Question 1

Gross domestic product GDP) is best defined as the total market value of all

Accepted Answer

A)  goods and services produced within a country within a given time. 
B)  final goods and services produced within a country within a given time. 
C)  services produced within a country within a given time. 
D)  goods produced within a country within a given time. 
E)  final goods produced within a country within a given time. 
A)  goods and services produced within a country within a given time. 
B)  final goods and services produced within a country within a given time. 
C)  services produced within a country within a given time. 
D)  goods produced within a country within a given time. 
E)  final goods produced within a country within a given time.

Question 2

A student had the following expenditures last month: rent-$500, food expense-$200, cost of a used textbook from the bookstore-$50, cost of new shoes-$100, and cost of gas for the car-$100. Which of these items are included in gross domestic product GDP)?

Accepted Answer

The rent is included because the landlor

Question 3

Explain how economic growth is related to change in gross domestic product GDP).

Accepted Answer

Economic growth is measured as the perce

Question 4

The percent change in the overall level of prices in the economy is called

Accepted Answer

A)  the inflation rate. 
B)  the growth rate of GDP. 
C)  GDP. 
D)  GDP per capita. 
E)  the interest rate. 
A)  the inflation rate. 
B)  the growth rate of GDP. 
C)  GDP. 
D)  GDP per capita. 
E)  the interest rate.

Question 5

An index of the average prices of all goods and services throughout the economy is called

Accepted Answer

A)  the inflation rate. 
B)  the GDP deflator. 
C)  the interest rate. 
D)  the consumer price index. 
E)  nominal GDP. 
A)  the inflation rate. 
B)  the GDP deflator. 
C)  the interest rate. 
D)  the consumer price index. 
E)  nominal GDP.

Question 6

The gross domestic product GDP) deflator is a measure of

Accepted Answer

A)  price level. 
B)  the growth rate of nominal GDP. 
C)  the growth rate of real GDP. 
D)  the growth rate of long-run trend GDP. 
E)  how much the economy contracts during a recession. 
A)  price level. 
B)  the growth rate of nominal GDP. 
C)  the growth rate of real GDP. 
D)  the growth rate of long-run trend GDP. 
E)  how much the economy contracts during a recession.

Question 7

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 gross domestic product GDP) deflator in 2016?

Accepted Answer

A)  108.3 
B)  103 
C)  120 
D)  130 
E)  110 
A)  108.3 
B)  103 
C)  120 
D)  130 
E)  110

Question 8

Consider the following data that identifies real gross domestic product GDP) in comparison to the long-run trend of real GDP to answer the next questions: $$\begin{array} { l l l } 
\hline \text { Quarter } & \begin{array} { l } 
\text { Real GDP } \
\text { (billions of dollars) }
\end{array} & \begin{array} { l } 
\text { Long-Run Trend of Real } \
\text { GDP (billions of dollars) }
\end{array} \
\hline 1 & 4,000 & 4,000 \
2 & 4,160 & 4,120 \
3 & 4,326 & 4,244 \
4 & 4,413 & 4,371 \
5 & 4,501 & 4,502 \
6 & 4,591 & 4,637 \
7 & 4,499 & 4,776 \
8 & 4,409 & 4,919 \
9 & 4,673 & 5,067 \
10 & 4,954 & 5,219 \
11 & 5,252 & 5,376 \
12 & 5,376 & 5,537 \
\hline
\end{array}$$
-Between quarter 2 and quarter 3, real gross domestic product GDP) grew by what percentage?

Accepted Answer

A)  4 percent 
B)  3 percent 
C)  1 percent 
D)  2 percent 
E)  -2 percent 
A)  4 percent 
B)  3 percent 
C)  1 percent 
D)  2 percent 
E)  -2 percent

Question 9

The country of Aqua has an economy that is based entirely on lobsters. When it produces and sells lobsters in a given day, income earned will .

Accepted Answer

A)  more; stay the same 
B)  more; increase 
C)  more; decrease 
D)  fewer; stay the same 
E)  fewer; increase 
A)  more; stay the same 
B)  more; increase 
C)  more; decrease 
D)  fewer; stay the same 
E)  fewer; increase

Question 10

Describe three different uses of gross domestic product GDP), or give three different reasons to explain why it might be useful to calculate GDP.

Accepted Answer

Using the GDP, we can calculate GDP per

Question 11

Explain the significance of the equation GDP + C + I + G + NX.

Accepted Answer

The equation describes how to calculate

Question 12

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

Accepted Answer

A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling. 
A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling.

Question 13

If real gross domestic product GDP) equals nominal GDP, then

Accepted Answer

A)  output did not grow. 
B)  there was no inflation. 
C)  the current year is the base year. 
D)  the growth in output was equal to the growth in the price level. 
E)  the growth in output was greater than the growth in the price level. 
A)  output did not grow. 
B)  there was no inflation. 
C)  the current year is the base year. 
D)  the growth in output was equal to the growth in the price level. 
E)  the growth in output was greater than the growth in the price level.

