Question 1

Real GDP is measured in dollars time.

Accepted Answer

A) current; at a point in 
B) current; per unit of 
C) constant; at a point in 
D) constant; per unit of 
A) current; at a point in 
B) current; per unit of 
C) constant; at a point in 
D) constant; per unit of

Question 2

GDP is the market value of all goods and services produced within an economy in a given period of time.

Accepted Answer

A) used 
B) intermediate 
C) consumer 
D) final 
A) used 
B) intermediate 
C) consumer 
D) final

Question 3

Nominal GDP means the value of goods and services is measured in prices.

Accepted Answer

A) current 
B) real 
C) constant 
D) average 
A) current 
B) real 
C) constant 
D) average

Question 4

Since GDP includes only the additions to income, not transfers of assets, are not included in the computation of GDP.

Accepted Answer

A) final goods used 
B) goods consumption 
C) goods 
D) goods produced for inventory 
A) final goods used 
B) goods consumption 
C) goods 
D) goods produced for inventory

Question 5

In the national income accounts, consumption expenditures include all of the following except household purchases of:

Accepted Answer

A) durable goods. 
B) nondurable goods. 
C) new residential housing. 
D) services. 
A) durable goods. 
B) nondurable goods. 
C) new residential housing. 
D) services.

Question 6

There are a number of measures of aggregate economic activity, such as GDP, GNP, national income, personal income, and disposable personal income. Each of these measures can be a good indicator depending on the issue under consideration. For each of the following issues, give your reasons for selecting one of the measures just mentioned as the best indicator to use in studying the issue:
a. the proportion of income households save;
b. the relative share of earnings going to labor versus capital;
c. the total output of new final goods and services.

Accepted Answer

a. Disposable personal income provides a

Question 7

In principle, the GDP accounts should-but do not-have an imputation for:

Accepted Answer

A) housing services enjoyed by homeowners. 
B) rental services of automobiles driven by owners. 
C) meals cooked in restaurants. 
D) housing services enjoyed by renters. 
A) housing services enjoyed by homeowners. 
B) rental services of automobiles driven by owners. 
C) meals cooked in restaurants. 
D) housing services enjoyed by renters.

Question 8

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Accepted Answer

Some possible, but not all, explanations

Question 9

An increase in the price of goods bought by firms and the government will show up in:

Accepted Answer

A) the CPI but not in the GDP deflator. 
B) the GDP deflator but not in the CPI. 
C) both the CPI and the GDP deflator. 
D) neither the CPI nor the GDP deflator. 
A) the CPI but not in the GDP deflator. 
B) the GDP deflator but not in the CPI. 
C) both the CPI and the GDP deflator. 
D) neither the CPI nor the GDP deflator.

Question 10

Economic statistics are not perfect. Explain at least one way in which each of the following statistics as currently calculated in the United States fails to completely or accurately measure the corresponding economic concept (in parentheses):
a. real GDP per person (economic well-being);
b. CPI (cost of living);
c. unemployment rate (involuntary unemployment).

Accepted Answer

a. The official measure of GDP does not

Question 11

Nominal GDP is measured in ____ dollars ____ time.

Accepted Answer

A) current; at a point in 
B) constant; at a point in 
C) current; per unit of 
D) constant; per unit of 
A) current; at a point in 
B) constant; at a point in 
C) current; per unit of 
D) constant; per unit of

Question 12

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

Accepted Answer

A) book printed in 2009, entitled The Year 3000. 
B) 2001 Jeep Cherokee. 
C) year 2010 calendar printed in 2009. 
D) ticket to see the movie "2001." 
A) book printed in 2009, entitled The Year 3000. 
B) 2001 Jeep Cherokee. 
C) year 2010 calendar printed in 2009. 
D) ticket to see the movie "2001."

Question 13

Which of the following is a flow variable?

Accepted Answer

A) wealth 
B) the number unemployed 
C) government debt 
D) income 
A) wealth 
B) the number unemployed 
C) government debt 
D) income

Question 14

Assume that total output consists of 4 apples and 6 oranges and that apples cost $1 each and oranges cost $0.50 each. In this case, the value of GDP is:

Accepted Answer

A) 10 pieces of fruit. 
B) $7. 
C) $8. 
D) $10. 
A) 10 pieces of fruit. 
B) $7. 
C) $8. 
D) $10.

