Question 1

Exhibit 7-2
  
-Refer to Exhibit 7-2. Assuming that 1990 is the base year, Real GDP in 2019 is

Accepted Answer

A) $49. 
B) $51. 
C) $86. 
D) $92. 
E) not possible to calculate without the CPI. 
A) $49. 
B) $51. 
C) $86. 
D) $92. 
E) not possible to calculate without the CPI.

Question 2

Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesirable in terms of promoting the economic health and strength of the economy.

Accepted Answer

Investment can rise as a result of: (1)

Question 3

Which of the following is the correct equation for computing personal income?

Accepted Answer

A) Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B) Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C) Personal income = National income - taxes 
D) Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E) none of the above 
A) Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B) Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C) Personal income = National income - taxes 
D) Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E) none of the above

Question 4

In 1950, the country with the highest per-capita GDP was

Accepted Answer

A) Switzerland. 
B) New Zealand. 
C) the United States. 
D) Venezuela. 
E) the Netherlands. 
A) Switzerland. 
B) New Zealand. 
C) the United States. 
D) Venezuela. 
E) the Netherlands.

Question 5

With respect to the business cycle, describe the difference between the expansion phase and the recovery phase.

Accepted Answer

The recovery phase is the period when Re

Question 6

An economy produces 5X, 10Y, and 20Z in a year. Base-year prices for these goods are $1, $3, and $5, respectively. Current-year prices for these goods are $2, $3, and $4, respectively. What is Real GDP?

Accepted Answer

A) $135 
B) $165 
C) $120 
D) $170 
E) none of the above 
A) $135 
B) $165 
C) $120 
D) $170 
E) none of the above

Question 7

Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion. In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion. Which of the following statements is true?

Accepted Answer

A) Per-capita GDP is necessarily higher in year 2 than year 1. 
B) People are "better off" in year 2 than in year 1 because there are more goods and services in year 2 than year 1. 
C) Government transfer payments were higher in year 2 than in year 1. 
D) a and b 
E) none of the above 
A) Per-capita GDP is necessarily higher in year 2 than year 1. 
B) People are "better off" in year 2 than in year 1 because there are more goods and services in year 2 than year 1. 
C) Government transfer payments were higher in year 2 than in year 1. 
D) a and b 
E) none of the above

Question 8

The largest component of national income in the United States is

Accepted Answer

A) rental income. 
B) proprietors' income. 
C) compensation of employees. 
D) corporate profits. 
E) net interest. 
A) rental income. 
B) proprietors' income. 
C) compensation of employees. 
D) corporate profits. 
E) net interest.

Question 9

The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

Accepted Answer

A) True 
 B)False

Question 10

If Real GDP was $9,542 billion in year 2 and it had been $9,300 billion in year 1, what was the approximate economic growth rate during this time period?

Accepted Answer

A) 9.7 percent 
B) 2.4 percent 
C) 3.5 percent 
D) 2.6 percent 
A) 9.7 percent 
B) 2.4 percent 
C) 3.5 percent 
D) 2.6 percent

Question 11

Exhibit 7-3
  
-Refer to Exhibit 7-3. Consumption is equal to

Accepted Answer

A) $3,700. 
B) $9,000. 
C) $10,150. 
D) $8,200. 
E) $9,700. 
A) $3,700. 
B) $9,000. 
C) $10,150. 
D) $8,200. 
E) $9,700.

Question 12

An example of income earned but not received is

Accepted Answer

A) welfare payments. 
B) Social Security payments. 
C) undistributed profits. 
D) a and b 
E) a, b, and c 
A) welfare payments. 
B) Social Security payments. 
C) undistributed profits. 
D) a and b 
E) a, b, and c

Question 13

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations. Explain why these transactions are not included in GDP and give an example of each to help support your answer.

