Question 1

To evaluate the change in average living standards over time, it is best to use

Accepted Answer

A)  the inflation rate. 
B)  GDP. 
C)  the literacy rate. 
D)  real GDP per capita. 
E)  the employment rate. 
A)  the inflation rate. 
B)  GDP. 
C)  the literacy rate. 
D)  real GDP per capita. 
E)  the employment rate.

Question 2

Bob wins the lottery. This ______included in ______category of gross domestic product GDP).

Accepted Answer

A)  is; the consumption 
B)  is; the investment 
C)  is; the government purchases 
D)  is; the net export 
E)  is not; any 
A)  is; the consumption 
B)  is; the investment 
C)  is; the government purchases 
D)  is; the net export 
E)  is not; any

Question 3

Gross domestic product GDP) is most often measured by the

Accepted Answer

A)  year. 
B)  month. 
C)  week. 
D)  day. 
E)  quarter. 
A)  year. 
B)  month. 
C)  week. 
D)  day. 
E)  quarter.

Question 4

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

Accepted Answer

Nondurable goods are consumed over a sho

Question 5

Consider the following data that identifies real gross domestic product (GDP) in comparison to the long-run trend of real GDP to answer the next  questions:
$\begin{array} { l l l } 
\hline \text { Quarter } & \begin{array} { l } 
\text { Real GDP } \
\text { (billions of dollars) }
\end{array} & \begin{array} { l } 
\text { Long-Run Trend of Real } \
\text { GDP (billions of dollars) }
\end{array} \
\hline 1 & 4,000 & 4,000 \
2 & 4,160 & 4,120 \
3 & 4,326 & 4,244 \
4 & 4,413 & 4,371 \
5 & 4,501 & 4,502 \
6 & 4,591 & 4,637 \
7 & 4,499 & 4,776 \
8 & 4,409 & 4,919 \
9 & 4,673 & 5,067 \
10 & 4,954 & 5,219 \
11 & 5,252 & 5,376 \
12 & 5,376 & 5,537 \
\hline
\end{array}$
-Between quarter 10 and quarter 11, real gross domestic product GDP) grew by what percentage?

Accepted Answer

A)  6 percent 
B)  3 percent 
C)  4 percent 
D)  5 percent 
E)  -5 percent 
A)  6 percent 
B)  3 percent 
C)  4 percent 
D)  5 percent 
E)  -5 percent

Question 6

The consumption category of gross domestic product GDP) includes all purchases of final goods and services by households EXCEPT

Accepted Answer

A)  new appliances. 
B)  new houses. 
C)  landscaping work. 
D)  new cars. 
E)  food. 
A)  new appliances. 
B)  new houses. 
C)  landscaping work. 
D)  new cars. 
E)  food.

Question 7

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

Accepted Answer

A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling. 
A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling.

Question 8

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Accepted Answer

The three categories are business fixed

Question 9

Hollister Co. stocks up on T-shirts for the holiday season. This inventory is included in the ____category of gross domestic product (GDP).

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  net exports 
E)  services 
A)  consumption 
B)  investment 
C)  government purchases 
D)  net exports 
E)  services

Question 10

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the next questions:
$$\begin{array} { l l c l } 
\hline \text { Year } & \text { Nominal GDP } & \text { Real GDP } & \text { GDP Deflator } \
\hline 2009 & & \$ 500 & 100 \
2010 & \$ 551.2 & & 106 \
2011 & \$ 600.6 & \$ 546 & \
2012 & & \$ 600.6 & 120 \
\hline
\end{array}$$
-What was the growth rate of real gross domestic product GDP) from 2011 to 2012?

Accepted Answer

A)  2 percent 
B)  1 percent 
C)  10 percent 
D)  20 percent 
E)  5 percent 
A)  2 percent 
B)  1 percent 
C)  10 percent 
D)  20 percent 
E)  5 percent

Question 11

Suppose a particular model of smartphone contains $150 worth of raw materials and requires $175 worth of labor to produce. One day, one of these phones sells for $400. The seller would have been willing to sell it for as little as $375, whereas the buyer would have been willing to pay as much as $425. Which dollar amount would be used to calculate this transaction's contribution to gross domestic product GDP)?

Accepted Answer

A)  $150 
B)  $175 
C)  $375 
D)  $400 
E)  $425 
A)  $150 
B)  $175 
C)  $375 
D)  $400 
E)  $425

Question 12

Which is the largest component of U.S. gross domestic product GDP)?

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  exports 
E)  imports 
A)  consumption 
B)  investment 
C)  government purchases 
D)  exports 
E)  imports

Question 13

Gross domestic product GDP) is an important indicator because it is used as a measure of all of the following EXCEPT

Accepted Answer

A)  economic growth. 
B)  average living standards. 
C)  business-cycle fluctuations. 
D)  average income levels. 
E)  environmental quality. 
A)  economic growth. 
B)  average living standards. 
C)  business-cycle fluctuations. 
D)  average income levels. 
E)  environmental quality.

Question 14

Consider the following figure to answer the next  questions:
 
-During which period was the economy in an expansion?

Accepted Answer

A)  2005-2009 
B)  2000-2004 
C)  2009-2013 
D)  2004-2008 
E)  2000-2012 
A)  2005-2009 
B)  2000-2004 
C)  2009-2013 
D)  2004-2008 
E)  2000-2012

Question 15

Consider the following data that gives the quantity produced and unit price for three different goodsacross two different years to answer the next  questions. Assume that the base year is 2012
$$\begin{array} { l l c l l } 
\hline \text { Good } & \text { 2012 Price } & \text { 2012 Quantity } & \text { 2013 Price } & \text { 2013 Quantity } \
\hline \text { A } & \$ 2.00 & 500 & \$ 2.50 & 600 \
\text { B } & \$ 4.00 & 1,000 & \$ 5.00 & 900 \
\text { C } & \$ 2.00 & 200 & \$ 1.00 & 300 \
\hline
\end{array}$$

-What was the rate of inflation between the two years?

Accepted Answer

A)  19.44 percent 
B)  8.57 percent 
C)  6.67 percent 
D)  2.38 percent 
E)  16.67 percent 
A)  19.44 percent 
B)  8.57 percent 
C)  6.67 percent 
D)  2.38 percent 
E)  16.67 percent

Question 16

To determine a value for gross domestic product GDP), you would add up the

Accepted Answer

A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced. 
A)  quantities of the final goods and services produced. 
B)  dollar value of the final goods and services produced. 
C)  dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  dollar value of all goods and services produced. 
E)  quantities of all goods and services produced.

Question 17

Bob sells his car to Stan's Used Car Lot for $5,000. Stan's Used Car Lot sells the car to Bill for $5,500. This transaction contributes ______to gross domestic product GDP).

Accepted Answer

A)  nothing 
B)  $500 
C)  $5,500 
D)  $5,000 
E)  $10,500 
A)  nothing 
B)  $500 
C)  $5,500 
D)  $5,000 
E)  $10,500

Question 18

The expansion phase of a business cycle is best described as the time

Accepted Answer

A)  elapsed from a trough to a peak. 
B)  elapsed from a peak to a trough. 
C)  elapsed from a peak to a peak. 
D)  elapsed from a trough to a trough. 
E)  spent producing above the long-run trend of GDP. 
A)  elapsed from a trough to a peak. 
B)  elapsed from a peak to a trough. 
C)  elapsed from a peak to a peak. 
D)  elapsed from a trough to a trough. 
E)  spent producing above the long-run trend of GDP.

Question 19

Explain the significance of the equation GDP = C + I + G + NX.

Accepted Answer

The equation describes how to calculate

Question 20

Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the next questions:
$$\begin{array} { l l c l } 
\hline \text { Year } & \text { Nominal GDP } & \text { Real GDP } & \text { GDP Deflator } \
\hline 2009 & & \$ 500 & 100 \
2010 & \$ 551.2 & & 106 \
2011 & \$ 600.6 & \$ 546 & \
2012 & & \$ 600.6 & 120 \
\hline
\end{array}$$
-What is the value of real gross domestic product GDP) in 2010? Round to the nearest second decimal.

Accepted Answer

A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million 
A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million

To evaluate the change in average living standards over time, it is best to use

Bob wins the lottery. This included in category of gross domestic product GDP).

Gross domestic product GDP) is most often measured by the

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

The consumption category of gross domestic product GDP) includes all purchases of final goods and services by households EXCEPT

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Hollister Co. stocks up on T-shirts for the holiday season. This inventory is included in the ____category of gross domestic product (GDP).

Which is the largest component of U.S. gross domestic product GDP)?

Gross domestic product GDP) is an important indicator because it is used as a measure of all of the following EXCEPT

Consider the following figure to answer the next questions: -During which period was the economy in an expansion?

To determine a value for gross domestic product GDP), you would add up the

Bob sells his car to Stan's Used Car Lot for $5,000. Stan's Used Car Lot sells the car to Bill for $5,500. This transaction contributes ______to gross domestic product GDP).

The expansion phase of a business cycle is best described as the time

Explain the significance of the equation GDP = C + I + G + NX.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand Y

Market Outcomes and Tax Incidence

Price Controls

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

Recessions, Expansions, and the Debate Over How to Manage Them

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Exam 6: Introduction to Macroeconomics and Gross Domestic Product

To evaluate the change in average living standards over time, it is best to use

Bob wins the lottery. This ______included in ______category of gross domestic product GDP).

Gross domestic product GDP) is most often measured by the

The consumption component of gross domestic product GDP) consists of both goods and services. The goods, in turn, can be broken down into durable and nondurable goods. Briefly explain what is included in each category, and why the distinction is significant.

The consumption category of gross domestic product GDP) includes all purchases of final goods and services by households EXCEPT

If nominal gross domestic product GDP) is declining but production is rising, then it must be the case that

The investment component of gross domestic product GDP) can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Hollister Co. stocks up on T-shirts for the holiday season. This inventory is included in the ____category of gross domestic product (GDP).

Which is the largest component of U.S. gross domestic product GDP)?

Gross domestic product GDP) is an important indicator because it is used as a measure of all of the following EXCEPT

Consider the following figure to answer the next questions: -During which period was the economy in an expansion?

To determine a value for gross domestic product GDP), you would add up the

Bob sells his car to Stan's Used Car Lot for $5,000. Stan's Used Car Lot sells the car to Bill for $5,500. This transaction contributes ______to gross domestic product GDP).

The expansion phase of a business cycle is best described as the time

Explain the significance of the equation GDP = C + I + G + NX.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand Y

Market Outcomes and Tax Incidence

Price Controls

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

Recessions, Expansions, and the Debate Over How to Manage Them

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Bob wins the lottery. This included in category of gross domestic product GDP).