Question 15

There are a number of statistics computed to measure the price level, such as the GDP deflator and the CPI. The choice of which of these measures to use depends in many cases on the specific question in which you are interested. For each of the following situations, state whether the CPI or GDP deflator is a more appropriate measure to use and explain why the statistic is preferred.
a. You are interested in looking at the impact of higher prices of imported oil in the overall cost of living.
b. The government is interested in whether increases in defense spending are affecting the price level.
c. An economic consulting firm is investigating the impact on the aggregate price level of more computers and electronic technology used in production.

Accepted Answer

a. The CPI is the more appropriate stati

Question 16

In 2009, the approximate percentage of GDP in the United States that was spent on consumption was approximately:

Accepted Answer

A) 67 percent. 
B) 50 percent. 
C) 31 percent. 
D) 16 percent. 
A) 67 percent. 
B) 50 percent. 
C) 31 percent. 
D) 16 percent.

Question 17

The labor force equals the:

Accepted Answer

A) adult population. 
B) number of employed individuals. 
C) number of unemployed individuals. 
D) number of employed and unemployed individuals. 
A) adult population. 
B) number of employed individuals. 
C) number of unemployed individuals. 
D) number of employed and unemployed individuals.

Question 18

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

Accepted Answer

A) $10,000. 
B) $12,000. 
C) $20,000. 
D) $22,000. 
A) $10,000. 
B) $12,000. 
C) $20,000. 
D) $22,000.

Question 19

In 2009, GDP per person in the United States was approximately:

Accepted Answer

A) $6,000. 
B) $26,000. 
C) $46,000. 
D) $76,000. 
A) $6,000. 
B) $26,000. 
C) $46,000. 
D) $76,000.

Question 20

$$\begin{array} { l l l } 
& 2009 & 2010 \
\text { Nominal GDP } ( \$ \text { billions } ) & \$ 14,700 & \$ 15,200 \
\text { Real GDP } ( \$ \text { billions } 2000 \text { chain weighted) } & \$ 12,100 & \$ 11,900
\end{array}$$
Based on the data in the table above, explain what happened to output and prices in the economy between
2009 and 2010.

Accepted Answer

Real GDP decreased indicating that the p

Real GDP is measured in dollars time.

GDP is the market value of all goods and services produced within an economy in a given period of time.

Nominal GDP means the value of goods and services is measured in prices.

Since GDP includes only the additions to income, not transfers of assets, are not included in the computation of GDP.

In the national income accounts, consumption expenditures include all of the following except household purchases of:

In principle, the GDP accounts should-but do not-have an imputation for:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

An increase in the price of goods bought by firms and the government will show up in:

Nominal GDP is measured in dollars time.

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

Which of the following is a flow variable?

Assume that total output consists of 4 apples and 6 oranges and that apples cost $1 each and oranges cost $0.50 each. In this case, the value of GDP is:

In 2009, the approximate percentage of GDP in the United States that was spent on consumption was approximately:

The labor force equals the:

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

In 2009, GDP per person in the United States was approximately:

2009 2010 Nominal GDP (\ billions ) \ 14,700 \ 15,200 Real GDP (\ billions 2000 chain weighted) \ 12,100 \ 11,900 Based on the data in the table above, explain what happened to output and prices in the economy between 2009 and 2010.

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 measured in dollars time.

GDP is the market value of all goods and services produced within an economy in a given period of time.

Nominal GDP means the value of goods and services is measured in prices.

Since GDP includes only the additions to income, not transfers of assets, are not included in the computation of GDP.

In the national income accounts, consumption expenditures include all of the following except household purchases of:

In principle, the GDP accounts should-but do not-have an imputation for:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

An increase in the price of goods bought by firms and the government will show up in:

Nominal GDP is measured in ____ dollars ____ time.

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

Which of the following is a flow variable?

Assume that total output consists of 4 apples and 6 oranges and that apples cost $1 each and oranges cost $0.50 each. In this case, the value of GDP is:

In 2009, the approximate percentage of GDP in the United States that was spent on consumption was approximately:

The labor force equals the:

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

In 2009, GDP per person in the United States was approximately:

2009 2010 Nominal GDP (\ billions ) \ 14,700 \ 15,200 Real GDP (\ billions 2000 chain weighted) \ 12,100 \ 11,900 Based on the data in the table above, explain what happened to output and prices in the economy between 2009 and 2010.

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

Nominal GDP is measured in dollars time.