Accepted Answer

Certain nonmarket goods and services are

Question 14

To macroeconomists, investment is mainly the purchases of goods and services

Accepted Answer

A) by businesses. 
B) to hold as wealth, such as gold coins or art. 
C) to hold as wealth, such as stocks and bonds. 
D) by the government. 
E) ​b and c 
A) by businesses. 
B) to hold as wealth, such as gold coins or art. 
C) to hold as wealth, such as stocks and bonds. 
D) by the government. 
E) ​b and c

Question 15

Look at the following data: consumption = $715 billion; exports = $50 billion; imports = $83 billion; inventory investment = $125 billion; fixed investment = $400 billion; government purchases = $300 billion. GDP is equal to

Accepted Answer

A) $1,673 billion. 
B) $1,466 billion. 
C) $1,911 billion. 
D) $1,507 billion. 
E) none of the above 
A) $1,673 billion. 
B) $1,466 billion. 
C) $1,911 billion. 
D) $1,507 billion. 
E) none of the above

Question 16

Real GDP is always measured in

Accepted Answer

A) cheaper dollars. 
B) quality of goods produced. 
C) base-year dollars. 
D) nominal dollars. 
E) current dollars. 
A) cheaper dollars. 
B) quality of goods produced. 
C) base-year dollars. 
D) nominal dollars. 
E) current dollars.

Question 17

Depreciation refers to a decrease in the value of a good caused by

Accepted Answer

A) an increase in the price level. 
B) a decrease in the price level. 
C) "wear and tear" of capital goods over time. 
D) the depreciation allowance. 
E) a decrease in purchasing power. 
A) an increase in the price level. 
B) a decrease in the price level. 
C) "wear and tear" of capital goods over time. 
D) the depreciation allowance. 
E) a decrease in purchasing power.

Question 18

If a business firm in Country A produces a good but does not sell it in that same year, that good will not be counted in Country A's GDP.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A) a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B) a headlight bulb purchased by Ford Motor Co.from a supplier 
C) a headlight bulb produced but not sold this year and thus ending up as inventory 
D) none of the above, i.e., all would be included 
A) a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B) a headlight bulb purchased by Ford Motor Co.from a supplier 
C) a headlight bulb produced but not sold this year and thus ending up as inventory 
D) none of the above, i.e., all would be included

Question 20

Which of the following items is a final good?

Accepted Answer

A) mustard in a deli 
B) tin purchased by a tin can company 
C) a sweater purchased by someone in a department store 
D) a and b 
E) a, b, and c 
A) mustard in a deli 
B) tin purchased by a tin can company 
C) a sweater purchased by someone in a department store 
D) a and b 
E) a, b, and c

Exam 7: Macroeconomic Measurements Part II Gdp and Real Gdp

Exhibit 7-2 -Refer to Exhibit 7-2. Assuming that 1990 is the base year, Real GDP in 2019 is

Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesirable in terms of promoting the economic health and strength of the economy.

Which of the following is the correct equation for computing personal income?

In 1950, the country with the highest per-capita GDP was

With respect to the business cycle, describe the difference between the expansion phase and the recovery phase.

An economy produces 5X, 10Y, and 20Z in a year. Base-year prices for these goods are $1, $3, and $5, respectively. Current-year prices for these goods are $2, $3, and $4, respectively. What is Real GDP?

Suppose that in year 1 every adult in the country works 40 hours a week and GDP is $6.7 trillion. In year 2 every adult in the country works 45 hours a week and GDP is $7.5 trillion. Which of the following statements is true?

The largest component of national income in the United States is

The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

If Real GDP was $9,542 billion in year 2 and it had been $9,300 billion in year 1, what was the approximate economic growth rate during this time period?

Exhibit 7-3 -Refer to Exhibit 7-3. Consumption is equal to

An example of income earned but not received is

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations. Explain why these transactions are not included in GDP and give an example of each to help support your answer.

To macroeconomists, investment is mainly the purchases of goods and services

Look at the following data: consumption = $715 billion; exports = $50 billion; imports = $83 billion; inventory investment = $125 billion; fixed investment = $400 billion; government purchases = $300 billion. GDP is equal to

Real GDP is always measured in

Depreciation refers to a decrease in the value of a good caused by

If a business firm in Country A produces a good but does not sell it in that same year, that good will not be counted in Country A's GDP.

Which of the following would not be included in the calculation of this year's GDP?

Which of the following items is a final good?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

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