Question 1

The best measure of the average living standards of people in the country is the

Accepted Answer

A)  dollar value of final goods and services produced. 
B)  dollar value of final goods and services produced per person. 
C)  amount of final goods and services produced. 
D)  amount of final goods and services produced per person. 
E)  average price of final goods and services produced. 
A)  dollar value of final goods and services produced. 
B)  dollar value of final goods and services produced per person. 
C)  amount of final goods and services produced. 
D)  amount of final goods and services produced per person. 
E)  average price of final goods and services produced.

Question 2

When an unemployed worker receives a payment from the government as a result of being unemployed, it is

Accepted Answer

A)  included in the consumption category of GDP. 
B)  included in the investment category of GDP. 
C)  included in the government purchases category of GDP. 
D)  included in the net export category of GDP. 
E)  not included in any of the expenditure categories. 
A)  included in the consumption category of GDP. 
B)  included in the investment category of GDP. 
C)  included in the government purchases category of GDP. 
D)  included in the net export category of GDP. 
E)  not included in any of the expenditure categories.

Question 3

You bought stock in 2010 for $100 and you sold it in 2012 for $200. You used a broker to sell the stock for you, and he charged you $20. This transaction contributed_______ to gross domestic product GDP).

Accepted Answer

A)  $200 
B)  $20 
C)  $220 
D)  $100 
E)  $120 
A)  $200 
B)  $20 
C)  $220 
D)  $100 
E)  $120

Question 4

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: $$\begin{array} { l c l } 
\hline & \text { Quantity produced } & \text { Price } \
\hline \text { Cell phones } & 5 \text { million } & \$ 100 / \text { cell phone } \
\text { Pizza } & 25 \text { million } & \$ 10 / \text { pizza } \
\hline
\end{array}$$
-The market value of cell phones is

Accepted Answer

A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million. 
A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million.

Question 5

The gross domestic product GDP) deflator is a measure of the price level that includes prices of

Accepted Answer

A)  consumer goods and services only. 
B)  producer goods and services only. 
C)  final and intermediate goods and services. 
D)  final goods and services. 
E)  final services only. 
A)  consumer goods and services only. 
B)  producer goods and services only. 
C)  final and intermediate goods and services. 
D)  final goods and services. 
E)  final services only.

Question 6

Nominal gross domestic product GDP) increased from $15.76 trillion to $16.39 trillion, and the price level increased from 112.6 to 114.8. Which of the following is true?

Accepted Answer

A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP. 
A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP.

Question 7

When George buys a new computer for his business, it is included in gross domestic product GDP) as_______ , and when he buys a new computer for use at home, it counts as _______.

Accepted Answer

A)  investment; investment 
B)  consumption; consumption 
C)  consumption; investment 
D)  investment; consumption 
E)  investment; services 
A)  investment; investment 
B)  consumption; consumption 
C)  consumption; investment 
D)  investment; consumption 
E)  investment; services

Question 8

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions. Assume that the base year is 2012. $$\begin{array} { l l l l l } 
\hline \text { Good } & \text { 2012 Price } & \text { 2012 Quantity } & \text { 2013 Price } & \text { 2013 Quantity } \
\hline A & \$ 2.00 & 500 & \$ 2.50 & 600 \
\text { B } & \$ 4.00 & 1,000 & \$ 5.00 & 900 \
\text { C } & \$ 2.00 & 200 & \$ 1.00 & 300 \
\hline
\end{array}$$
-What was the growth rate of real gross domestic product GDP) between the two years?

Accepted Answer

A)  1.67 percent 
B)  0 percent 
C)  3.2 percent 
D)  2.4 percent 
E)  4.4 percent 
A)  1.67 percent 
B)  0 percent 
C)  3.2 percent 
D)  2.4 percent 
E)  4.4 percent

Question 9

Assuming these are the only two goods produced in the economy, what is the value of the gross domestic product GDP)?

