Question 1

Stagflation is the simultaneous occurrence of inflation and high unemployment.

Accepted Answer

A) True 
 B)False

Question 2

From 2000 to 2001,the U.S.economy's annual growth rate slowed down abruptly.

Accepted Answer

A) True 
 B)False

Question 3

If aggregate demand shifts outward,the result will be inflation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following transactions would be included in GDP for 2011?

Accepted Answer

A)  On January 5, 2011, Chris Carter sold 100 shares of stock in IBM Corporation. 
B)  Bonita Delgado purchases a new 2011 Chevrolet on March 10, 2011. 
C)  Nadav Daniel buys a used desk from the "Struggling Students Used Furniture" store on May 9, 2011. 
D)  Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2011. 
A)  On January 5, 2011, Chris Carter sold 100 shares of stock in IBM Corporation. 
B)  Bonita Delgado purchases a new 2011 Chevrolet on March 10, 2011. 
C)  Nadav Daniel buys a used desk from the "Struggling Students Used Furniture" store on May 9, 2011. 
D)  Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2011.

Question 5

Mitsubishi Corporation of America builds a car in Normal,Illinois,and ships it to Japan for sale.In which country's GDP is this production included?

Accepted Answer

A)  Japan 
B)  both Japan and the United States 
C)  in Japan as retail value and the United States as wholesale value 
D)  half the value in Japan and half in the United States 
E)  the United States 
A)  Japan 
B)  both Japan and the United States 
C)  in Japan as retail value and the United States as wholesale value 
D)  half the value in Japan and half in the United States 
E)  the United States

Question 6

Gross Domestic Product represents the money value of all final goods and services produced in the domestic economy within the year.

Accepted Answer

A) True 
 B)False

Question 7

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

Accepted Answer

A)  total employment. 
B)  total final output. 
C)  the price level. 
D)  net exports. 
A)  total employment. 
B)  total final output. 
C)  the price level. 
D)  net exports.

Question 8

The horizontal axis on the aggregate demand-aggregate supply model measures

Accepted Answer

A)  the price of the specific product produced. 
B)  the level of total output. 
C)  the price level. 
D)  the level of employment. 
A)  the price of the specific product produced. 
B)  the level of total output. 
C)  the price level. 
D)  the level of employment.

Question 9

Which of the following items are included in GDP? For those items not included,explain why they are not included in GDP.
a.Jane buys newly issued shares of stock in Macro.com, Inc.
b.Ross buys a new pair of jeans at a local department store.
c.Joey has his mustache trimmed at his hair salon.
d.Rachel buys an antique chest at a resale shop.
e.Monica makes her own pasta sauce in her apartment. 
f. Phoebe grows her own herbs on her apartment balcony.
g. Michael travels to Austria and buys wine and cheese.

Accepted Answer

a.This is not included in GDP.No good or

Question 10

John Maynard Keynes wrote The General Theory of Employment,Interest,and Money (1936)to

Accepted Answer

A)  improve the gold supply balances of the British government. 
B)  prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C)  prove that active government policy would produce unemployment and high rates of inflation. 
D)  demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation. 
A)  improve the gold supply balances of the British government. 
B)  prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C)  prove that active government policy would produce unemployment and high rates of inflation. 
D)  demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation.

Question 11

Combining various goods and services into a convenient grouping is called

Accepted Answer

A)  conglomeration. 
B)  blending. 
C)  congregation. 
D)  agglomeration. 
E)  aggregation. 
A)  conglomeration. 
B)  blending. 
C)  congregation. 
D)  agglomeration. 
E)  aggregation.

Question 12

Large sport utility vehicles (SUVs)add significantly to air pollution because they do not have to meet passenger auto emission standards.The purchase of an SUV

Accepted Answer

A)  adds less to GDP since the pollution costs are subtracted from GDP. 
B)  adds to nominal but not real GDP because of the pollution costs. 
C)  is a net loss to GDP because the pollution costs are so large. 
D)  increases GDP. 
A)  adds less to GDP since the pollution costs are subtracted from GDP. 
B)  adds to nominal but not real GDP because of the pollution costs. 
C)  is a net loss to GDP because the pollution costs are so large. 
D)  increases GDP.

Question 13

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Accepted Answer

A)  The value of resource depletion is added to GDP. 
B)  The cost of resource depletion is not measured in GDP. 
C)  The cost of resource depletion is added to real but not nominal GDP. 
D)  Resource depletion causes GDP to overstate well being. 
A)  The value of resource depletion is added to GDP. 
B)  The cost of resource depletion is not measured in GDP. 
C)  The cost of resource depletion is added to real but not nominal GDP. 
D)  Resource depletion causes GDP to overstate well being.

