Question 1

If 2008 is the base year and the price index in 2009 is 109, prices in 2009 are _____ than prices in 2008.

Accepted Answer

A)  1 percent higher 
B)  8 percent higher 
C)  9 percent higher 
D)  0.9 percent higher 
E)  12 percent higher 
A)  1 percent higher 
B)  8 percent higher 
C)  9 percent higher 
D)  0.9 percent higher 
E)  12 percent higher

Question 2

If consumption = $2,000, investment = $600, government purchases = $500, net exports = −$40, transfer payments = $340, then _____.

Accepted Answer

A)  GDP = $2,720 
B)  GDP = $3,060 
C)  GDP = $3,140 
D)  GDP = $3,400 
E)  GDP = $3,340 
A)  GDP = $2,720 
B)  GDP = $3,060 
C)  GDP = $3,140 
D)  GDP = $3,400 
E)  GDP = $3,340

Question 3

A decrease in gross domestic product (GDP) necessarily means that consumer welfare has decreased.

Accepted Answer

A) True 
 B)False

Question 4

A fixed-weight price index provides less accurate changes than a chain-weighted system.

Accepted Answer

A) True 
 B)False

Question 5

Gross domestic product (GDP) is a poor measure of social well-being because:

Accepted Answer

A)  the value of leisure time is included in GDP accounting. 
B)  the revenue earned through exports is ignored. 
C)  each dollar of government spending is valued at less than one-half of private spending. 
D)  consumer spending is more important than business spending and should be considered more valuable. 
E)  it values products at their market prices but ignores services produced. 
A)  the value of leisure time is included in GDP accounting. 
B)  the revenue earned through exports is ignored. 
C)  each dollar of government spending is valued at less than one-half of private spending. 
D)  consumer spending is more important than business spending and should be considered more valuable. 
E)  it values products at their market prices but ignores services produced.

Question 6

If the real gross domestic product (GDP) is $5 trillion for a particular year and the GDP price index is 140, then the nominal GDP is $7 trillion.

Accepted Answer

A) True 
 B)False

Question 7

Suppose the respective prices of yogurt, candy bars, and popcorn in Year 1 are $1, $2, and $3. In Year 2, the unit prices of each are $2, $3, and $4 respectively. Which of the following statements is true of the price level between Year 1 and Year 2?

Accepted Answer

A)  It decreased by 20 percent. 
B)  It increased by 33 percent. 
C)  It increased from $6 to $9. 
D)  It decreased at a rate between 20 percent and 50 percent. 
E)  It increased at a rate between 33 percent and 100 percent. 
A)  It decreased by 20 percent. 
B)  It increased by 33 percent. 
C)  It increased from $6 to $9. 
D)  It decreased at a rate between 20 percent and 50 percent. 
E)  It increased at a rate between 33 percent and 100 percent.

Question 8

If the consumer price index (CPI) is 220 one year and 210 the next, the annual rate of inflation as measured by the CPI is approximately _____.

Accepted Answer

A)  −2.3 percent 
B)  −4.6 percent 
C)  10 percent 
D)  4.8 percent 
E)  220 percent 
A)  −2.3 percent 
B)  −4.6 percent 
C)  10 percent 
D)  4.8 percent 
E)  220 percent

Question 9

The base year for a price index is the year_____.

Accepted Answer

A)  in which prices were lowest 
B)  in which prices were highest 
C)  in which real output was the largest 
D)  in which prices were stable 
E)  that serves as a reference point 
A)  in which prices were lowest 
B)  in which prices were highest 
C)  in which real output was the largest 
D)  in which prices were stable 
E)  that serves as a reference point

Question 10

Whenever there is inflation, increase in nominal gross domestic product (GDP) overstates the growth rate of the economy.

Accepted Answer

A) True 
 B)False

If 2008 is the base year and the price index in 2009 is 109, prices in 2009 are _____ than prices in 2008.

If consumption = $2,000, investment = $600, government purchases = $500, net exports = −$40, transfer payments = $340, then _____.

A decrease in gross domestic product (GDP) necessarily means that consumer welfare has decreased.

A fixed-weight price index provides less accurate changes than a chain-weighted system.

Gross domestic product (GDP) is a poor measure of social well-being because:

If the real gross domestic product (GDP) is $5 trillion for a particular year and the GDP price index is 140, then the nominal GDP is $7 trillion.

Suppose the respective prices of yogurt, candy bars, and popcorn in Year 1 are $1, $2, and $3. In Year 2, the unit prices of each are $2, $3, and $4 respectively. Which of the following statements is true of the price level between Year 1 and Year 2?

If the consumer price index (CPI) is 220 one year and 210 the next, the annual rate of inflation as measured by the CPI is approximately _____.

The base year for a price index is the year_____.

Whenever there is inflation, increase in nominal gross domestic product (GDP) overstates the growth rate of the economy.

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

If 2008 is the base year and the price index in 2009 is 109, prices in 2009 are _____ than prices in 2008.

If consumption = $2,000, investment = $600, government purchases = $500, net exports = −$40, transfer payments = $340, then _____.

A decrease in gross domestic product (GDP) necessarily means that consumer welfare has decreased.

A fixed-weight price index provides less accurate changes than a chain-weighted system.

Gross domestic product (GDP) is a poor measure of social well-being because:

If the real gross domestic product (GDP) is $5 trillion for a particular year and the GDP price index is 140, then the nominal GDP is $7 trillion.

Suppose the respective prices of yogurt, candy bars, and popcorn in Year 1 are $1, $2, and $3. In Year 2, the unit prices of each are $2, $3, and $4 respectively. Which of the following statements is true of the price level between Year 1 and Year 2?

If the consumer price index (CPI) is 220 one year and 210 the next, the annual rate of inflation as measured by the CPI is approximately _____.

The base year for a price index is the year_____.

Whenever there is inflation, increase in nominal gross domestic product (GDP) overstates the growth rate of the economy.

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