Question 1

Lois sells ten sweaters she had knitted to a retail store.The gross domestic product (GDP)of her country _____.

Accepted Answer

A) will increase 
B) will decrease 
C) will remain unaffected 
D) will increase only if the sweaters are as good as the sweaters sold by other retailers 
E) will increase if the price of each sweater is less than the cost of inputs required 
A) will increase 
B) will decrease 
C) will remain unaffected 
D) will increase only if the sweaters are as good as the sweaters sold by other retailers 
E) will increase if the price of each sweater is less than the cost of inputs required A

Question 2

One of the limitations of the national income accounting system is:

Accepted Answer

A) valuing all output at its market price regardless of its contribution to society's economic welfare. 
B) placing a market value on all negative externalities. 
C) accurately measuring the value of leisure time. 
D) double counting food produced on a farm for family consumption. 
E) ignoring government production of goods and services. 
A) valuing all output at its market price regardless of its contribution to society's economic welfare. 
B) placing a market value on all negative externalities. 
C) accurately measuring the value of leisure time. 
D) double counting food produced on a farm for family consumption. 
E) ignoring government production of goods and services. A

Question 3

The consumer price index (CPI)_____ inflation because it includes an item in the market basket only after the product becomes _____.

Accepted Answer

A) overstates;unpopular 
B) overstates;obsolete 
C) overstates;widely used 
D) understates;widely used 
E) understates;obsolete 
A) overstates;unpopular 
B) overstates;obsolete 
C) overstates;widely used 
D) understates;widely used 
E) understates;obsolete C

Question 4

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?

Accepted Answer

A) The money spent on the purchase of stocks 
B) The money spent on the purchase of used furnitures 
C) The money spent on the purchase of a used car 
D) The money spent on the purchase of kitchen appliances 
E) The money spent on the purchase of bonds issued by the government 
A) The money spent on the purchase of stocks 
B) The money spent on the purchase of used furnitures 
C) The money spent on the purchase of a used car 
D) The money spent on the purchase of kitchen appliances 
E) The money spent on the purchase of bonds issued by the government

Question 5

Chain-weighted indexes have less bias compared to fixed-weight indexes.

Accepted Answer

A) True 
 B)False

Question 6

Suppose the real gross domestic product (GDP)equals $200 billion this year and the nominal gross domestic product (GDP)equals $300 billion.This implies that the price level has increased by _____.

Accepted Answer

A) $100 billion 
B) $200 billion 
C) 50 percent 
D) 100 percent 
E) 33 percent 
A) $100 billion 
B) $200 billion 
C) 50 percent 
D) 100 percent 
E) 33 percent

Question 7

Which of the following is an example of an intermediate good?

Accepted Answer

A) The flowers that Mr.Grover buys at a local nursery 
B) The flowers that Timmy picks from a neighbor's garden and brings to Mrs.Grover 
C) The flour that Grandma buys to bake a birthday cake 
D) The flour that Joe buys so that he can eat pizza three nights a week 
E) The flour that Amy orders each month for the bakery she manages 
A) The flowers that Mr.Grover buys at a local nursery 
B) The flowers that Timmy picks from a neighbor's garden and brings to Mrs.Grover 
C) The flour that Grandma buys to bake a birthday cake 
D) The flour that Joe buys so that he can eat pizza three nights a week 
E) The flour that Amy orders each month for the bakery she manages

Question 8

Net taxes are indirect business taxes plus transfer payments.

Accepted Answer

A) True 
 B)False

Question 9

If the nominal gross domestic product (GDP)for a year is $5.4 trillion,and the real gross domestic product (GDP)for the same year is $3.6 trillion,the GDP price index is _____.

Accepted Answer

A) 0.667 
B) 150 
C) 66.67 
D) 50 
E) 33.33 
A) 0.667 
B) 150 
C) 66.67 
D) 50 
E) 33.33

Question 10

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.

Accepted Answer

A) 10 
B) equal to zero 
C) 20 
D) greater than 100 
E) negative 
A) 10 
B) equal to zero 
C) 20 
D) greater than 100 
E) negative

Question 11

Which of the following is included as government purchases in gross domestic product (GDP)?

Accepted Answer

A) Social Security payments to elderly citizens 
B) Welfare benefits distributed to the poor 
C) Outright grants from government to recipients 
D) Payments to clerical workers hired by government 
E) Unemployment compensation benefits 
A) Social Security payments to elderly citizens 
B) Welfare benefits distributed to the poor 
C) Outright grants from government to recipients 
D) Payments to clerical workers hired by government 
E) Unemployment compensation benefits

Question 12

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2001 and 2002.
?
Table 6.3
?
?
$$\begin{array} { c c c } 
\text { Year } & \text { Price Index } & \text { Nominal GDP } \
\hline 2001 & 100 & \$ 95 \text { billion } \
2002 & 105 & \$ 110 \text { billion } \
2003 & 110 & \$ 120 \text { billion } \
2004 & 120 & \$ 125 \text { billion } \
2005 & 132 & \$ 137.5 \text { billion }
\end{array}$$

Accepted Answer

A) increased by slightly less than $10 billion 
B) decreased by slightly more than $5 billion 
C) remained constant 
D) increased by only about $1 billion 
E) increased more than $20 billion 
A) increased by slightly less than $10 billion 
B) decreased by slightly more than $5 billion 
C) remained constant 
D) increased by only about $1 billion 
E) increased more than $20 billion

Question 13

Which of the following correctly illustrates the leakages-injections approach to GDP?

