terms of 1982 prices is

Accepted Answer

A) 1500. 
B) 1000. 
C) 2500. 
D) 360. 
A) 1500. 
B) 1000. 
C) 2500. 
D) 360.

Question 11

The primary emphasis in U.S.national income accounts is on

Accepted Answer

A) gross national product. 
B) gross domestic product. 
C) net national product. 
D) personal disposable income. 
A) gross national product. 
B) gross domestic product. 
C) net national product. 
D) personal disposable income.

Question 12

Real gross national product is

Accepted Answer

A) the same as national income if there were no depreciation and taxes. 
B) always less than national income. 
C) always greater than real gross domestic product. 
D) always less than nominal gross national product. 
A) the same as national income if there were no depreciation and taxes. 
B) always less than national income. 
C) always greater than real gross domestic product. 
D) always less than nominal gross national product.

Question 13

Suppose that a firm spends $200,000 to build a factory in 2012 that is expected to have a life of 10 years.As a result,GDP in 2012 will increase by:

Accepted Answer

A) $20,000 
B) $200,000 
C) You need to know the selling price of the factory to answer this question. 
D) It depends upon the tax law regarding depreciation. 
A) $20,000 
B) $200,000 
C) You need to know the selling price of the factory to answer this question. 
D) It depends upon the tax law regarding depreciation.

Question 14

The most commonly used measure of changes in the cost of living for households

Accepted Answer

A) real GDP. 
B) the CPI. 
C) nominal GDP. 
D) the GDP deflator. 
A) real GDP. 
B) the CPI. 
C) nominal GDP. 
D) the GDP deflator.

Question 15

Personal saving

Accepted Answer

A) equals national income less personal consumption expenditures. 
B) is personal disposable income minus consumption expenditures. 
C) is the value of stocks and bonds. 
D) equals personal income minus taxes. 
E) is personal disposable income less personal taxes. 
A) equals national income less personal consumption expenditures. 
B) is personal disposable income minus consumption expenditures. 
C) is the value of stocks and bonds. 
D) equals personal income minus taxes. 
E) is personal disposable income less personal taxes.

Question 16

Which of the following helps economists avoid double counting in computing of GDP?

Accepted Answer

A) Including goods and services produced only within a given area. 
B) Only include transfer payments made by the government and not individuals. 
C) Only include capital purchases by corporations and not by family-owned firms. 
D) Avoiding the use of intermediate goods in calculating GDP. 
A) Including goods and services produced only within a given area. 
B) Only include transfer payments made by the government and not individuals. 
C) Only include capital purchases by corporations and not by family-owned firms. 
D) Avoiding the use of intermediate goods in calculating GDP.

Question 17

Which of the following statements is (are)correct?

Accepted Answer

A) Both recessions and expansions can now be dated with great accuracy 
B) The dating of recessions and expansions is very subjective. 
C) The dating of recessions and expansions is complicated by determining potential output. 
D) Both b and c 
A) Both recessions and expansions can now be dated with great accuracy 
B) The dating of recessions and expansions is very subjective. 
C) The dating of recessions and expansions is complicated by determining potential output. 
D) Both b and c

Question 18

The period between a business cycle peak and the subsequent trough is called

Accepted Answer

A) a recession. 
B) a complete cycle. 
C) an expansion. 
D) a change in economic trend. 
A) a recession. 
B) a complete cycle. 
C) an expansion. 
D) a change in economic trend.

Question 19

The broadest measure of the aggregate price level is the

Accepted Answer

A) GDP deflator. 
B) consumer price index. 
C) producer price index. 
D) gross domestic product. 
A) GDP deflator. 
B) consumer price index. 
C) producer price index. 
D) gross domestic product.

Question 20

In the U.S.,government expenditure accounts for

Accepted Answer

A) 10% of GDP 
B) 20% of GDP 
C) 40% of GDP 
D) government expenditure is not included in GDP 
A) 10% of GDP 
B) 20% of GDP 
C) 40% of GDP 
D) government expenditure is not included in GDP

The most volatile component of GDP over the business cycle is

In the event of deflation,or negative inflation,then

Profits earned in the United States by a foreign-owned firm would be included in

Government purchases of goods and services

Which of the following indices best signals future movements in retail prices?

In the national income accounts,investment includes all of the following EXCEPT:

In the United States,an official dating of business cycles

The CPI overestimates inflation because

Assume that gross national product amounts to $4300.5 billion,depreciation is $550.1 billion,and indirect taxes are $399.3 billion.Then,net national product amounts to

If the value of a price index was 125 for 2005 and 75 for 1982,and GDP was 2500 in 2005 compared to 600 in 1982,the value of real 2005 GDP in terms of 1982 prices is

The primary emphasis in U.S.national income accounts is on

Real gross national product is

Suppose that a firm spends $200,000 to build a factory in 2012 that is expected to have a life of 10 years.As a result,GDP in 2012 will increase by:

The most commonly used measure of changes in the cost of living for households

Personal saving

Which of the following helps economists avoid double counting in computing of GDP?

Which of the following statements is (are)correct?

The period between a business cycle peak and the subsequent trough is called

The broadest measure of the aggregate price level is the

In the U.S.,government expenditure accounts for

Introduction

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Macroeconomic Models:a Summary

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters

Exam 2: Measurement of Macroeconomic Variables

The most volatile component of GDP over the business cycle is

In the event of deflation,or negative inflation,then

Profits earned in the United States by a foreign-owned firm would be included in

Government purchases of goods and services

Which of the following indices best signals future movements in retail prices?

In the national income accounts,investment includes all of the following EXCEPT:

In the United States,an official dating of business cycles

The CPI overestimates inflation because

Assume that gross national product amounts to $4300.5 billion,depreciation is $550.1 billion,and indirect taxes are $399.3 billion.Then,net national product amounts to

If the value of a price index was 125 for 2005 and 75 for 1982,and GDP was 2500 in 2005 compared to 600 in 1982,the value of real 2005 GDP in terms of 1982 prices is

The primary emphasis in U.S.national income accounts is on

Real gross national product is

Suppose that a firm spends $200,000 to build a factory in 2012 that is expected to have a life of 10 years.As a result,GDP in 2012 will increase by:

The most commonly used measure of changes in the cost of living for households

Personal saving

Which of the following helps economists avoid double counting in computing of GDP?

Which of the following statements is (are)correct?

The period between a business cycle peak and the subsequent trough is called

The broadest measure of the aggregate price level is the

In the U.S.,government expenditure accounts for

Introduction

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Macroeconomic Models:a Summary

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters