Question 1

If consumption = $2,000, investment = $600, government purchases = $500, net exports = −$40, and 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 2

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

Accepted Answer

A)  savings 
B)  exports 
C)  government expenditure on goods 
D)  transfer payments 
E)  investment by firms 
A)  savings 
B)  exports 
C)  government expenditure on goods 
D)  transfer payments 
E)  investment by firms

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not an example of intermediate goods or services?

Accepted Answer

A)  steel used in the manufacture of cars 
B)  pizzas bought at a restaurant 
C)  legal services hired by a public accounting firm 
D)  glass used to manufacture sunglasses 
E)  vegetables used by a restaurant 
A)  steel used in the manufacture of cars 
B)  pizzas bought at a restaurant 
C)  legal services hired by a public accounting firm 
D)  glass used to manufacture sunglasses 
E)  vegetables used by a restaurant

Question 5

If a toy store overestimates the demand for a toy in 2016 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as _____

Accepted Answer

A)  investment in 2016. 
B)  investment in 2017. 
C)  consumption in 2016. 
D)  consumption in 2017. 
E)  a part of GDP when the toys are sold. 
A)  investment in 2016. 
B)  investment in 2017. 
C)  consumption in 2016. 
D)  consumption in 2017. 
E)  a part of GDP when the toys are sold.

Question 6

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

Accepted Answer

A)  the value of leisure time is excluded from 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 excluded from 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 7

Which of the following is true of exports and imports?

Accepted Answer

A)  Both imports and exports are added to a nation's gross domestic product (GDP). 
B)  Both imports and exports are subtracted from a nation's gross domestic product (GDP). 
C)  Imports are added to and exports are subtracted from a nation's gross domestic product (GDP). 
D)  Exports are added to and imports are subtracted from a nation's gross domestic product (GDP). 
E)  Neither imports nor exports are included in a nation's gross domestic product (GDP). 
A)  Both imports and exports are added to a nation's gross domestic product (GDP). 
B)  Both imports and exports are subtracted from a nation's gross domestic product (GDP). 
C)  Imports are added to and exports are subtracted from a nation's gross domestic product (GDP). 
D)  Exports are added to and imports are subtracted from a nation's gross domestic product (GDP). 
E)  Neither imports nor exports are included in a nation's gross domestic product (GDP).

Question 8

Real gross domestic product (GDP) is measured in terms of the _____

Accepted Answer

A)  current-year prices. 
B)  base-year prices. 
C)  export of goods and services. 
D)  amount of taxes collected. 
E)  hours of employment. 
A)  current-year prices. 
B)  base-year prices. 
C)  export of goods and services. 
D)  amount of taxes collected. 
E)  hours of employment.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

If a firm hires labor for $6,000, pays rent of $2,000, buys raw materials for $10,000 from another firm, earns profits of $800, and sells its output for $25,000, the value added by the firm is _____

Accepted Answer

A)  $6,200. 
B)  $9,000. 
C)  $15,000. 
D)  $18,000. 
E)  $18,800. 
A)  $6,200. 
B)  $9,000. 
C)  $15,000. 
D)  $18,000. 
E)  $18,800.

Question 11

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 12

Given the following hypothetical data, where gross domestic product (GDP) is $10,000 and depreciation is $3,000, net domestic product (NDP) is _____

Accepted Answer

A)  $13,000. 
B)  $10,000. 
C)  $7,000. 
D)  $5,000. 
E)  $3,000. 
A)  $13,000. 
B)  $10,000. 
C)  $7,000. 
D)  $5,000. 
E)  $3,000.

Question 13

When market exchange does not occur, what must happen to income?

Accepted Answer

A)  Income must be imputed. 
B)  Income must be ignored. 
C)  Income must be taxed. 
D)  Income must be included the following year. 
E)  Income must be depreciated. 
A)  Income must be imputed. 
B)  Income must be ignored. 
C)  Income must be taxed. 
D)  Income must be included the following year. 
E)  Income must be depreciated.

Question 14

Which of the following is a problem associated with gross domestic product (GDP) as a measure of social welfare?

Accepted Answer

A)  It includes many non-market activities. 
B)  It takes into account the value of only those goods that are widely used. 
C)  It takes into account the cost of environmental damage caused by pollution. 
D)  It includes intermediate goods as a separate entry. 
E)  It excludes the value of leisure time. 
A)  It includes many non-market activities. 
B)  It takes into account the value of only those goods that are widely used. 
C)  It takes into account the cost of environmental damage caused by pollution. 
D)  It includes intermediate goods as a separate entry. 
E)  It excludes the value of leisure time.

Question 15

Net domestic product equals gross domestic product minus _____

Accepted Answer

A)  depreciation. 
B)  appreciation. 
C)  imputed income. 
D)  the underground economy. 
E)  externalities. 
A)  depreciation. 
B)  appreciation. 
C)  imputed income. 
D)  the underground economy. 
E)  externalities.

Question 16

Taxes are injections into the circular flow of income and expenditure model.

Accepted Answer

A) True 
 B)False

Question 17

If the real gross domestic product (GDP) for the base year is $4 trillion, then the nominal gross domestic product (GDP) for that year is _____.

Accepted Answer

A)  −$.04 trillion 
B)  $0.4 trillion 
C)  $4 trillion 
D)  $40 trillion 
E)  $400 trillion 
A)  −$.04 trillion 
B)  $0.4 trillion 
C)  $4 trillion 
D)  $40 trillion 
E)  $400 trillion

Question 18

If the consumer price index (CPI) is 160 one year and 175 the next, the annual rate of inflation as measured by the CPI is approximately _____

Accepted Answer

A)  4.5 percent. 
B)  8.6 percent. 
C)  9.4 percent. 
D)  15 percent. 
E)  175 percent. 
A)  4.5 percent. 
B)  8.6 percent. 
C)  9.4 percent. 
D)  15 percent. 
E)  175 percent.

Question 19

If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____.

Accepted Answer

A)  103 percent 
B)  1 percent 
C)  6 percent 
D)  3 percent 
E)  206 percent 
A)  103 percent 
B)  1 percent 
C)  6 percent 
D)  3 percent 
E)  206 percent

Question 20

Net exports equal _____

Accepted Answer

A)  the value of exports minus the value of imports. 
B)  the value of imports minus the value of exports. 
C)  the value of imports minus tariffs. 
D)  the value of exports minus tariffs. 
E)  the value of exports plus the value of imports minus depreciation. 
A)  the value of exports minus the value of imports. 
B)  the value of imports minus the value of exports. 
C)  the value of imports minus tariffs. 
D)  the value of exports minus tariffs. 
E)  the value of exports plus the value of imports minus depreciation.

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

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

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

Which of the following is not an example of intermediate goods or services?

If a toy store overestimates the demand for a toy in 2016 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as _____

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

Which of the following is true of exports and imports?

Real gross domestic product (GDP) is measured in terms of the _____

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

If a firm hires labor for $6,000, pays rent of $2,000, buys raw materials for $10,000 from another firm, earns profits of $800, and sells its output for $25,000, the value added by the firm is _____

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.

Given the following hypothetical data, where gross domestic product (GDP) is $10,000 and depreciation is $3,000, net domestic product (NDP) is _____

When market exchange does not occur, what must happen to income?

Which of the following is a problem associated with gross domestic product (GDP) as a measure of social welfare?

Net domestic product equals gross domestic product minus _____

Taxes are injections into the circular flow of income and expenditure model.

If the real gross domestic product (GDP) for the base year is $4 trillion, then the nominal gross domestic product (GDP) for that year is _____.

If the consumer price index (CPI) is 160 one year and 175 the next, the annual rate of inflation as measured by the CPI is approximately _____

If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____.

Net exports equal _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

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Exam 6: Tracking the U. S. Economy.

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

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

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

Which of the following is not an example of intermediate goods or services?

If a toy store overestimates the demand for a toy in 2016 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as _____

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

Which of the following is true of exports and imports?

Real gross domestic product (GDP) is measured in terms of the _____

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

If a firm hires labor for $6,000, pays rent of $2,000, buys raw materials for $10,000 from another firm, earns profits of $800, and sells its output for $25,000, the value added by the firm is _____

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.

Given the following hypothetical data, where gross domestic product (GDP) is $10,000 and depreciation is $3,000, net domestic product (NDP) is _____

When market exchange does not occur, what must happen to income?

Which of the following is a problem associated with gross domestic product (GDP) as a measure of social welfare?

Net domestic product equals gross domestic product minus _____

Taxes are injections into the circular flow of income and expenditure model.

If the real gross domestic product (GDP) for the base year is $4 trillion, then the nominal gross domestic product (GDP) for that year is _____.

If the consumer price index (CPI) is 160 one year and 175 the next, the annual rate of inflation as measured by the CPI is approximately _____

If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____.

Net exports equal _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters