Question 1

Real income for people in the United States was between two and three times as much in 2015 as it was in

Accepted Answer

A)  1915. 
B)  1925. 
C)  1935. 
D)  1955. 
E)  1965. 
A)  1915. 
B)  1925. 
C)  1935. 
D)  1955. 
E)  1965.

Question 2

Identify three reasons why gross domestic product GDP) is not a perfect measure of a nation's well-being.

Accepted Answer

Four shortcomings limit the effectivenes

Question 3

A country's nominal gross domestic product GDP) has declined over the last year. Are the people in the country necessarily worse off, on average? Explain.

Accepted Answer

The people are not necessarily worse off

Question 4

Consider the following figure to answer the next  questions:
  
-During which year was average income climbing the most rapidly?

Accepted Answer

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

Question 5

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Accepted Answer

The three categories are business fixed

Question 6

Government salaries paid to soldiers in the military are included in the _______ category of gross domestic product GDP).

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  net export 
E)  durable goods 
A)  consumption 
B)  investment 
C)  government purchases 
D)  net export 
E)  durable goods

Question 7

How does the focus of macroeconomics differ from that of microeconomics when it comes to income, output, employment, and prices?

Accepted Answer

Where microeconomics focuses on the inco

Question 8

Consumption is approximately_______ of gross domestic product GDP).

Accepted Answer

A)  50 percent 
B)  90 percent 
C)  70 percent 
D)  80 percent 
E)  40 percent 
A)  50 percent 
B)  90 percent 
C)  70 percent 
D)  80 percent 
E)  40 percent

Question 9

A country with a small per capita gross domestic product GDP) is

Accepted Answer

A)  efficient. 
B)  poor. 
C)  economically healthy. 
D)  isolated. 
E)  too productive. 
A)  efficient. 
B)  poor. 
C)  economically healthy. 
D)  isolated. 
E)  too productive.

Question 10

"'One U.S. dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics, because we are talking about the cost in pesos of a single good, namely a dollar." Why is this reasoning INCORRECT?

Accepted Answer

A)  An exchange of dollars for pesos is, implicitly, an exchange across international borders. Any such exchange is by definition macroeconomic. 
B)  What makes the statement about dollars and pesos microeconomic is the fact that individual consumers can perform currency exchange transactions. 
C)  Mexico and the United States, together with Canada, form a single trade zone, within which exchange rates between currencies are not micro- or macro-) economically significant. 
D)  A dollar is not a "single good" in the required sense. It is a medium by which goods-all goods-are exchanged, and so changes in exchange rates between the dollar and other currencies affect the prices of all goods. 
E)  Microeconomics is about incomes, outputs, employment, and prices. Since an exchange rate does not fall under any of those topics, it is not part of microeconomics. 
A)  An exchange of dollars for pesos is, implicitly, an exchange across international borders. Any such exchange is by definition macroeconomic. 
B)  What makes the statement about dollars and pesos microeconomic is the fact that individual consumers can perform currency exchange transactions. 
C)  Mexico and the United States, together with Canada, form a single trade zone, within which exchange rates between currencies are not micro- or macro-) economically significant. 
D)  A dollar is not a "single good" in the required sense. It is a medium by which goods-all goods-are exchanged, and so changes in exchange rates between the dollar and other currencies affect the prices of all goods. 
E)  Microeconomics is about incomes, outputs, employment, and prices. Since an exchange rate does not fall under any of those topics, it is not part of microeconomics.

Question 11

Explain how the difference between nominal and real gross domestic product GDP) arises, and draw a graph to illustrate the difference between them.

Accepted Answer

Nominal GDP represents the total monetar

Question 12

Which country has had a recent surge in per capita gross domestic product GDP) after many years where it remained low?

