Question 1

Which of the following holds true in a circular flow diagram?

Accepted Answer

A)  Factor flows are represented by drawing arrows from the firm sector to the household sector. 
B)  Income flows are represented by drawing arrows from the household sector to firms. 
C)  Production flows are represented by drawing arrows from the firm sector to the household sector. 
D)  Expenditure flows are represented by drawing arrows from the firm sector to the household sector. 
A)  Factor flows are represented by drawing arrows from the firm sector to the household sector. 
B)  Income flows are represented by drawing arrows from the household sector to firms. 
C)  Production flows are represented by drawing arrows from the firm sector to the household sector. 
D)  Expenditure flows are represented by drawing arrows from the firm sector to the household sector.

Question 2

Scenario: Infi Corp. is a leading manufacturer of smart phones. Every year, customers spend $31 billion on smart phones manufactured by Infi Corp. A leading retailer generates $10 billion worth of total sales, while the remaining is generated directly from consumers. The retailer pays 70 percent of its revenue to Infi Corp., and Infi Corp. pays $19 billion to its suppliers.
-Refer to the scenario above.The retailer adds a value of ________ to the production process.

Accepted Answer

A)  $5 billion 
B)  $10 billion 
C)  $3 billion 
D)  $1 billion 
A)  $5 billion 
B)  $10 billion 
C)  $3 billion 
D)  $1 billion

Question 3

Scenario: Mike's housekeeper charges $30 for mowing his lawn.
-Refer to the scenario above.Which of the following will happen if Mike decides to mow his lawn himself instead of paying his housekeeper for the service?

Accepted Answer

A)  GDP will increase. 
B)  GDP will decrease. 
C)  Income per capita will increase. 
D)  GDP will remain unchanged. 
A)  GDP will increase. 
B)  GDP will decrease. 
C)  Income per capita will increase. 
D)  GDP will remain unchanged.

Question 4

Which of the following will be included in the calculation of GDP using the income-based method of national accounting?

Accepted Answer

A)  The money spent by foreigners on domestically produced food grains 
B)  Health insurance provided to a worker by the employer 
C)  The value added by a worker in the production of a good 
D)  The money paid to a pharmacist for medicines 
A)  The money spent by foreigners on domestically produced food grains 
B)  Health insurance provided to a worker by the employer 
C)  The value added by a worker in the production of a good 
D)  The money paid to a pharmacist for medicines

Question 5

Why is the value added by each producer included in the calculation of GDP instead of its sales revenue?

Accepted Answer

The revenue or final value of a good inc

Question 6

Which of the following will be included in the calculation of GDP using the expenditure method?

Accepted Answer

A)  Interest earned on money loaned out 
B)  Investments in machinery 
C)  Dividend earned on shares 
D)  Value added in the production of a good 
A)  Interest earned on money loaned out 
B)  Investments in machinery 
C)  Dividend earned on shares 
D)  Value added in the production of a good

Question 7

The table below contains data for a country. The base year is 2006.
  
-Refer to the above table.Which of the following is not correct?

Accepted Answer

A)  This economy experienced growth from 2016 to 2017. 
B)  This economy experienced growth from 2017 to 2018. 
C)  This economy experienced growth from 2018 to 2019. 
D)  This economy experienced inflation in every year. 
A)  This economy experienced growth from 2016 to 2017. 
B)  This economy experienced growth from 2017 to 2018. 
C)  This economy experienced growth from 2018 to 2019. 
D)  This economy experienced inflation in every year.

Question 8

The table below contains data for the country of Wandalian for the year 2017.
  
-Refer to the above table.What was Wandalian's government purchases in 2017?

Accepted Answer

A)  $1,030 
B)  $1,571 
C)  $1,677 
D)  $2,044 
A)  $1,030 
B)  $1,571 
C)  $1,677 
D)  $2,044

Question 9

The following table provides data for the small country of Nabou.
  
-Refer to the above table.What is the GDP for Nabou using the expenditure method?