Question 14

Trish grows oregano in her backyard to use in her homemade pesto sauce.How is this gardening included in GDP?

Accepted Answer

A)  It is included in real GDP. 
B)  It is included in nominal GDP. 
C)  It is not included in GDP. 
D)  It is included as an intermediate good. 
A)  It is included in real GDP. 
B)  It is included in nominal GDP. 
C)  It is not included in GDP. 
D)  It is included as an intermediate good.

Question 15

Aneta has owned an Italian sports car for several years and now she wants to sell it.She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2011.How is this sale included in the GDP for 2011?

Accepted Answer

A)  $8,500 is included in 2011 GDP 
B)  $39,000 is included in 2011 GDP 
C)  The increase in value of $10,500 is included in 2011 GDP 
D)  It is not included in 2011 GDP 
A)  $8,500 is included in 2011 GDP 
B)  $39,000 is included in 2011 GDP 
C)  The increase in value of $10,500 is included in 2011 GDP 
D)  It is not included in 2011 GDP

Question 16

Changes in nominal GDP always reflect changes in real output.

Accepted Answer

A) True 
 B)False

Question 17

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

Accepted Answer

A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve. 
A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve.

Question 18

Nominal GDP includes the current value of services produced in the economy.

Accepted Answer

A) True 
 B)False

Question 19

An example of an intermediate good would be a(n)

Accepted Answer

A)  new car. 
B)  used car. 
C)  new tire for a used car. 
D)  tire for a new car. 
E)  All of the above. 
A)  new car. 
B)  used car. 
C)  new tire for a used car. 
D)  tire for a new car. 
E)  All of the above.

Question 20

Which of the following is a t measure of national output?

Accepted Answer

A)  GDP at market price 
B)  Nominal GDP 
C)  GDP in current dollars 
D)  GDP in constant dollars 
A)  GDP at market price 
B)  Nominal GDP 
C)  GDP in current dollars 
D)  GDP in constant dollars

Stagflation is the simultaneous occurrence of inflation and high unemployment.

From 2000 to 2001,the U.S.economy's annual growth rate slowed down abruptly.

If aggregate demand shifts outward,the result will be inflation.

Which of the following transactions would be included in GDP for 2011?

Mitsubishi Corporation of America builds a car in Normal,Illinois,and ships it to Japan for sale.In which country's GDP is this production included?

Gross Domestic Product represents the money value of all final goods and services produced in the domestic economy within the year.

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

The horizontal axis on the aggregate demand-aggregate supply model measures

John Maynard Keynes wrote The General Theory of Employment,Interest,and Money (1936)to

Combining various goods and services into a convenient grouping is called

Large sport utility vehicles (SUVs)add significantly to air pollution because they do not have to meet passenger auto emission standards.The purchase of an SUV

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Trish grows oregano in her backyard to use in her homemade pesto sauce.How is this gardening included in GDP?

Aneta has owned an Italian sports car for several years and now she wants to sell it.She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2011.How is this sale included in the GDP for 2011?

Changes in nominal GDP always reflect changes in real output.

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

Nominal GDP includes the current value of services produced in the economy.

An example of an intermediate good would be a(n)

Which of the following is a t measure of national output?

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 5: An Introduction to Macroeconomics

Stagflation is the simultaneous occurrence of inflation and high unemployment.

From 2000 to 2001,the U.S.economy's annual growth rate slowed down abruptly.

If aggregate demand shifts outward,the result will be inflation.

Which of the following transactions would be included in GDP for 2011?

Mitsubishi Corporation of America builds a car in Normal,Illinois,and ships it to Japan for sale.In which country's GDP is this production included?

Gross Domestic Product represents the money value of all final goods and services produced in the domestic economy within the year.

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

The horizontal axis on the aggregate demand-aggregate supply model measures

John Maynard Keynes wrote The General Theory of Employment,Interest,and Money (1936)to

Combining various goods and services into a convenient grouping is called

Large sport utility vehicles (SUVs)add significantly to air pollution because they do not have to meet passenger auto emission standards.The purchase of an SUV

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Trish grows oregano in her backyard to use in her homemade pesto sauce.How is this gardening included in GDP?

Aneta has owned an Italian sports car for several years and now she wants to sell it.She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2011.How is this sale included in the GDP for 2011?

Changes in nominal GDP always reflect changes in real output.

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

Nominal GDP includes the current value of services produced in the economy.

An example of an intermediate good would be a(n)

Which of the following is a t measure of national output?

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters