Question 1

In a simple circular-flow diagram, total income and total expenditure are

Accepted Answer

A) never equal because total income always exceeds total expenditure. 
B) seldom equal because of the ongoing changes in an economy's unemployment rate. 
C) equal only when the government purchases no goods or services. 
D) always equal because every transaction has a buyer and a seller. 
A) never equal because total income always exceeds total expenditure. 
B) seldom equal because of the ongoing changes in an economy's unemployment rate. 
C) equal only when the government purchases no goods or services. 
D) always equal because every transaction has a buyer and a seller.

Question 2

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

Accepted Answer

A) True 
 B)False

Question 3

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 4

Figure 23-1  
-Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

Accepted Answer

A) Markets for factors of production and markets for goods and services 
B) Firms and households 
C) GDP deflator and CPI 
D) Flow of dollars and flow of inputs and outputs 
A) Markets for factors of production and markets for goods and services 
B) Firms and households 
C) GDP deflator and CPI 
D) Flow of dollars and flow of inputs and outputs

Question 5

If the U.S. government reports that GDP in the third quarter was $16 trillion at an annual rate, then the amount of income and expenditure during quarter three was $4 trillion.

Accepted Answer

A) True 
 B)False

Question 6

Because every transaction has a buyer and a seller,

Accepted Answer

A) GDP is more closely associated with an economy's income than it is with an economy's expenditure. 
B) every transaction contributes equally to an economy's income and to its expenditure. 
C) the number of firms must be equal to the number of households in a simple circular-flow diagram. 
D) firms' profits are necessarily zero in a simple circular-flow diagram. 
A) GDP is more closely associated with an economy's income than it is with an economy's expenditure. 
B) every transaction contributes equally to an economy's income and to its expenditure. 
C) the number of firms must be equal to the number of households in a simple circular-flow diagram. 
D) firms' profits are necessarily zero in a simple circular-flow diagram.

Question 7

Table 23-3
The following table reports nominal and real GDP for the U.S. from 1929 to 1932.
​
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal GDP } \
\text { (Billions of dollars) }
\end{array} & \begin{array} { c } 
\text { Real GDP } \
\text { (Billions of dollars) }
\end{array} \
\hline 1929 & 103.6 & 977 \
\hline 1930 & 91.2 & 892.8 \
\hline 1931 & 76.5 & 834.9 \
\hline 1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 23-3. What are the GDP deflator and the inflation rate for 1931?

Accepted Answer

A) 9.16, ?11.5 
B) 9.16, ?10.3 
C) 1091.37, 10.3 
D) 1091.37, 11.5 
A) 9.16, ?11.5 
B) 9.16, ?10.3 
C) 1091.37, 10.3 
D) 1091.37, 11.5

Question 8

Table 23-2
The following table contains data for country Mindalion for the year 2019.
​
 $$\begin{array} { | l | l | } 
\hline \text { Household purchases of durable goods } & \$ 1,695 \
\hline \text { Household purchases of nondurable goods } & \$ 1,717 \
\hline \text { Household purchases of services } & \$ 400 \
\hline \text { Household purchases of new housing } & \$ 704 \
\hline \text { Purchases of capital equipment } & \$ 310 \
\hline \text { Inventory changes } & \$ 399 \
\hline \text { Purchases of new structures } & \$ 611 \
\hline \text { Depreciati on } & \$ 117 \
\hline \text { Salaries of government workers } & \$ 1,422 \
\hline \text { Government expenditures on public works } & \$ 589 \
\hline \text { Transfer payments } & \$ 777 \
\hline \text { Foreign purchases of domestically produced goods } & \$ 88 \
\hline \text { Domestic purchases of foreign goods } & \$ 140 \
\hline
\end{array}$$
-Refer to Table 23-2. What were country Mindalion's exports in 2019?

Accepted Answer

A) ?$52 
B) $52 
C) $88 
D) $140 
A) ?$52 
B) $52 
C) $88 
D) $140

Question 9

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Accepted Answer

A) True 
 B)False

Question 10

Table 23-6
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
Prices and Quantities
  
-Refer to Table 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work.

Accepted Answer

Nominal GDP was $6x80 + $65x12

Question 11

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.

Exam 23: Measuring a Nations Income

In a simple circular-flow diagram, total income and total expenditure are

The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously.

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Figure 23-1 -Refer to Figure 23-1. Which of the following pairs correctly identify X and Z?

If the U.S. government reports that GDP in the third quarter was $16 trillion at an annual rate, then the amount of income and expenditure during quarter three was $4 trillion.

Because every transaction has a buyer and a seller,

GDP is adjusted to reflect changes in the quality of the environment such as changes in air and water quality.

Table 23-6 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities -Refer to Table 23-6. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work.

Disposable personal income is the income that

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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