Question 1

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

Accepted Answer

A) excludes the value of goods and services exported aboard. 
B) includes the value of government transfer payments. 
C) measures changes in the quantity of goods and services produced by holding prices constant. 
D) adjusts the value of goods and services produced for changes in the foreign exchange rate. 
A) excludes the value of goods and services exported aboard. 
B) includes the value of government transfer payments. 
C) measures changes in the quantity of goods and services produced by holding prices constant. 
D) adjusts the value of goods and services produced for changes in the foreign exchange rate.

Question 2

The economic statistic used to measure the level of prices is:

Accepted Answer

A) GDP. 
B) CPI. 
C) GNP. 
D) real GDP. 
A) GDP. 
B) CPI. 
C) GNP. 
D) real GDP.

Question 3

Assume that a tire company sells 4 tires to an automobile company for $400, another company sells a compact disc player for $500, and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount from these transactions that should be counted in GDP is:

Accepted Answer

A) $20,000. 
B) $20,000 less the automobile company's profit on the car. 
C) $20,900. 
D) $20,900 less the profits of all three companies on the items that they sold. 
A) $20,000. 
B) $20,000 less the automobile company's profit on the car. 
C) $20,900. 
D) $20,900 less the profits of all three companies on the items that they sold.

Question 4

Prices of items included in the CPI are:

Accepted Answer

A) averaged with the price of every item weighted equally. 
B) weighted according to amount of the item produced in GDP. 
C) weighted according to quantity of the item purchased by the typical household. 
D) chained to the base year by the year-to-year growth rate of the item. 
A) averaged with the price of every item weighted equally. 
B) weighted according to amount of the item produced in GDP. 
C) weighted according to quantity of the item purchased by the typical household. 
D) chained to the base year by the year-to-year growth rate of the item.

Question 5

Unlike the GDP deflator, the CPI includes the prices of:

Accepted Answer

A) goods purchased by firms. 
B) goods purchased by governments. 
C) exported goods. 
D) imported goods. 
A) goods purchased by firms. 
B) goods purchased by governments. 
C) exported goods. 
D) imported goods.

Question 6

The GDP deflator is a:

Accepted Answer

A) Laspeyres price index. 
B) Paasche price index. 
C) Laspeyres quantity index. 
D) Paasche quantity index. 
A) Laspeyres price index. 
B) Paasche price index. 
C) Laspeyres quantity index. 
D) Paasche quantity index.

Question 7

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

Accepted Answer

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

Question 8

If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent, then real GDP by percent.

Accepted Answer

A) increased ; 2 
B) decreased; 2 
C) increased; 8 
D) decreased; 8 
A) increased ; 2 
B) decreased; 2 
C) increased; 8 
D) decreased; 8

Question 9

In 2009, total government purchases per person (in current dollars) in the United States amounted to approximately:

Accepted Answer

A) $1,000. 
B) $9,500. 
C) $13,500. 
D) $25,600. 
A) $1,000. 
B) $9,500. 
C) $13,500. 
D) $25,600.

Question 10

In the national income accounts, net exports equal:

Accepted Answer

A) exported goods minus imported goods. 
B) exported goods and services minus imported goods and services. 
C) exported goods minus imported services. 
D) exported goods and services plus imported goods and services. 
A) exported goods minus imported goods. 
B) exported goods and services minus imported goods and services. 
C) exported goods minus imported services. 
D) exported goods and services plus imported goods and services.

Question 11

The panel of economists appointed by the Senate Finance Committee estimates that the CPI inflation by approximately percentage point(s) per year.

Accepted Answer

A) overestimates; 1 
B) overestimates; 10 
C) underestimates; 1 
D) underestimates; 10 
A) overestimates; 1 
B) overestimates; 10 
C) underestimates; 1 
D) underestimates; 10

Question 12

An estimate of total employment in the economy can be obtained from:

Accepted Answer

A) both the household and establishment surveys. 
B) from the household survey, but not from the establishment survey. 
C) from the establishment survey, but not from the household survey. 
D) from neither the household nor the establishment surveys. 
A) both the household and establishment surveys. 
B) from the household survey, but not from the establishment survey. 
C) from the establishment survey, but not from the household survey. 
D) from neither the household nor the establishment surveys.

Question 13

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

Accepted Answer

A) $5. 
B) $6.50. 
C) $9.50. 
D) $11. 
A) $5. 
B) $6.50. 
C) $9.50. 
D) $11.

Question 14

Assume that the adult population of the United States is 191.6 million, total employment is 117.6 million, and 9.4 million are unemployed. Then the unemployment rate, as normally computed, is approximately percent.

Accepted Answer

A) 4.9 
B) 7.4 
C) 7.9 
D) 9.4 
A) 4.9 
B) 7.4 
C) 7.9 
D) 9.4

Question 15

The statistic used by economists to measure the value of economic output is:

Accepted Answer

A) the CPI. 
B) GDP. 
C) the GDP deflator. 
D) the unemployment rate. 
A) the CPI. 
B) GDP. 
C) the GDP deflator. 
D) the unemployment rate.