Accepted Answer

A)  India 
B)  Nicaragua 
C)  Somalia 
D)  Poland 
E)  Turkey 
A)  India 
B)  Nicaragua 
C)  Somalia 
D)  Poland 
E)  Turkey

Question 13

To determine a value for gross domestic product GDP), you would add up the

Accepted Answer

A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced. 
A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced.

Question 14

The market price of a gallon of gasoline is a

Accepted Answer

A)  macroeconomic topic, because the market in gasoline is nationwide. 
B)  microeconomic topic, because it involves the price of a single good. 
C)  macroeconomic topic because of the large volume of gasoline bought and sold each day. 
D)  microeconomic topic, because the price of a gallon of gasoline is less than $10. 
E)  macroeconomic topic, because the price of gasoline has implications for the whole economy. 
A)  macroeconomic topic, because the market in gasoline is nationwide. 
B)  microeconomic topic, because it involves the price of a single good. 
C)  macroeconomic topic because of the large volume of gasoline bought and sold each day. 
D)  microeconomic topic, because the price of a gallon of gasoline is less than $10. 
E)  macroeconomic topic, because the price of gasoline has implications for the whole economy.

Question 15

You bought a popular video game last year for $75 and sold it to a store this year for $20. The store sells the used game to a consumer for $40. When you sell your game to the store, how is this included in gross domestic product GDP)?

Accepted Answer

A)  as consumption 
B)  as investment 
C)  as government purchases 
D)  as net exports 
E)  This does not count in GDP. 
A)  as consumption 
B)  as investment 
C)  as government purchases 
D)  as net exports 
E)  This does not count in GDP.

Question 16

For the next  questions, suppose a country has the following quarterly growth data for the last three years: $$\begin{array} { l l l l l } 
\hline \text { Year } & \text { Q1 } & \text { Q2 } &{ \mathrm { Q } 3 } & \mathrm { Q } 4 \
\hline 2010 & 3.1 \text { percent } & 3.2 \text { percent } & 2.2 \text { percent } & 1.2 \text { percent } \
2011 & 3.1 \text { percent } & - 4.1 \text { percent } & - 2.2 \text { percent } & 1.5 \text { percent } \
2012 & 1.3 \text { percent } & 1.2 \text { percent } & 3.2 \text { percent } & 3.3 \text { percent } \
\hline
\end{array}$$
-The country's long-run average growth rate is 3 percent. In how many of these quarters did gross domestic product GDP) contract?

Accepted Answer

A)  two 
B)  six 
C)  five 
D)  four 
E)  three 
A)  two 
B)  six 
C)  five 
D)  four 
E)  three

Question 17

Consider the following data to answer the next  questions: $$\begin{array} { l l c } 
\hline \text { Country } & \text { GDP } & \text { Population } \
\hline \text { A } & \$ 32,000 & 1,500 \
\text { B } & \$ 20,000 & 1,000 \
\text { C } & \$ 10,000 & 500 \
\text { D } & \$ 10,000 & 2,000 \
\text { E } & \$ 8,000 & 800 \
\hline
\end{array}$$
-Which country has the highest level of gross domestic product GDP) per capita?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 18

An example of an intermediate good would be

Accepted Answer

A)  lumber used by a consumer to build a fence in his or her yard. 
B)  pencils purchased by a restaurant to be used to take orders. 
C)  a new stove purchased by a consumer. 
D)  an airplane purchased by the government. 
E)  Social Security payments made by the government. 
A)  lumber used by a consumer to build a fence in his or her yard. 
B)  pencils purchased by a restaurant to be used to take orders. 
C)  a new stove purchased by a consumer. 
D)  an airplane purchased by the government. 
E)  Social Security payments made by the government.

Question 19

Nominal gross domestic product GDP) is equal to

Accepted Answer

A)  current prices)*base year output). 
B)  current prices) * current output). 
C)  base prices) * base year output). 
D)  base year prices) /current output). 
E)  current output) / base year prices). 
A)  current prices)*base year output). 
B)  current prices) * current output). 
C)  base prices) * base year output). 
D)  base year prices) /current output). 
E)  current output) / base year prices).

Question 20

The consumption category includes all purchases

Accepted Answer

A)  made by consumers. 
B)  of goods and services made by consumers. 
C)  of final goods and services made by consumers. 
D)  of final goods and services made by consumers except new houses. 
E)  of final goods and services made by consumers except new houses and new cars. 
A)  made by consumers. 
B)  of goods and services made by consumers. 
C)  of final goods and services made by consumers. 
D)  of final goods and services made by consumers except new houses. 
E)  of final goods and services made by consumers except new houses and new cars.

Real income for people in the United States was between two and three times as much in 2015 as it was in

Identify three reasons why gross domestic product GDP) is not a perfect measure of a nation's well-being.

A country's nominal gross domestic product GDP) has declined over the last year. Are the people in the country necessarily worse off, on average? Explain.

Consider the following figure to answer the next questions: -During which year was average income climbing the most rapidly?

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Government salaries paid to soldiers in the military are included in the _______ category of gross domestic product GDP).

How does the focus of macroeconomics differ from that of microeconomics when it comes to income, output, employment, and prices?

Consumption is approximately_______ of gross domestic product GDP).

A country with a small per capita gross domestic product GDP) is

"'One U.S. dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics, because we are talking about the cost in pesos of a single good, namely a dollar." Why is this reasoning INCORRECT?

Explain how the difference between nominal and real gross domestic product GDP) arises, and draw a graph to illustrate the difference between them.

Which country has had a recent surge in per capita gross domestic product GDP) after many years where it remained low?

To determine a value for gross domestic product GDP), you would add up the

The market price of a gallon of gasoline is a

You bought a popular video game last year for $75 and sold it to a store this year for $20. The store sells the used game to a consumer for $40. When you sell your game to the store, how is this included in gross domestic product GDP)?

Consider the following data to answer the next questions: Country GDP Population A \ 32,000 1,500 B \ 20,000 1,000 C \ 10,000 500 D \ 10,000 2,000 E \ 8,000 800 -Which country has the highest level of gross domestic product GDP) per capita?

An example of an intermediate good would be

Nominal gross domestic product GDP) is equal to

The consumption category includes all purchases

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

Real income for people in the United States was between two and three times as much in 2015 as it was in

Identify three reasons why gross domestic product GDP) is not a perfect measure of a nation's well-being.

A country's nominal gross domestic product GDP) has declined over the last year. Are the people in the country necessarily worse off, on average? Explain.

Consider the following figure to answer the next questions: -During which year was average income climbing the most rapidly?

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Government salaries paid to soldiers in the military are included in the _______ category of gross domestic product GDP).

How does the focus of macroeconomics differ from that of microeconomics when it comes to income, output, employment, and prices?

Consumption is approximately_______ of gross domestic product GDP).

A country with a small per capita gross domestic product GDP) is

"'One U.S. dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics, because we are talking about the cost in pesos of a single good, namely a dollar." Why is this reasoning INCORRECT?

Explain how the difference between nominal and real gross domestic product GDP) arises, and draw a graph to illustrate the difference between them.

Which country has had a recent surge in per capita gross domestic product GDP) after many years where it remained low?

To determine a value for gross domestic product GDP), you would add up the

The market price of a gallon of gasoline is a

You bought a popular video game last year for $75 and sold it to a store this year for $20. The store sells the used game to a consumer for $40. When you sell your game to the store, how is this included in gross domestic product GDP)?

Consider the following data to answer the next questions: Country GDP Population A \ 32,000 1,500 B \ 20,000 1,000 C \ 10,000 500 D \ 10,000 2,000 E \ 8,000 800 -Which country has the highest level of gross domestic product GDP) per capita?

An example of an intermediate good would be

Nominal gross domestic product GDP) is equal to

The consumption category includes all purchases

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