Question 14

Macroeconomics includes the study of

Accepted Answer

A)  individual markets. 
B)  the behavior of the firm. 
C)  the behavior of the consumer. 
D)  changes in national income. 
E)  changes in commodity prices. 
A)  individual markets. 
B)  the behavior of the firm. 
C)  the behavior of the consumer. 
D)  changes in national income. 
E)  changes in commodity prices.

Question 15

If real gross domestic product GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was

Accepted Answer

A)  1 percent. 
B)  -1 percent. 
C)  7 percent. 
D)  12 percent. 
E)  0 percent. 
A)  1 percent. 
B)  -1 percent. 
C)  7 percent. 
D)  12 percent. 
E)  0 percent.

Question 16

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

Accepted Answer

Nondurable goods are consumed over a sho

Question 17

Does the value of cleaning your house count toward the value of gross domestic product GDP)?

Accepted Answer

A)  Yes, this value counts in GDP. 
B)  No, cleaning your house is not a market activity. 
C)  Yes, this counts if you pay a person or company to clean your house. 
D)  No, people who clean houses for a living do not pay taxes. 
E)  No, this is a leisure activity. 
A)  Yes, this value counts in GDP. 
B)  No, cleaning your house is not a market activity. 
C)  Yes, this counts if you pay a person or company to clean your house. 
D)  No, people who clean houses for a living do not pay taxes. 
E)  No, this is a leisure activity.

Question 18

If real gross domestic product GDP) grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by

Accepted Answer

A)  2 percent. 
B)  4 percent. 
C)  0 percent. 
D)  1 percent. 
E)  3 percent. 
A)  2 percent. 
B)  4 percent. 
C)  0 percent. 
D)  1 percent. 
E)  3 percent.

Question 19

Consider the following figure to answer the next  questions:
  
-During which period was the economy in a contraction?

Accepted Answer

A)  2001-2005 
B)  2008-2009 
C)  2004-2008 
D)  2005-2008 
E)  2000-2004 
A)  2001-2005 
B)  2008-2009 
C)  2004-2008 
D)  2005-2008 
E)  2000-2004

Question 20

The four major expenditure categories of gross domestic product GDP) are

Accepted Answer

A)  consumption, imports, exports, and government purchases. 
B)  consumption, government purchases, taxes, and investment. 
C)  consumption, investment, government purchases, and net exports. 
D)  consumption, investment, government purchases, and stocks. 
E)  consumption, investment, taxes, and net exports. 
A)  consumption, imports, exports, and government purchases. 
B)  consumption, government purchases, taxes, and investment. 
C)  consumption, investment, government purchases, and net exports. 
D)  consumption, investment, government purchases, and stocks. 
E)  consumption, investment, taxes, and net exports.

Gross domestic product GDP) is best defined as the total market value of all

A student had the following expenditures last month: rent-$500, food expense-$200, cost of a used textbook from the bookstore-$50, cost of new shoes-$100, and cost of gas for the car-$100. Which of these items are included in gross domestic product GDP)?

Explain how economic growth is related to change in gross domestic product GDP).

The percent change in the overall level of prices in the economy is called

An index of the average prices of all goods and services throughout the economy is called

The gross domestic product GDP) deflator is a measure of

The country of Aqua has an economy that is based entirely on lobsters. When it produces and sells lobsters in a given day, income earned will .

Describe three different uses of gross domestic product GDP), or give three different reasons to explain why it might be useful to calculate GDP.

Explain the significance of the equation GDP + C + I + G + NX.

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

If real gross domestic product GDP) equals nominal GDP, then

Macroeconomics includes the study of

If real gross domestic product GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

Does the value of cleaning your house count toward the value of gross domestic product GDP)?

If real gross domestic product GDP) grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by

Consider the following figure to answer the next questions: -During which period was the economy in a contraction?

The four major expenditure categories of gross domestic product GDP) are

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

Gross domestic product GDP) is best defined as the total market value of all

A student had the following expenditures last month: rent-$500, food expense-$200, cost of a used textbook from the bookstore-$50, cost of new shoes-$100, and cost of gas for the car-$100. Which of these items are included in gross domestic product GDP)?

Explain how economic growth is related to change in gross domestic product GDP).

The percent change in the overall level of prices in the economy is called

An index of the average prices of all goods and services throughout the economy is called

The gross domestic product GDP) deflator is a measure of

The country of Aqua has an economy that is based entirely on lobsters. When it produces and sells lobsters in a given day, income earned will .

Describe three different uses of gross domestic product GDP), or give three different reasons to explain why it might be useful to calculate GDP.

Explain the significance of the equation GDP + C + I + G + NX.

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

If real gross domestic product GDP) equals nominal GDP, then

Macroeconomics includes the study of

If real gross domestic product GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

Does the value of cleaning your house count toward the value of gross domestic product GDP)?

If real gross domestic product GDP) grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by

Consider the following figure to answer the next questions: -During which period was the economy in a contraction?

The four major expenditure categories of gross domestic product GDP) are

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