Question 1

Using the expenditures approach, GDP is equal to consumption plus investment, plus government purchases, minus net exports.

Accepted Answer

A) True 
 B)False

Question 2

Net domestic product (NDP) is the total value of new goods available in the economy after worn out capital goods have been replaced.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that inventory investment is $20 billion and (total) investment is $680 billion. What does purchases of newly produced capital goods equal?

Accepted Answer

A) $715 billion 
B) $785 billion 
C) $750 billion 
D) $35 billion 
E) There is not enough information to answer this question. 
A) $715 billion 
B) $785 billion 
C) $750 billion 
D) $35 billion 
E) There is not enough information to answer this question.

Question 4

Investment is equal to all purchases of newly produced capital goods

Accepted Answer

A) minus changes in business inventories. 
B) plus fixed investment minus inventory investment. 
C) plus changes in business inventories. 
D) plus changes in business inventories plus purchases of new residential housing. 
A) minus changes in business inventories. 
B) plus fixed investment minus inventory investment. 
C) plus changes in business inventories. 
D) plus changes in business inventories plus purchases of new residential housing.

Question 5

Which of the following is always a characteristic of the contraction phase of the business cycle?

Accepted Answer

A) lower unemployment rates 
B) a decline in Real GDP 
C) higher inflation rates 
D) a decline in GDP 
E) all of the above 
A) lower unemployment rates 
B) a decline in Real GDP 
C) higher inflation rates 
D) a decline in GDP 
E) all of the above

Question 6

Which of the following is a point made by economist Richard Easterlin (for whom the Easterlin Paradox is named) based on his research?

Accepted Answer

A) Rich people tend to be happier than poor people in the same country. 
B) People in richer countries tend to be no happier than people in poorer countries. 
C) People in richer countries tend to be much happier than people in poorer countries. 
D) People in poorer countries tend to be much happier than people in richer countries. 
E) a and b 
A) Rich people tend to be happier than poor people in the same country. 
B) People in richer countries tend to be no happier than people in poorer countries. 
C) People in richer countries tend to be much happier than people in poorer countries. 
D) People in poorer countries tend to be much happier than people in richer countries. 
E) a and b

Question 7

Suppose that net exports are -$140 billion and exports are $240 billion. Imports must be equal to

Accepted Answer

A) $380 billion. 
B) $100 billion. 
C) $200 billion. 
D) -$200 billion. 
E) There is not enough information to answer this question. 
A) $380 billion. 
B) $100 billion. 
C) $200 billion. 
D) -$200 billion. 
E) There is not enough information to answer this question.

Question 8

In 1900, the country with the highest per capita GDP was

Accepted Answer

A) Australia. 
B) New Zealand. 
C) the United States. 
D) Belgium. 
E) the Netherlands. 
A) Australia. 
B) New Zealand. 
C) the United States. 
D) Belgium. 
E) the Netherlands.

Question 9

Real GDP is GDP

Accepted Answer

A) in current-year prices. 
B) in base-year prices. 
C) in GDP-prices. 
D) in that year's prices. 
A) in current-year prices. 
B) in base-year prices. 
C) in GDP-prices. 
D) in that year's prices.

Question 10

In 1820, the country with the highest per capita GDP was

Accepted Answer

A) Australia. 
B) the United States. 
C) Austria. 
D) Germany. 
E) the Netherlands. 
A) Australia. 
B) the United States. 
C) Austria. 
D) Germany. 
E) the Netherlands.

Exam 7: Macroeconomic Measurements Part II Gdp and Real Gdp

Using the expenditures approach, GDP is equal to consumption plus investment, plus government purchases, minus net exports.

Net domestic product (NDP) is the total value of new goods available in the economy after worn out capital goods have been replaced.

Suppose that inventory investment is $20 billion and (total) investment is $680 billion. What does purchases of newly produced capital goods equal?

Investment is equal to all purchases of newly produced capital goods

Which of the following is always a characteristic of the contraction phase of the business cycle?

Which of the following is a point made by economist Richard Easterlin (for whom the Easterlin Paradox is named) based on his research?

Suppose that net exports are -$140 billion and exports are $240 billion. Imports must be equal to

In 1900, the country with the highest per capita GDP was

Real GDP is GDP

In 1820, the country with the highest per capita GDP was

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