Accepted Answer

A)  $110 million 
B)  $750 million 
C)  $2 million 
D)  $250 million 
E)  $500 million 
A)  $110 million 
B)  $750 million 
C)  $2 million 
D)  $250 million 
E)  $500 million

Question 10

Real gross domestic product GDP) can be calculated as

Accepted Answer

A)  nominal GDP) * the GDP deflator) * 100. 
B)  nominal GDP) / the GDP deflator) * 100. 
C)  nominal GDP) - the GDP deflator) *100. 
D)  the GDP deflator) / nominal GDP) * 100. 
E)  nominal GDP) *the long-run trend growth rate of GDP) * 100. 
A)  nominal GDP) * the GDP deflator) * 100. 
B)  nominal GDP) / the GDP deflator) * 100. 
C)  nominal GDP) - the GDP deflator) *100. 
D)  the GDP deflator) / nominal GDP) * 100. 
E)  nominal GDP) *the long-run trend growth rate of GDP) * 100.

Question 11

A shortcoming of real gross domestic product GDP) is it

Accepted Answer

A)  does not include the underground economy. 
B)  includes nonmarket goods. 
C)  does not measure changes in employment. 
D)  does not include the value obtained through purchases of stocks and bonds. 
E)  does not account for changes in the prices of goods and services. 
A)  does not include the underground economy. 
B)  includes nonmarket goods. 
C)  does not measure changes in employment. 
D)  does not include the value obtained through purchases of stocks and bonds. 
E)  does not account for changes in the prices of goods and services.

Question 12

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the questions: $$\begin{array} { l l c l } 
\hline \text { Year } & \text { Nominal GDP } & \text { Real GDP } & \text { GDP Deflator } \
\hline 2009 &\underline{\quad\quad} & \$ 500 & 100 \
2010 & \$ 551.2 & \underline{\quad\quad}& 106 \
2011 & \$ 600.6 & \$ 546 &\underline{\quad\quad} \
2012 & & \$ 600.6 & 120 \ 
\hline
\end{array}$$
-What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

Accepted Answer

A)  3.8 percent 
B)  4.0 percent 
C)  3.6 percent 
D)  2.0 percent 
E)  2.2 percent 
A)  3.8 percent 
B)  4.0 percent 
C)  3.6 percent 
D)  2.0 percent 
E)  2.2 percent

Question 13

The table shows a series of market transactions in the life of an automobile. Describe two different ways that these transactions could contribute to gross domestic product GDP) for the years 2017 and 2018. Which way is used in practice? $$\begin{array} { l l l } 
\hline \text { Transaction } & \text { Time frame } & \text { Cost } \
\hline \text { Parts sold to car maker } & \text { Fall 2017 } & \$ 13,000 \text { in parts } \
\text { Factor labor leads to assembled car } & \text { Winter } 2017 & \$ 11,000 \text { in labor } \
\text { Dealer buys car } & \text { Spring 2018 } & \$ 28,000 \text { for the car } \
\text { Dealer sells car to customer } & \text { Summer } 2018 & \$ 33,000 \text { for the car } \
\hline
\end{array}$$

Accepted Answer

One way to calculate the contributions t

Question 14

Bob wins the lottery. This _______ included in_______ category of gross domestic product GDP).

Accepted Answer

A)  is; the consumption 
B)  is; the investment 
C)  is; the government purchases 
D)  is; the net export 
E)  is not; any 
A)  is; the consumption 
B)  is; the investment 
C)  is; the government purchases 
D)  is; the net export 
E)  is not; any

Question 15

Explain why intermediate goods and used goods do not count in gross domestic product GDP).

Accepted Answer

Used goods do not count because they wer

Question 16

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5 percent sales commission. This transaction will increase gross domestic product GDP) by

Accepted Answer

A)  $0. 
B)  $50,000. 
C)  $15,000. 
D)  $65,000. 
E)  $300,000. 
A)  $0. 
B)  $50,000. 
C)  $15,000. 
D)  $65,000. 
E)  $300,000.

Question 17

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next  questions. Assume that the base year is 2015. $$\begin{array} { l l l l l } 
\hline \text { Good } & \text { 2015 Price } & \text { 2015 Quantity } & \text { 2016 Price } & \text { 2016 Quantity } \
\hline \text { A } & \$ 2 & 250 & \$ 3 & 200 \
\text { B } & \$ 3 & 300 & \$ 2 & 400 \
\text { C } & \$ 4 & 400 & \$ 5 & 500 \
\hline
\end{array}$$
-What was the growth rate of real gross domestic product GDP) between the two years?

