Question 1

If the prices of goods begin to rise rapidly, people may find it difficult to maintain their lifestyles. Explain why.

Accepted Answer

The prices they pay for goods

Question 2

Which of the following is NOT a component of value added of a firm?

Accepted Answer

A)  expenditures on intermediate goods 
B)  profits 
C)  wages 
D)  interest 
A)  expenditures on intermediate goods 
B)  profits 
C)  wages 
D)  interest

Question 3

Bananas, chocolate bars, chewing gum, orange juice and yogurt are considered to be ________ goods.

Accepted Answer

A)  durable 
B)  nondurable 
C)  essential 
D)  service 
A)  durable 
B)  nondurable 
C)  essential 
D)  service

Question 4

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is ten percent per year. How fast did the economy grow between these two years?

Accepted Answer

A)  10 percent 
B)  12 percent 
C)  21 percent 
D)  42 percent 
A)  10 percent 
B)  12 percent 
C)  21 percent 
D)  42 percent

Question 5

Between 2009 and 2012, a country's nominal GDP grew by 18 percent and its inflation rate (based on the chain-weighted price index for GDP)was 11 percent. How fast did real GDP grow over this period?

Accepted Answer

The growth rate for real GDP w

Question 6

The majority of spending in the category of government purchases comes from

Accepted Answer

A)  the federal government. 
B)  state and local governments. 
C)  transfer payments. 
D)  military spending. 
A)  the federal government. 
B)  state and local governments. 
C)  transfer payments. 
D)  military spending.

Question 7

Recall the Application about the link between happiness and GDP to answer the following question(s). Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender.
-Not including transactions from the underground economy will tend to ________ GDP, and not including environmental changes caused by pollution will tend to ________ GDP.

Accepted Answer

A)  overvalue; undervalue 
B)  undervalue; overvalue 
C)  overvalue; overvalue 
D)  undervalue; undervalue 
A)  overvalue; undervalue 
B)  undervalue; overvalue 
C)  overvalue; overvalue 
D)  undervalue; undervalue

Question 8

The common term for a severe recession is a

Accepted Answer

A)  downturn. 
B)  depression. 
C)  bottoming out. 
D)  economic adjustment. 
A)  downturn. 
B)  depression. 
C)  bottoming out. 
D)  economic adjustment.

Question 9

Which of the following is NOT a macroeconomic statement?

Accepted Answer

A)  Aggregate worker productivity decreased by three percent in 2012. 
B)  The price of cell phones decreased by 18 percent last year. 
C)  Gross domestic product in Peru increased 4 percent from 2011 to 2012. 
D)  The U.S. inflation rate was two percent in 2012. 
A)  Aggregate worker productivity decreased by three percent in 2012. 
B)  The price of cell phones decreased by 18 percent last year. 
C)  Gross domestic product in Peru increased 4 percent from 2011 to 2012. 
D)  The U.S. inflation rate was two percent in 2012.

Question 10

If an economy produced 220 pounds of jelly beans at $5 per pound and 90 pounds of gum drops at $2 per pound in 2012, its real gross domestic product (GDP)was

Accepted Answer

A)  310 pounds of candy. 
B)  $180. 
C)  $1,100. 
D)  $1,280. 
A)  310 pounds of candy. 
B)  $180. 
C)  $1,100. 
D)  $1,280.

Question 11

Describe the recession phase of a business cycle, including when it begins and when it ends.

Accepted Answer

Business cycles describe time periods of

Question 12

Gross domestic product calculations count only final goods and services because

Accepted Answer

A)  these are the only goods and services that are purchased in an economy. 
B)  counting all goods and services would lead to double-counting of many activities. 
C)  it is difficult to measure the prices of intermediate goods produced. 
D)  one cannot calculate the quantities of intermediate goods produced. 
A)  these are the only goods and services that are purchased in an economy. 
B)  counting all goods and services would lead to double-counting of many activities. 
C)  it is difficult to measure the prices of intermediate goods produced. 
D)  one cannot calculate the quantities of intermediate goods produced.

Question 13

What type of spending is the largest component of the GDP?

Accepted Answer

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

Question 14

A trade surplus occurs when a country's exports exceed that country's imports.

Accepted Answer

A) True 
 B)False

Question 15

If real GDP was 100 in 2011 and 104.4 in 2012, the growth rate of real GDP between 2011 and 2012 was

Accepted Answer

A)  2.2 percent. 
B)  4.4 percent. 
C)  100 percent. 
D)  102.2 percent. 
A)  2.2 percent. 
B)  4.4 percent. 
C)  100 percent. 
D)  102.2 percent.

Question 16

The "expansion" of an economy occurs after

Accepted Answer

A)  firms produce more goods. 
B)  people spend more money. 
C)  a trough. 
D)  an inflationary period. 
A)  firms produce more goods. 
B)  people spend more money. 
C)  a trough. 
D)  an inflationary period.

Question 17

Business cycles are

Accepted Answer

A)  movements in stock prices. 
B)  the transfer of executives between firms. 
C)  used to describe fluctuations in GDP. 
D)  a description of the time required to bring a new product to market. 
A)  movements in stock prices. 
B)  the transfer of executives between firms. 
C)  used to describe fluctuations in GDP. 
D)  a description of the time required to bring a new product to market.

Question 18

Recall the Application about the link between happiness and GDP to answer the following question(s). Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender.
-GDP calculations tend to exclude all of the following EXCEPT

Accepted Answer

A)  illegal transactions. 
B)  environmental quality. 
C)  work that people do for themselves in their own homes. 
D)  salaries paid to government employees. 
A)  illegal transactions. 
B)  environmental quality. 
C)  work that people do for themselves in their own homes. 
D)  salaries paid to government employees.

Question 19

The amount of income that households keep after paying taxes is

Accepted Answer

A)  national income. 
B)  personal income. 
C)  personal disposable income. 
D)  value added income. 
A)  national income. 
B)  personal income. 
C)  personal disposable income. 
D)  value added income.

Question 20

Nominal GDP is measured by calculating real GDP at constant prices.

Accepted Answer

A) True 
 B)False

If the prices of goods begin to rise rapidly, people may find it difficult to maintain their lifestyles. Explain why.

Which of the following is NOT a component of value added of a firm?

Bananas, chocolate bars, chewing gum, orange juice and yogurt are considered to be ________ goods.

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is ten percent per year. How fast did the economy grow between these two years?

Between 2009 and 2012, a country's nominal GDP grew by 18 percent and its inflation rate (based on the chain-weighted price index for GDP)was 11 percent. How fast did real GDP grow over this period?

The majority of spending in the category of government purchases comes from

The common term for a severe recession is a

Which of the following is NOT a macroeconomic statement?

If an economy produced 220 pounds of jelly beans at $5 per pound and 90 pounds of gum drops at $2 per pound in 2012, its real gross domestic product (GDP)was

Describe the recession phase of a business cycle, including when it begins and when it ends.

Gross domestic product calculations count only final goods and services because

What type of spending is the largest component of the GDP?

A trade surplus occurs when a country's exports exceed that country's imports.

If real GDP was 100 in 2011 and 104.4 in 2012, the growth rate of real GDP between 2011 and 2012 was

The "expansion" of an economy occurs after

Business cycles are

The amount of income that households keep after paying taxes is

Nominal GDP is measured by calculating real GDP at constant prices.

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters

Exam 5: Measuring a Nation's Production and Income

If the prices of goods begin to rise rapidly, people may find it difficult to maintain their lifestyles. Explain why.

Which of the following is NOT a component of value added of a firm?

Bananas, chocolate bars, chewing gum, orange juice and yogurt are considered to be ________ goods.

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is ten percent per year. How fast did the economy grow between these two years?

Between 2009 and 2012, a country's nominal GDP grew by 18 percent and its inflation rate (based on the chain-weighted price index for GDP)was 11 percent. How fast did real GDP grow over this period?

The majority of spending in the category of government purchases comes from

The common term for a severe recession is a

Which of the following is NOT a macroeconomic statement?

If an economy produced 220 pounds of jelly beans at $5 per pound and 90 pounds of gum drops at $2 per pound in 2012, its real gross domestic product (GDP)was

Describe the recession phase of a business cycle, including when it begins and when it ends.

Gross domestic product calculations count only final goods and services because

What type of spending is the largest component of the GDP?

A trade surplus occurs when a country's exports exceed that country's imports.

If real GDP was 100 in 2011 and 104.4 in 2012, the growth rate of real GDP between 2011 and 2012 was

The "expansion" of an economy occurs after

Business cycles are

The amount of income that households keep after paying taxes is

Nominal GDP is measured by calculating real GDP at constant prices.

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters