Question 1

Recessions are not associated with which of the following?

Accepted Answer

A)  increased bankruptcies 
B)  falling profits 
C)  falling incomes 
D)  falling unemployment 
A)  increased bankruptcies 
B)  falling profits 
C)  falling incomes 
D)  falling unemployment D

Question 2

The basic tools of supply and demand are

Accepted Answer

A)  useful only in the analysis of economic behavior in individual markets. 
B)  useful in analyzing the overall economy,but not in analyzing individual markets. 
C)  central to microeconomic analysis,but seldom used in macroeconomic analysis. 
D)  central to macroeconomic analysis as well as to microeconomic analysis. 
A)  useful only in the analysis of economic behavior in individual markets. 
B)  useful in analyzing the overall economy,but not in analyzing individual markets. 
C)  central to microeconomic analysis,but seldom used in macroeconomic analysis. 
D)  central to macroeconomic analysis as well as to microeconomic analysis. D

Question 3

Janet bought flour and used it to bake bread she ate.ABC Bakery bought flour which it used to bake bread that customers purchased.In which case will the flour be counted as a final good?

Accepted Answer

A)  Janet's purchase and ABC Bakery's purchase. 
B)  ABC Bakery's purchase but not Janet's purchase. 
C)  Janet's purchase but not ABC Bakery's purchase. 
D)  Neither Janet's purchase nor ABC Bakery's purchase. 
A)  Janet's purchase and ABC Bakery's purchase. 
B)  ABC Bakery's purchase but not Janet's purchase. 
C)  Janet's purchase but not ABC Bakery's purchase. 
D)  Neither Janet's purchase nor ABC Bakery's purchase. C

Question 4

John buys a used car for $5,400 and spends $600 on new parts,made in the U.S. ,to fix the car.The end result of these two transactions is

Accepted Answer

A)  U.S.consumption purchases increase by $5,400 and U.S.GDP increases by $5,400. 
B)  U.S.consumption purchases increase by $6,000 and U.S.GDP increases by $6,000. 
C)  U.S.consumption purchases increase by $600 and U.S.GDP increases by $600. 
D)  U.S.consumption purchases increase by $600 and U.S.GDP increases by $6,000. 
A)  U.S.consumption purchases increase by $5,400 and U.S.GDP increases by $5,400. 
B)  U.S.consumption purchases increase by $6,000 and U.S.GDP increases by $6,000. 
C)  U.S.consumption purchases increase by $600 and U.S.GDP increases by $600. 
D)  U.S.consumption purchases increase by $600 and U.S.GDP increases by $6,000.

Question 5

Table 10-6
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009.
Prices and Quantities
  
-Refer to Table 10-6.This country's inflation rate from 2010 to 2011 was

Accepted Answer

A)  15.2%. 
B)  25.4%. 
C)  34.1%. 
D)  43.9%. 
A)  15.2%. 
B)  25.4%. 
C)  34.1%. 
D)  43.9%.

Question 6

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 7

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

Accepted Answer

A)  both real GDP and nominal GDP 
B)  real GDP but not nominal GDP 
C)  nominal GDP but not real GDP 
D)  neither nominal GDP nor real GDP 
A)  both real GDP and nominal GDP 
B)  real GDP but not nominal GDP 
C)  nominal GDP but not real GDP 
D)  neither nominal GDP nor real GDP

Question 8

In the actual economy,goods and services are purchased by

Accepted Answer

A)  households,but not firms or the government. 
B)  households and firms,but not the government. 
C)  households and the government,but not firms. 
D)  households,firms,and the government. 
A)  households,but not firms or the government. 
B)  households and firms,but not the government. 
C)  households and the government,but not firms. 
D)  households,firms,and the government.

Question 9

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

Accepted Answer

A)  saving per person. 
B)  GDP per person. 
C)  government expenditures per person. 
D)  investment per business firm. 
A)  saving per person. 
B)  GDP per person. 
C)  government expenditures per person. 
D)  investment per business firm.

Question 10

Which of the following items is included in GDP?

Accepted Answer

A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP. 
A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as those performed by a doctor 
D)  All of the above are included in GDP.

Question 11

In a simple circular-flow diagram,total income and total expenditure are

Accepted Answer

A)  never equal because total income always exceeds total expenditure. 
B)  seldom equal because of the ongoing changes in an economy's unemployment rate. 
C)  equal only when the government purchases no goods or services. 
D)  always equal because every transaction has a buyer and a seller. 
A)  never equal because total income always exceeds total expenditure. 
B)  seldom equal because of the ongoing changes in an economy's unemployment rate. 
C)  equal only when the government purchases no goods or services. 
D)  always equal because every transaction has a buyer and a seller.

Question 12

Which of the following statements about GDP is correct?