Accepted Answer

A)  30 percent 
B)  3 percent 
C)  2 percent 
D)  20 percent 
E)  8.3 percent 
A)  30 percent 
B)  3 percent 
C)  2 percent 
D)  20 percent 
E)  8.3 percent

Question 18

Farmer John produces oranges. He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000. Tropicali uses the oranges to make orange juice, which it sells to consumers for $25,000. The impact of these transactions on gross domestic product GDP) is

Accepted Answer

A)  $20,000. 
B)  $45,000. 
C)  $60,000. 
D)  $30,000. 
E)  $25,000. 
A)  $20,000. 
B)  $45,000. 
C)  $60,000. 
D)  $30,000. 
E)  $25,000.

Question 19

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the questions: $$\begin{array} { l l c l } 
\hline \text { Year } & \text { Nominal GDP } & \text { Real GDP } & \text { GDP Deflator } \
\hline 2009 &\underline{\quad\quad} & \$ 500 & 100 \
2010 & \$ 551.2 & \underline{\quad\quad}& 106 \
2011 & \$ 600.6 & \$ 546 &\underline{\quad\quad} \
2012 & & \$ 600.6 & 120 \ 
\hline
\end{array}$$
-What is the value of real gross domestic product (GDP) in 2010? Round to the nearest second decimal.

Accepted Answer

A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million 
A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million

Question 20

The difference between microeconomics and macroeconomics is a matter of

Accepted Answer

A)  scale. 
B)  time. 
C)  demographics. 
D)  politics. 
E)  cost. 
A)  scale. 
B)  time. 
C)  demographics. 
D)  politics. 
E)  cost.

The best measure of the average living standards of people in the country is the

When an unemployed worker receives a payment from the government as a result of being unemployed, it is

You bought stock in 2010 for $100 and you sold it in 2012 for $200. You used a broker to sell the stock for you, and he charged you $20. This transaction contributed_______ to gross domestic product GDP).

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: Quantity produced Price Cell phones 5 million \ 100/ cell phone Pizza 25 million \ 10/ pizza -The market value of cell phones is

The gross domestic product GDP) deflator is a measure of the price level that includes prices of

Nominal gross domestic product GDP) increased from $15.76 trillion to $16.39 trillion, and the price level increased from 112.6 to 114.8. Which of the following is true?

When George buys a new computer for his business, it is included in gross domestic product GDP) as_ , and when he buys a new computer for use at home, it counts as _.

Assuming these are the only two goods produced in the economy, what is the value of the gross domestic product GDP)?

Real gross domestic product GDP) can be calculated as

A shortcoming of real gross domestic product GDP) is it

Bob wins the lottery. This _ included in_ category of gross domestic product GDP).

Explain why intermediate goods and used goods do not count in gross domestic product GDP).

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5 percent sales commission. This transaction will increase gross domestic product GDP) by

The difference between microeconomics and macroeconomics is a matter of

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters

Exam 6: Introduction to Macroeconomics and Gross Domestic Product

The best measure of the average living standards of people in the country is the

When an unemployed worker receives a payment from the government as a result of being unemployed, it is

You bought stock in 2010 for $100 and you sold it in 2012 for $200. You used a broker to sell the stock for you, and he charged you $20. This transaction contributed_______ to gross domestic product GDP).

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: Quantity produced Price Cell phones 5 million \ 100/ cell phone Pizza 25 million \ 10/ pizza -The market value of cell phones is

The gross domestic product GDP) deflator is a measure of the price level that includes prices of

Nominal gross domestic product GDP) increased from $15.76 trillion to $16.39 trillion, and the price level increased from 112.6 to 114.8. Which of the following is true?

When George buys a new computer for his business, it is included in gross domestic product GDP) as_______ , and when he buys a new computer for use at home, it counts as _______.

Assuming these are the only two goods produced in the economy, what is the value of the gross domestic product GDP)?

Real gross domestic product GDP) can be calculated as

A shortcoming of real gross domestic product GDP) is it

Bob wins the lottery. This _______ included in_______ category of gross domestic product GDP).

Explain why intermediate goods and used goods do not count in gross domestic product GDP).

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5 percent sales commission. This transaction will increase gross domestic product GDP) by

The difference between microeconomics and macroeconomics is a matter of

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters

When George buys a new computer for his business, it is included in gross domestic product GDP) as_ , and when he buys a new computer for use at home, it counts as _.

Bob wins the lottery. This _ included in_ category of gross domestic product GDP).