Accepted Answer

A) DI + (NT)= C + I + G + (X ‒ M) 
B) S + C + NT = DI 
C) S + C + (NT)= I + G + (X ‒ M) 
D) S + (NT)+ M = I + G + X 
E) S + (NT)= I + G + (X ‒ M) 
A) DI + (NT)= C + I + G + (X ‒ M) 
B) S + C + NT = DI 
C) S + C + (NT)= I + G + (X ‒ M) 
D) S + (NT)+ M = I + G + X 
E) S + (NT)= I + G + (X ‒ M)

Question 14

Which of the following is true of leakages and injections in the circular flow model?

Accepted Answer

A) Leakages minus injections equal gross domestic product (GDP). 
B) Injections minus leakages equal gross domestic product (GDP). 
C) Leakages minus injections equal zero in equilibrium. 
D) Leakages must be less than injections for an economy to be in equilibrium. 
E) Leakages must be greater than injections for an economy to be growing. 
A) Leakages minus injections equal gross domestic product (GDP). 
B) Injections minus leakages equal gross domestic product (GDP). 
C) Leakages minus injections equal zero in equilibrium. 
D) Leakages must be less than injections for an economy to be in equilibrium. 
E) Leakages must be greater than injections for an economy to be growing.

Question 15

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.

Accepted Answer

A) $200 billion 
B) 50 percent 
C) $100 billion 
D) 100 percent 
E) 200 percent 
A) $200 billion 
B) 50 percent 
C) $100 billion 
D) 100 percent 
E) 200 percent

Question 16

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005.
?
Table 6.3
?
?
$$\begin{array} { c c c } 
\text { Year } & \text { Price Index } & \text { Nominal GDP } \
\hline 2001 & 100 & \$ 95 \text { billion } \
2002 & 105 & \$ 110 \text { billion } \
2003 & 110 & \$ 120 \text { billion } \
2004 & 120 & \$ 125 \text { billion } \
2005 & 132 & \$ 137.5 \text { billion }
\end{array}$$

Accepted Answer

A) increased by about $5 billion 
B) decreased by about $5 billion 
C) remained almost constant 
D) increased by about $2 billion 
E) decreased by about $2 billion 
A) increased by about $5 billion 
B) decreased by about $5 billion 
C) remained almost constant 
D) increased by about $2 billion 
E) decreased by about $2 billion

Question 17

An increase in household production will increase gross domestic product (GDP).

Accepted Answer

A) True 
 B)False

Question 18

A chain-weighted index recognizes the fact that the composition of output changes over time.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an example of an injection into the circular flow of income and expenditure?

Accepted Answer

A) Government spending 
B) Imports 
C) Disposable income 
D) Net taxes 
E) Saving 
A) Government spending 
B) Imports 
C) Disposable income 
D) Net taxes 
E) Saving

Question 20

If an economy produces final output worth $5 trillion,then the aggregate income generated by that production:

Accepted Answer

A) will be $5 trillion. 
B) will be more than $5 trillion. 
C) will be $5 trillion minus taxes. 
D) will be less than $5 trillion. 
E) will be $5 trillion plus transaction costs. 
A) will be $5 trillion. 
B) will be more than $5 trillion. 
C) will be $5 trillion minus taxes. 
D) will be less than $5 trillion. 
E) will be $5 trillion plus transaction costs.

Lois sells ten sweaters she had knitted to a retail store.The gross domestic product (GDP)of her country _____.

One of the limitations of the national income accounting system is:

The consumer price index (CPI)_ inflation because it includes an item in the market basket only after the product becomes _.

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?

Chain-weighted indexes have less bias compared to fixed-weight indexes.

Suppose the real gross domestic product (GDP)equals $200 billion this year and the nominal gross domestic product (GDP)equals $300 billion.This implies that the price level has increased by _____.

Which of the following is an example of an intermediate good?

Net taxes are indirect business taxes plus transfer payments.

If the nominal gross domestic product (GDP)for a year is $5.4 trillion,and the real gross domestic product (GDP)for the same year is $3.6 trillion,the GDP price index is _____.

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.

Which of the following is included as government purchases in gross domestic product (GDP)?

Which of the following correctly illustrates the leakages-injections approach to GDP?

Which of the following is true of leakages and injections in the circular flow model?

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.

An increase in household production will increase gross domestic product (GDP).

A chain-weighted index recognizes the fact that the composition of output changes over time.

Which of the following is an example of an injection into the circular flow of income and expenditure?

If an economy produces final output worth $5 trillion,then the aggregate income generated by that production:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 6: Tracking the U S Economy

Lois sells ten sweaters she had knitted to a retail store.The gross domestic product (GDP)of her country _____.

One of the limitations of the national income accounting system is:

The consumer price index (CPI)_____ inflation because it includes an item in the market basket only after the product becomes _____.

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?

Chain-weighted indexes have less bias compared to fixed-weight indexes.

Suppose the real gross domestic product (GDP)equals $200 billion this year and the nominal gross domestic product (GDP)equals $300 billion.This implies that the price level has increased by _____.

Which of the following is an example of an intermediate good?

Net taxes are indirect business taxes plus transfer payments.

If the nominal gross domestic product (GDP)for a year is $5.4 trillion,and the real gross domestic product (GDP)for the same year is $3.6 trillion,the GDP price index is _____.

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.

Which of the following is included as government purchases in gross domestic product (GDP)?

Which of the following correctly illustrates the leakages-injections approach to GDP?

Which of the following is true of leakages and injections in the circular flow model?

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.

An increase in household production will increase gross domestic product (GDP).

A chain-weighted index recognizes the fact that the composition of output changes over time.

Which of the following is an example of an injection into the circular flow of income and expenditure?

If an economy produces final output worth $5 trillion,then the aggregate income generated by that production:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

The consumer price index (CPI)_ inflation because it includes an item in the market basket only after the product becomes _.