Accepted Answer

A)  GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B)  Money continuously flows from households to firms and then back to households,and GDP measures this flow of money. 
C)  GDP is generally regarded as the best single measure of a society's economic well-being. 
D)  All of the above are correct. 
A)  GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. 
B)  Money continuously flows from households to firms and then back to households,and GDP measures this flow of money. 
C)  GDP is generally regarded as the best single measure of a society's economic well-being. 
D)  All of the above are correct.

Question 13

Table 10-2
The table below contains data for the country of Crete for the year 2010.
  
-Refer to Table 10-2.What was Crete's consumption in 2010?

Accepted Answer

A)  $1810 
B)  $2013 
C)  $2315 
D)  $3131 
A)  $1810 
B)  $2013 
C)  $2315 
D)  $3131

Question 14

A recession has traditionally been defined as a period during which

Accepted Answer

A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters. 
A)  nominal GDP declines for two consecutive quarters. 
B)  nominal GDP declines for four consecutive quarters. 
C)  real GDP declines for two consecutive quarters. 
D)  real GDP declines for four consecutive quarters.

Question 15

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009.It also reported a GDP deflator of 125 in 2010 and 105 in 2009.Between 2009 and 2010,

Accepted Answer

A)  real output and the price level both rose. 
B)  real output rose and the price level fell. 
C)  real output fell and the price level rose. 
D)  real output and the price level both fell. 
A)  real output and the price level both rose. 
B)  real output rose and the price level fell. 
C)  real output fell and the price level rose. 
D)  real output and the price level both fell.

Question 16

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP,but the value of intermediate goods produced and not sold is included directly as part of GDP.

Accepted Answer

Intermediate goods produced and sold dur

Question 17

In the United States in 2009,consumption represented approximately

Accepted Answer

A)  60 percent of GDP. 
B)  70 percent of GDP. 
C)  80 percent of GDP. 
D)  90 percent of GDP. 
A)  60 percent of GDP. 
B)  70 percent of GDP. 
C)  80 percent of GDP. 
D)  90 percent of GDP.

Question 18

Government purchases include spending on goods and services by

Accepted Answer

A)  the federal government,but not by state or local governments. 
B)  federal and state governments,but not by local governments. 
C)  federal,state,and local governments. 
D)  federal,state,and local governments,as well as household spending by employees of those governments. 
A)  the federal government,but not by state or local governments. 
B)  federal and state governments,but not by local governments. 
C)  federal,state,and local governments. 
D)  federal,state,and local governments,as well as household spending by employees of those governments.

Question 19

If in some year nominal GDP was $18 billion and the GDP deflator was 120,what was real GDP?

Accepted Answer

A)  $6.7 billion 
B)  $15 billion 
C)  $21.6 billion 
D)  $38 billion 
A)  $6.7 billion 
B)  $15 billion 
C)  $21.6 billion 
D)  $38 billion

Question 20

When studying changes in the economy over time,economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services.In other words,economists want to study

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  the GDP deflator. 
D)  GNP. 
A)  nominal GDP. 
B)  real GDP. 
C)  the GDP deflator. 
D)  GNP.

Exam 23: Measuring a Nations Income

Recessions are not associated with which of the following?

The basic tools of supply and demand are

Janet bought flour and used it to bake bread she ate.ABC Bakery bought flour which it used to bake bread that customers purchased.In which case will the flour be counted as a final good?

John buys a used car for $5,400 and spends $600 on new parts,made in the U.S. ,to fix the car.The end result of these two transactions is

Table 10-6 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2009. Prices and Quantities -Refer to Table 10-6.This country's inflation rate from 2010 to 2011 was

Microeconomics and macroeconomics are closely linked.

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

In the actual economy,goods and services are purchased by

GDP is used as the basic measure of a society's economic well-being.A better measure of the economic well-being of individuals in society is

Which of the following items is included in GDP?

In a simple circular-flow diagram,total income and total expenditure are

Which of the following statements about GDP is correct?

Table 10-2 The table below contains data for the country of Crete for the year 2010. -Refer to Table 10-2.What was Crete's consumption in 2010?

A recession has traditionally been defined as a period during which

A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009.It also reported a GDP deflator of 125 in 2010 and 105 in 2009.Between 2009 and 2010,

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP,but the value of intermediate goods produced and not sold is included directly as part of GDP.

In the United States in 2009,consumption represented approximately

Government purchases include spending on goods and services by

If in some year nominal GDP was $18 billion and the GDP deflator was 120,what was real GDP?

When studying changes in the economy over time,economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services.In other words,economists want to study

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply,demand,and Government Policies

Consumers,producers,and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Market for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring the Cost of Living

Production and Growth

Saving,investment,and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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