Accepted Answer

A)  $3,901 
B)  $2,180 
C)  $2,490 
D)  $2,340 
A)  $3,901 
B)  $2,180 
C)  $2,490 
D)  $2,340

Question 10

A Japanese businessman opened an automobile showroom in Singapore this year.His income led to a(n)________.

Accepted Answer

A)  increase in the GDP of Japan 
B)  decrease in the GDP of Japan 
C)  increase in the GDP of Singapore 
D)  decrease in the GDP of Singapore 
A)  increase in the GDP of Japan 
B)  decrease in the GDP of Japan 
C)  increase in the GDP of Singapore 
D)  decrease in the GDP of Singapore

Question 11

Which of the following questions have a macroeconomic focus?

Accepted Answer

A)  How does a monopolist decide how much to produce? 
B)  What is the unemployment rate in your country? 
C)  How does the demand for a good change when there is an increase in a consumer's income? 
D)  How does a consumer choose which goods to consume given his or her income? 
A)  How does a monopolist decide how much to produce? 
B)  What is the unemployment rate in your country? 
C)  How does the demand for a good change when there is an increase in a consumer's income? 
D)  How does a consumer choose which goods to consume given his or her income?

Question 12

The table below contains data for a country. The base year is 2006.
  
-Refer to the above table.From 2017 to 2019,inflation is ________ and output ________.

Accepted Answer

A)  5.8 percent; grew 
B)  7 percent; grew 
C)  9.4 percent; grew 
D)  28 percent; did not grow 
A)  5.8 percent; grew 
B)  7 percent; grew 
C)  9.4 percent; grew 
D)  28 percent; did not grow

Question 13

Which of the following would a macroeconomist study?

Accepted Answer

A)  The total cost incurred by a firm 
B)  The income earned by a household 
C)  The annual inflation rate in an economy 
D)  The profit earned by an entrepreneur 
A)  The total cost incurred by a firm 
B)  The income earned by a household 
C)  The annual inflation rate in an economy 
D)  The profit earned by an entrepreneur

Question 14

Scenario: A country produces only one good. It produced 5,000 units of the good during Year 1 and 6,000 units of the good in Year 2. The price of each unit of the good in Year 1 was $280 and it was $320 in Year 2. Suppose Year 1 is taken as the base year for the calculation of GDP.
-Refer to the scenario above.The real GDP of the country in Year 1 was ________.

Accepted Answer

A)  $1,400,000 
B)  $280,000 
C)  $540,000 
D)  $2,200,000 
A)  $1,400,000 
B)  $280,000 
C)  $540,000 
D)  $2,200,000

Question 15

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired.
  
-Refer to the table above.What is the labor force?

Accepted Answer

A)  72,000 
B)  62,000 
C)  76,000 
D)  Not enough information provided 
A)  72,000 
B)  62,000 
C)  76,000 
D)  Not enough information provided

Question 16

The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts. The quantity produced and price of each good in 2016 and 2017 are provided.
  
-Refer to the above table.Assuming that 2016 is the base year,what was the GDP deflator in 2017?

Accepted Answer

A)  102.3 
B)  109.5 
C)  111 
D)  115 
A)  102.3 
B)  109.5 
C)  111 
D)  115

Question 17

The GDP deflator of a country in the base year was 100,and it is 130 in the current year.This implies that the prices of final goods and services produced in the country have increased by ________ between the two years.

Accepted Answer

A)  30 percent 
B)  3 percent 
C)  10 percent 
D)  0.1 percent 
A)  30 percent 
B)  3 percent 
C)  10 percent 
D)  0.1 percent

Question 18

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired.
  
-Refer to the table above.What is the labor force participation rate?

Accepted Answer

A)  51.4 percent 
B)  44.3 percent 
C)  54.3 percent 
D)  Not enough information provided 
A)  51.4 percent 
B)  44.3 percent 
C)  54.3 percent 
D)  Not enough information provided

Question 19

The GNP of a country for a certain year was $340,000.If the contribution of its factors of production to the production of various goods and services in other countries was worth $140,000 and the contribution of foreign factors of production in the production of goods and services in this country was worth $50,000,the GDP of the country for that year was ________.

Accepted Answer

A)  $430,000 
B)  $160,000 
C)  $250,000 
D)  $480,000 
A)  $430,000 
B)  $160,000 
C)  $250,000 
D)  $480,000

Question 20

The table below contains data for a country. The base year is 2006.
  
-Refer to the above table.From 2017 to 2018,inflation is ________ and output ________.

Accepted Answer

A)  3.4 percent; grew 
B)  18 percent; grew 
C)  2.5 percent; grew 
D)  3.5 percent; did not grow 
A)  3.4 percent; grew 
B)  18 percent; grew 
C)  2.5 percent; grew 
D)  3.5 percent; did not grow

Which of the following holds true in a circular flow diagram?

Scenario: Mike's housekeeper charges $30 for mowing his lawn. -Refer to the scenario above.Which of the following will happen if Mike decides to mow his lawn himself instead of paying his housekeeper for the service?

Which of the following will be included in the calculation of GDP using the income-based method of national accounting?

Why is the value added by each producer included in the calculation of GDP instead of its sales revenue?

Which of the following will be included in the calculation of GDP using the expenditure method?

The table below contains data for a country. The base year is 2006. -Refer to the above table.Which of the following is not correct?

The table below contains data for the country of Wandalian for the year 2017. -Refer to the above table.What was Wandalian's government purchases in 2017?

The following table provides data for the small country of Nabou. -Refer to the above table.What is the GDP for Nabou using the expenditure method?

A Japanese businessman opened an automobile showroom in Singapore this year.His income led to a(n)________.

Which of the following questions have a macroeconomic focus?

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2019,inflation is and output .

Which of the following would a macroeconomist study?

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired. -Refer to the table above.What is the labor force?

The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts. The quantity produced and price of each good in 2016 and 2017 are provided. -Refer to the above table.Assuming that 2016 is the base year,what was the GDP deflator in 2017?

The GDP deflator of a country in the base year was 100,and it is 130 in the current year.This implies that the prices of final goods and services produced in the country have increased by ________ between the two years.

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired. -Refer to the table above.What is the labor force participation rate?

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2018,inflation is and output .

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

Exam 5: The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Which of the following holds true in a circular flow diagram?

Scenario: Mike's housekeeper charges $30 for mowing his lawn. -Refer to the scenario above.Which of the following will happen if Mike decides to mow his lawn himself instead of paying his housekeeper for the service?

Which of the following will be included in the calculation of GDP using the income-based method of national accounting?

Why is the value added by each producer included in the calculation of GDP instead of its sales revenue?

Which of the following will be included in the calculation of GDP using the expenditure method?

The table below contains data for a country. The base year is 2006. -Refer to the above table.Which of the following is not correct?

The table below contains data for the country of Wandalian for the year 2017. -Refer to the above table.What was Wandalian's government purchases in 2017?

The following table provides data for the small country of Nabou. -Refer to the above table.What is the GDP for Nabou using the expenditure method?

A Japanese businessman opened an automobile showroom in Singapore this year.His income led to a(n)________.

Which of the following questions have a macroeconomic focus?

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2019,inflation is ________ and output ________.

Which of the following would a macroeconomist study?

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired. -Refer to the table above.What is the labor force?

The country described in the table below produces and consumes only three goods: energy drinks, pizza, and t-shirts. The quantity produced and price of each good in 2016 and 2017 are provided. -Refer to the above table.Assuming that 2016 is the base year,what was the GDP deflator in 2017?

The GDP deflator of a country in the base year was 100,and it is 130 in the current year.This implies that the prices of final goods and services produced in the country have increased by ________ between the two years.

The following table contains statistics for the country of Gregorville in 2017, a country in which all must either attend school, be available for work, or be retired. -Refer to the table above.What is the labor force participation rate?

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2018,inflation is ________ and output ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2019,inflation is and output .

The table below contains data for a country. The base year is 2006. -Refer to the above table.From 2017 to 2018,inflation is and output .