Question 1

Gross domestic product (GDP) will increase if illegal drugs are made legal.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of a final good or service?

Accepted Answer

A)  Bricks purchased by a company for constructing houses 
B)  Wheat purchased by a bakery 
C)  Steel purchased by a company for manufacturing cars 
D)  A cup of coffee bought at a restaurant 
E)  A used car bought by a person 
A)  Bricks purchased by a company for constructing houses 
B)  Wheat purchased by a bakery 
C)  Steel purchased by a company for manufacturing cars 
D)  A cup of coffee bought at a restaurant 
E)  A used car bought by a person

Question 3

If the value of exports equals $6.5 billion and the value of imports equals $8.0 billion in a year, then:

Accepted Answer

A)  together imports and exports add $1.5 billion to the gross domestic product (GDP). 
B)  together exports and imports add $6.5 billion to the gross domestic product (GDP). 
C)  together exports and imports reduce the gross domestic product (GDP) by 1.5 billion. 
D)  together exports and imports add nothing to the gross domestic product (GDP). 
A)  together imports and exports add $1.5 billion to the gross domestic product (GDP). 
B)  together exports and imports add $6.5 billion to the gross domestic product (GDP). 
C)  together exports and imports reduce the gross domestic product (GDP) by 1.5 billion. 
D)  together exports and imports add nothing to the gross domestic product (GDP).

Question 4

A shortcoming of national income accounting is that it ignores:

Accepted Answer

A)  the depreciation of manufactured capital. 
B)  spending by poor households who are receiving government transfer payments. 
C)  spending on intermediate goods. 
D)  the depletion of natural resources. 
E)  U.S. products that are sold overseas. 
A)  the depreciation of manufactured capital. 
B)  spending by poor households who are receiving government transfer payments. 
C)  spending on intermediate goods. 
D)  the depletion of natural resources. 
E)  U.S. products that are sold overseas.

Question 5

Which of the following is likely to be excluded from the gross domestic product (GDP) of a country?

Accepted Answer

A)  The value of the drugs being sold in a vacant lot 
B)  The value of the drugs being sold in a pharmacy 
C)  A doctor treating a patient in a hospital 
D)  The value of a new house bought by an individual 
E)  The value of new furnitures bought by an individual 
A)  The value of the drugs being sold in a vacant lot 
B)  The value of the drugs being sold in a pharmacy 
C)  A doctor treating a patient in a hospital 
D)  The value of a new house bought by an individual 
E)  The value of new furnitures bought by an individual

Question 6

Suppose the real gross domestic product (GDP) equals $200 billion this year and the nominal gross domestic product (GDP) equals $300 billion. This implies that the price level has increased by _____.

Accepted Answer

A)  $100 billion 
B)  $200 billion 
C)  50 percent 
D)  100 percent 
E)  33 percent 
A)  $100 billion 
B)  $200 billion 
C)  50 percent 
D)  100 percent 
E)  33 percent

Question 7

The table below shows the real gross domestic product (GDP), consumption, planned investment, and government purchases for an economy. The aggregate expenditure in equilibrium is _____.

Accepted Answer

A)  $1,800 
B)  $1,900 
C)  $2,000 
D)  $2,200 
E)  $2,300 
A)  $1,800 
B)  $1,900 
C)  $2,000 
D)  $2,200 
E)  $2,300

Question 8

The Consumer Price Index (CPI) is a measure of the:

Accepted Answer

A)  cost of a market basket of consumer goods and services relative to its cost in a base year. 
B)  change in the average price of a market basket of necessary goods and services. 
C)  cost of a market basket of consumer goods relative to the previous year. 
D)  change in the average price of all intermediate goods and services. 
E)  average price of all final goods and services relative to the average price in the previous year. 
A)  cost of a market basket of consumer goods and services relative to its cost in a base year. 
B)  change in the average price of a market basket of necessary goods and services. 
C)  cost of a market basket of consumer goods relative to the previous year. 
D)  change in the average price of all intermediate goods and services. 
E)  average price of all final goods and services relative to the average price in the previous year.

