Question 1

The underground economy

Accepted Answer

A) excludes the amount of criminal activity in an economy. 
B) is larger for developed nations than developing nations when measured as a percent of GDP. 
C) includes otherwise legal transactions that go unreported or unrecorded. 
D) in the United States is insignificant is size when compared to the official measure of GDP. 
A) excludes the amount of criminal activity in an economy. 
B) is larger for developed nations than developing nations when measured as a percent of GDP. 
C) includes otherwise legal transactions that go unreported or unrecorded. 
D) in the United States is insignificant is size when compared to the official measure of GDP.

Question 2

If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

Accepted Answer

A) True 
 B)False

Question 3

Much of macroeconomics attempts to explain

Accepted Answer

A) changes in the price of oil and gasoline. 
B) long-run growth and short-run fluctuations in real GDP. 
C) changes in the growth rate of state government spending. 
D) changes in the prices and quantities of individual goods and services. 
A) changes in the price of oil and gasoline. 
B) long-run growth and short-run fluctuations in real GDP. 
C) changes in the growth rate of state government spending. 
D) changes in the prices and quantities of individual goods and services.

Question 4

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

Question 5

In the simple circular-flow diagram, with households and firms, GDP can be computed

Accepted Answer

A) ​as the total payments for factors of production made by households. 
B) ​as the total expenditures by households on goods but not services, since services are intangible. 
C) ​as the total expenditures by households on goods and services. 
D) ​as the total expenditures by households on goods and services, less taxes paid. 
A) ​as the total payments for factors of production made by households. 
B) ​as the total expenditures by households on goods but not services, since services are intangible. 
C) ​as the total expenditures by households on goods and services. 
D) ​as the total expenditures by households on goods and services, less taxes paid.

Question 6

What are exports, and how are they different from imports?

Accepted Answer

Exports are domestically produ

Question 7

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

Accepted Answer

A) $0 
B) $10,000 
C) $90,000 
D) $100,000 
A) $0 
B) $10,000 
C) $90,000 
D) $100,000

Question 8

The percentage change in the price level from one period to another is called

Accepted Answer

A) the growth rate. 
B) the inflation rate. 
C) the GDP deflator. 
D) the unemployment rate. 
A) the growth rate. 
B) the inflation rate. 
C) the GDP deflator. 
D) the unemployment rate.

Question 9

Microeconomics and macroeconomics are closely linked.

Accepted Answer

A) True 
 B)False

Question 10

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is included in government purchases?

Accepted Answer

A) unemployment benefits a state pays 
B) Social Security payments the U.S. government makes 
C) the services of a U.S. government attorney valued at the cost of her salary 
D) All of the above are correct. 
A) unemployment benefits a state pays 
B) Social Security payments the U.S. government makes 
C) the services of a U.S. government attorney valued at the cost of her salary 
D) All of the above are correct.

Question 12

Nominal GDP is $15 trillion and real GDP is $10 trillion. What is the GDP deflator? Show your work.

Accepted Answer

The GDP Deflator = N

Question 13

Disposable personal income is the income that

Accepted Answer

A) households have left after paying taxes and non-tax payments to the government. 
B) businesses have left after paying taxes and non-tax payments to the government. 
C) households and noncorporate businesses have left after paying taxes and non-tax payments to the government. 
D) households and businesses have left after paying taxes and non-tax payments to the government. 
A) households have left after paying taxes and non-tax payments to the government. 
B) businesses have left after paying taxes and non-tax payments to the government. 
C) households and noncorporate businesses have left after paying taxes and non-tax payments to the government. 
D) households and businesses have left after paying taxes and non-tax payments to the government.

Question 14

Table 23-1
The table below contains data for Chereaux for the year 2015.  
-Refer to Table 23-1. Net national product for Chereaux in 2015 is

Accepted Answer

A) $194. 
B) $196. 
C) $198. 
D) $204. 
A) $194. 
B) $196. 
C) $198. 
D) $204.

Question 15

A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included?

Accepted Answer

A) U.S. consumption and U.S. imports 
B) U.S. consumption but not U.S. imports 
C) U.S. imports but not U.S. consumption 
D) neither U.S. consumption nor U.S. imports 
A) U.S. consumption and U.S. imports 
B) U.S. consumption but not U.S. imports 
C) U.S. imports but not U.S. consumption 
D) neither U.S. consumption nor U.S. imports

Question 16

Macroeconomists study

Accepted Answer

A) the decisions of individual households and firms. 
B) the interaction between households and firms. 
C) economy-wide phenomena. 
D) regulations imposed on firms and unions. 
A) the decisions of individual households and firms. 
B) the interaction between households and firms. 
C) economy-wide phenomena. 
D) regulations imposed on firms and unions.

Question 17

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not included in U.S. GDP?

Accepted Answer

A) additions of newly produced output to inventory 
B) production of U.S citizens working in foreign countries. 
C) the estimated rental value of owner-occupied housing 
D) the value of food purchased from a grocery store to make meals at home without pay 
A) additions of newly produced output to inventory 
B) production of U.S citizens working in foreign countries. 
C) the estimated rental value of owner-occupied housing 
D) the value of food purchased from a grocery store to make meals at home without pay

Question 19

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

Accepted Answer

A) included in current GDP because GDP measures the value of all goods and services sold in the current year. 
B) included in current GDP but valued at their original prices. 
C) not included in current GDP because it is difficult to determine their value. 
D) not included in current GDP because GDP only measures the value of goods and services produced in the current year. 
A) included in current GDP because GDP measures the value of all goods and services sold in the current year. 
B) included in current GDP but valued at their original prices. 
C) not included in current GDP because it is difficult to determine their value. 
D) not included in current GDP because GDP only measures the value of goods and services produced in the current year.

Question 20

Which of the following is not a question addressed by macroeconomists?

Accepted Answer

A) Why is average income high in some nations but low in others? 
B) What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? 
C) What is the impact of foreign competition on the U.S. auto industry? 
D) Why do production and employment expand in some years and contract in others? 
A) Why is average income high in some nations but low in others? 
B) What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? 
C) What is the impact of foreign competition on the U.S. auto industry? 
D) Why do production and employment expand in some years and contract in others?

Exam 23: Measuring a Nation S Income

The underground economy

If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800.

Much of macroeconomics attempts to explain

Recessions are not associated with which of the following?

In the simple circular-flow diagram, with households and firms, GDP can be computed

What are exports, and how are they different from imports?

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?

The percentage change in the price level from one period to another is called

Microeconomics and macroeconomics are closely linked.

Most goods whose purchases are included in the investment component of GDP are used to produce other goods in future periods.

Which of the following is included in government purchases?

Nominal GDP is $15 trillion and real GDP is $10 trillion. What is the GDP deflator? Show your work.

Disposable personal income is the income that

Table 23-1 The table below contains data for Chereaux for the year 2015. -Refer to Table 23-1. Net national product for Chereaux in 2015 is

A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included?

Macroeconomists study

If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200.

Which of the following is not included in U.S. GDP?

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

Which of the following is not a question addressed by macroeconomists?

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

Applications: 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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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