Question 16

Into which of the three categories-employed, unemployed, out of the labor force-would an interviewer for the
Current Population Survey place each of the following people? Explain. a. Jennifer Temple is working as a second grade school teacher.
b. Frank Peabody is attending college full-time to earn a degree in elementary education.
c. Martin Hampton is working as a high school social science teacher but is at home sick with the flu.
d. Kyle Brown does not currently have a job. He wants to be an elementary school teacher. He has the appropriate degree. He has not looked for a position in the last month because he doesn't believe schools are
currently hiring.
e. Brenda Dewey does not currently have a job. She has sent her resume to several school districts in the past week in hope of finding a teaching position.

Accepted Answer

a. employed
b. out o

Question 17

It is a national income accounting rule that all expenditure on purchases of products is necessarily equal to:

Accepted Answer

A) profits of firms. 
B) wages of employees. 
C) income of the producers of the products. 
D) income of employees. 
A) profits of firms. 
B) wages of employees. 
C) income of the producers of the products. 
D) income of employees.

Question 18

All of the following are measures of GDP except the total:

Accepted Answer

A) expenditures of all businesses in the economy. 
B) income from all production in the economy. 
C) expenditures on all final goods produced. 
D) value of all final production. 
A) expenditures of all businesses in the economy. 
B) income from all production in the economy. 
C) expenditures on all final goods produced. 
D) value of all final production.

Question 19

If GDP (measured in billions of current dollars) is $5,465 and the sum of consumption, investment, and government purchases is $5,496, while exports equal $673, imports are:

Accepted Answer

A) $673. 
B) -$673. 
C) $704. 
D) -$704. 
A) $673. 
B) -$673. 
C) $704. 
D) -$704.

Question 20

When bread is baked but put away for later sale, this is called:

Accepted Answer

A) waste. 
B) saving. 
C) fixed investment. 
D) investment in inventory. 
A) waste. 
B) saving. 
C) fixed investment. 
D) investment in inventory.

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

The economic statistic used to measure the level of prices is:

Prices of items included in the CPI are:

Unlike the GDP deflator, the CPI includes the prices of:

The GDP deflator is a:

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent, then real GDP by percent.

In 2009, total government purchases per person (in current dollars) in the United States amounted to approximately:

In the national income accounts, net exports equal:

The panel of economists appointed by the Senate Finance Committee estimates that the CPI inflation by approximately percentage point(s) per year.

An estimate of total employment in the economy can be obtained from:

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

Assume that the adult population of the United States is 191.6 million, total employment is 117.6 million, and 9.4 million are unemployed. Then the unemployment rate, as normally computed, is approximately percent.

The statistic used by economists to measure the value of economic output is:

It is a national income accounting rule that all expenditure on purchases of products is necessarily equal to:

All of the following are measures of GDP except the total:

If GDP (measured in billions of current dollars) is $5,465 and the sum of consumption, investment, and government purchases is $5,496, while exports equal $673, imports are:

When bread is baked but put away for later sale, this is called:

The Science of Macroeconomics

National Income: Where It Comes From and Where It Goes

Money and Inflation

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Stabilization Policy

Government Debt and Budget Deficits

Introduction to the Financial System

Asset Prices and Interest Rates

Securities Markets

Banking

Financial Crises

Filters

Exam 2: The Data of Macroeconomics

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

The economic statistic used to measure the level of prices is:

Prices of items included in the CPI are:

Unlike the GDP deflator, the CPI includes the prices of:

The GDP deflator is a:

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent, then real GDP by percent.

In 2009, total government purchases per person (in current dollars) in the United States amounted to approximately:

In the national income accounts, net exports equal:

The panel of economists appointed by the Senate Finance Committee estimates that the CPI inflation by approximately percentage point(s) per year.

An estimate of total employment in the economy can be obtained from:

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

Assume that the adult population of the United States is 191.6 million, total employment is 117.6 million, and 9.4 million are unemployed. Then the unemployment rate, as normally computed, is approximately percent.

The statistic used by economists to measure the value of economic output is:

It is a national income accounting rule that all expenditure on purchases of products is necessarily equal to:

All of the following are measures of GDP except the total:

If GDP (measured in billions of current dollars) is $5,465 and the sum of consumption, investment, and government purchases is $5,496, while exports equal $673, imports are:

When bread is baked but put away for later sale, this is called:

The Science of Macroeconomics

National Income: Where It Comes From and Where It Goes

Money and Inflation

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Stabilization Policy

Government Debt and Budget Deficits

Introduction to the Financial System

Asset Prices and Interest Rates

Securities Markets

Banking

Financial Crises

Filters