Question 9

The value added by a firm is defined as:

Accepted Answer

A)  the sum of all income earned by the workers in the firm. 
B)  the firm's actual investment minus planned investment. 
C)  the value of the product manufactured by the firm plus the transaction costs incurred by the firm. 
D)  the value of the firm's product minus the cost of materials it bought from other firms. 
E)  the increase in the value of the firm's stock or bond. 
A)  the sum of all income earned by the workers in the firm. 
B)  the firm's actual investment minus planned investment. 
C)  the value of the product manufactured by the firm plus the transaction costs incurred by the firm. 
D)  the value of the firm's product minus the cost of materials it bought from other firms. 
E)  the increase in the value of the firm's stock or bond.

Question 10

A chain-weighted index recognizes the fact that the composition of output changes over time.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following actions would increase the consumption spending component of the gross domestic product (GDP) ?

Accepted Answer

A)  Ann cooking dinner for Tim instead of going out 
B)  Ann and Tim buying a used microwave oven 
C)  Ann and Tim buying vegetables to prepare soup at home 
D)  Tim buying Ann a dress 
E)  Tim and Ann painting the garage themselves 
A)  Ann cooking dinner for Tim instead of going out 
B)  Ann and Tim buying a used microwave oven 
C)  Ann and Tim buying vegetables to prepare soup at home 
D)  Tim buying Ann a dress 
E)  Tim and Ann painting the garage themselves

Question 12

If the GDP price index rises from 100 to 110 to 115 over three consecutive years, it can be concluded that the inflation rate is decreasing.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of an intermediate good?

Accepted Answer

A)  The flowers that Mr. Grover buys at a local nursery 
B)  The flowers that Timmy picks from a neighbor's garden and brings to Mrs. Grover 
C)  The flour that Grandma buys to bake a birthday cake 
D)  The flour that Joe buys so that he can eat pizza three nights a week 
E)  The flour that Amy orders each month for the bakery she manages 
A)  The flowers that Mr. Grover buys at a local nursery 
B)  The flowers that Timmy picks from a neighbor's garden and brings to Mrs. Grover 
C)  The flour that Grandma buys to bake a birthday cake 
D)  The flour that Joe buys so that he can eat pizza three nights a week 
E)  The flour that Amy orders each month for the bakery she manages

Question 14

The consumer price index (CPI) tends to understate the true rate of inflation.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a leakage into the circular flow of income and expenditure?

Accepted Answer

A)  Saving 
B)  Exports 
C)  Government expenditure on goods 
D)  Transfer payments 
E)  Investment by firms 
A)  Saving 
B)  Exports 
C)  Government expenditure on goods 
D)  Transfer payments 
E)  Investment by firms

Question 16

Katrina pays $40 for a meal at a fancy restaurant. The ingredients used cost $10. The value added by the restaurant is _____.

Accepted Answer

A)  $30 
B)  $40 
C)  $70 
D)  $40 plus the wages paid to the chef and waiters 
E)  $40 plus the profit earned by the restaurant owner 
A)  $30 
B)  $40 
C)  $70 
D)  $40 plus the wages paid to the chef and waiters 
E)  $40 plus the profit earned by the restaurant owner

Question 17

Which of the following is true of an intermediate good?

Accepted Answer

A)  It is of no value to the seller. 
B)  It is of no value to the buyer. 
C)  It is purchased for household production. 
D)  It helps produce another good. 
E)  It is sold at a discounted price by firms. 
A)  It is of no value to the seller. 
B)  It is of no value to the buyer. 
C)  It is purchased for household production. 
D)  It helps produce another good. 
E)  It is sold at a discounted price by firms.

Question 18

Which of the following will be included in the current year's gross domestic product (GDP)?

Accepted Answer

A)  The sale price of equipment produced last year but sold this year 
B)  The money spent by Kate on the purchase of new furniture 
C)  The money spent by Barney on the purchase of his uncle's house 
D)  The sale price of the stock purchased by John 
E)  The opportunity cost of the time spent by Bruno cooking lunch for his neighbor 
A)  The sale price of equipment produced last year but sold this year 
B)  The money spent by Kate on the purchase of new furniture 
C)  The money spent by Barney on the purchase of his uncle's house 
D)  The sale price of the stock purchased by John 
E)  The opportunity cost of the time spent by Bruno cooking lunch for his neighbor

Question 19

If the price of a good increases compared to the base year, then the price level also increases.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true of leakages and injections in the circular flow model?

