Question 1

The immediate effect of a purchase of a government bond on the gross domestic product (GDP)is_____.

Accepted Answer

A) a decrease in consumption 
B) an increase in government spending 
C) an increase in investment 
D) a decrease in investment 
E) nonexistent,since no real goods and services have been produced 
A) a decrease in consumption 
B) an increase in government spending 
C) an increase in investment 
D) a decrease in investment 
E) nonexistent,since no real goods and services have been produced

Question 2

Which of the following will be excluded from the measurement of gross domestic product (GDP)?

Accepted Answer

A) The market value of automobiles purchased by the federal government 
B) The market value of California wine purchased by a Canadian firm 
C) The payment of employees' medical insurance 
D) The market value of computers purchased by state governments 
E) The market value of transactions in the underground economy 
A) The market value of automobiles purchased by the federal government 
B) The market value of California wine purchased by a Canadian firm 
C) The payment of employees' medical insurance 
D) The market value of computers purchased by state governments 
E) The market value of transactions in the underground economy

Question 3

The value added method to measure GDP does not avoid double counting.

Accepted Answer

A) True 
 B)False

Question 4

The statement "Gross domestic product (GDP)values all output equally" means that:

Accepted Answer

A) household production is treated the same as production by firms. 
B) depreciation of manufactured capital is treated the same as depletion of natural resources. 
C) the purchase of pollution control equipment is valued the same as pollution itself. 
D) leisure time is valued the same as time spent working a job. 
E) the market price of output is the measure of that output's value. 
A) household production is treated the same as production by firms. 
B) depreciation of manufactured capital is treated the same as depletion of natural resources. 
C) the purchase of pollution control equipment is valued the same as pollution itself. 
D) leisure time is valued the same as time spent working a job. 
E) the market price of output is the measure of that output's value.

Question 5

Whenever there is inflation,increase in nominal gross domestic product (GDP)overstates the growth rate of the economy.

Accepted Answer

A) True 
 B)False

Question 6

The gross domestic product (GDP)excludes:

Accepted Answer

A) the increase in inventories during a given period. 
B) the expenditures by government for newly produced goods and services during a given period. 
C) the value of intermediate goods produced in an economy during a given period. 
D) the value of final output during a given period. 
E) household expenditure on durable goods. 
A) the increase in inventories during a given period. 
B) the expenditures by government for newly produced goods and services during a given period. 
C) the value of intermediate goods produced in an economy during a given period. 
D) the value of final output during a given period. 
E) household expenditure on durable goods.

Question 7

Gross private domestic investment consists of _____.

Accepted Answer

A) spending by individual households on automobiles and durable goods 
B) spending by businesses on labor resources 
C) net additions to business inventories 
D) spending by government on welfare benefits 
E) spending by households on stocks and bonds 
A) spending by individual households on automobiles and durable goods 
B) spending by businesses on labor resources 
C) net additions to business inventories 
D) spending by government on welfare benefits 
E) spending by households on stocks and bonds

Question 8

_____ is measured in terms of current-year prices.

Accepted Answer

A) Nominal gross domestic product (GDP) 
B) GDP price index 
C) Real gross domestic product (GDP) 
D) Arbitrage 
E) Depreciation 
A) Nominal gross domestic product (GDP) 
B) GDP price index 
C) Real gross domestic product (GDP) 
D) Arbitrage 
E) Depreciation

Question 9

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.

Accepted Answer

A) 1.2 
B) 17 
C) 20 
D) 83​ 
E) 120 
A) 1.2 
B) 17 
C) 20 
D) 83​ 
E) 120

Question 10

Which of the following statements is true regarding leakages and injections?

Accepted Answer

A) Government transfer payments must equal taxes because one is a leakage and the other is an injection. 
B) Imports must equal exports since both are leakages. 
C) Government purchases,investment,and exports are leakages from the circular flow of income and expenditure. 
D) Savings and net taxes are leakages from the circular flow of income and expenditure. 
E) Net taxes are an injection into the circular flow,while exports are a leakage. 
A) Government transfer payments must equal taxes because one is a leakage and the other is an injection. 
B) Imports must equal exports since both are leakages. 
C) Government purchases,investment,and exports are leakages from the circular flow of income and expenditure. 
D) Savings and net taxes are leakages from the circular flow of income and expenditure. 
E) Net taxes are an injection into the circular flow,while exports are a leakage.

Question 11

The value of the films starring Charlie Chaplin produced in the United States that still exist will not be included in this year's U.S.gross domestic product (GDP)because:

Accepted Answer

A) Charlie Chaplin was not an American citizen. 
B) Charlie Chaplin did not make the films this year. 
C) the films earn less revenue. 
D) the films no longer have any value except to collectors. 
E) films are intermediate goods. 
A) Charlie Chaplin was not an American citizen. 
B) Charlie Chaplin did not make the films this year. 
C) the films earn less revenue. 
D) the films no longer have any value except to collectors. 
E) films are intermediate goods.

Question 12

If real gross domestic product (GDP)in a particular year is $5,000 trillion and nominal gross domestic product (GDP)in that same year is $4,000 trillion,then the:

Accepted Answer

A) consumer price index (CPI)is 125. 
B) economic activity has decreased by 20 percent. 
C) GDP price index is 125. 
D) GDP price index is 80. 
E) economy has grown by 20 percent. 
A) consumer price index (CPI)is 125. 
B) economic activity has decreased by 20 percent. 
C) GDP price index is 125. 
D) GDP price index is 80. 
E) economy has grown by 20 percent.

Question 13

The value of tires purchased by a company to use on its cars is not included when calculating the gross domestic product (GDP).

Accepted Answer

A) True 
 B)False

Question 14

The base year for a price index is the year_____.

Accepted Answer

A) in which prices were lowest 
B) in which prices were highest 
C) in which real output was the largest 
D) in which prices were stable 
E) that serves as a reference point 
A) in which prices were lowest 
B) in which prices were highest 
C) in which real output was the largest 
D) in which prices were stable 
E) that serves as a reference point

Question 15

The GDP price index:

Accepted Answer

A) measures the average price of final goods and services produced in an economy. 
B) measures the quality of goods produced in an economy. 
C) is derived using the prices of only imported and exported goods and services. 
D) is derived using the implicit prices of goods and services produced by the government. 
E) measures the value of all intermediate goods and services sold in an economy. 
A) measures the average price of final goods and services produced in an economy. 
B) measures the quality of goods produced in an economy. 
C) is derived using the prices of only imported and exported goods and services. 
D) is derived using the implicit prices of goods and services produced by the government. 
E) measures the value of all intermediate goods and services sold in an economy.

Question 16

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.

Accepted Answer

A) True 
 B)False

Question 17

Transfer payments are an injection into the circular flow of income and expenditure model.

Accepted Answer

A) True 
 B)False

Question 18

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.

Accepted Answer

A) True 
 B)False

Question 19

Net exports equals _____.

Accepted Answer

A) the value of exports minus the value of imports 
B) the value of imports minus the value of exports 
C) the value of imports minus tariffs 
D) the value of exports minus tariffs 
E) the value of exports plus the value of imports minus depreciation 
A) the value of exports minus the value of imports 
B) the value of imports minus the value of exports 
C) the value of imports minus tariffs 
D) the value of exports minus tariffs 
E) the value of exports plus the value of imports minus depreciation

Question 20

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.

Accepted Answer

A) True 
 B)False

The immediate effect of a purchase of a government bond on the gross domestic product (GDP)is_____.

Which of the following will be excluded from the measurement of gross domestic product (GDP)?

The value added method to measure GDP does not avoid double counting.

The statement "Gross domestic product (GDP)values all output equally" means that:

Whenever there is inflation,increase in nominal gross domestic product (GDP)overstates the growth rate of the economy.

The gross domestic product (GDP)excludes:

Gross private domestic investment consists of _____.

_____ is measured in terms of current-year prices.

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.

Which of the following statements is true regarding leakages and injections?

The value of the films starring Charlie Chaplin produced in the United States that still exist will not be included in this year's U.S.gross domestic product (GDP)because:

If real gross domestic product (GDP)in a particular year is $5,000 trillion and nominal gross domestic product (GDP)in that same year is $4,000 trillion,then the:

The value of tires purchased by a company to use on its cars is not included when calculating the gross domestic product (GDP).

The base year for a price index is the year_____.

The GDP price index:

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.

Transfer payments are an injection into the circular flow of income and expenditure model.

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.

Net exports equals _____.

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.

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

The immediate effect of a purchase of a government bond on the gross domestic product (GDP)is_____.

Which of the following will be excluded from the measurement of gross domestic product (GDP)?

The value added method to measure GDP does not avoid double counting.

The statement "Gross domestic product (GDP)values all output equally" means that:

Whenever there is inflation,increase in nominal gross domestic product (GDP)overstates the growth rate of the economy.

The gross domestic product (GDP)excludes:

Gross private domestic investment consists of _____.

_____ is measured in terms of current-year prices.

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.

Which of the following statements is true regarding leakages and injections?

The value of the films starring Charlie Chaplin produced in the United States that still exist will not be included in this year's U.S.gross domestic product (GDP)because:

If real gross domestic product (GDP)in a particular year is $5,000 trillion and nominal gross domestic product (GDP)in that same year is $4,000 trillion,then the:

The value of tires purchased by a company to use on its cars is not included when calculating the gross domestic product (GDP).

The base year for a price index is the year_____.

The GDP price index:

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.

Transfer payments are an injection into the circular flow of income and expenditure model.

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.

Net exports equals _____.

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.

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