Accepted Answer

A)  Leakages minus injections equal gross domestic product (GDP). 
B)  Injections minus leakages equal gross domestic product (GDP). 
C)  Leakages minus injections equal zero in equilibrium. 
D)  Leakages must be less than injections for an economy to be in equilibrium. 
E)  Leakages must be greater than injections for an economy to be growing. 
A)  Leakages minus injections equal gross domestic product (GDP). 
B)  Injections minus leakages equal gross domestic product (GDP). 
C)  Leakages minus injections equal zero in equilibrium. 
D)  Leakages must be less than injections for an economy to be in equilibrium. 
E)  Leakages must be greater than injections for an economy to be growing.

Gross domestic product (GDP) will increase if illegal drugs are made legal.

Which of the following is an example of a final good or service?

If the value of exports equals $6.5 billion and the value of imports equals $8.0 billion in a year, then:

A shortcoming of national income accounting is that it ignores:

Which of the following is likely to be excluded from the gross domestic product (GDP) of a country?

Suppose the real gross domestic product (GDP) equals $200 billion this year and the nominal gross domestic product (GDP) equals $300 billion. This implies that the price level has increased by _____.

The table below shows the real gross domestic product (GDP), consumption, planned investment, and government purchases for an economy. The aggregate expenditure in equilibrium is _____.

The Consumer Price Index (CPI) is a measure of the:

The value added by a firm is defined as:

A chain-weighted index recognizes the fact that the composition of output changes over time.

Which of the following actions would increase the consumption spending component of the gross domestic product (GDP) ?

If the GDP price index rises from 100 to 110 to 115 over three consecutive years, it can be concluded that the inflation rate is decreasing.

Which of the following is an example of an intermediate good?

The consumer price index (CPI) tends to understate the true rate of inflation.

Which of the following is an example of a leakage into the circular flow of income and expenditure?

Katrina pays $40 for a meal at a fancy restaurant. The ingredients used cost $10. The value added by the restaurant is _____.

Which of the following is true of an intermediate good?

Which of the following will be included in the current year's gross domestic product (GDP)?

If the price of a good increases compared to the base year, then the price level also increases.

Which of the following is true of leakages and injections in the circular flow model?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 6: Tracking the U S Economy

Gross domestic product (GDP) will increase if illegal drugs are made legal.

Which of the following is an example of a final good or service?

If the value of exports equals $6.5 billion and the value of imports equals $8.0 billion in a year, then:

A shortcoming of national income accounting is that it ignores:

Which of the following is likely to be excluded from the gross domestic product (GDP) of a country?

Suppose the real gross domestic product (GDP) equals $200 billion this year and the nominal gross domestic product (GDP) equals $300 billion. This implies that the price level has increased by _____.

The table below shows the real gross domestic product (GDP), consumption, planned investment, and government purchases for an economy. The aggregate expenditure in equilibrium is _____.

The Consumer Price Index (CPI) is a measure of the:

The value added by a firm is defined as:

A chain-weighted index recognizes the fact that the composition of output changes over time.

Which of the following actions would increase the consumption spending component of the gross domestic product (GDP) ?

If the GDP price index rises from 100 to 110 to 115 over three consecutive years, it can be concluded that the inflation rate is decreasing.

Which of the following is an example of an intermediate good?

The consumer price index (CPI) tends to understate the true rate of inflation.

Which of the following is an example of a leakage into the circular flow of income and expenditure?

Katrina pays $40 for a meal at a fancy restaurant. The ingredients used cost $10. The value added by the restaurant is _____.

Which of the following is true of an intermediate good?

Which of the following will be included in the current year's gross domestic product (GDP)?

If the price of a good increases compared to the base year, then the price level also increases.

Which of the following is true of leakages and injections in the circular flow model?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters