Question 1

According to the rule of 70, if GDP per person is growing at a rate of roughly 1.5%, approximately how many years will it take for average income to double?

Accepted Answer

A) 47 years 
B) 20 years 
C) 70 years 
D) 23 years 
A) 47 years 
B) 20 years 
C) 70 years 
D) 23 years

Question 2

(Table: Real and Nominal Output) Use Table: Real and Nominal Output. Nominal output in year 4 is: $$\begin{array} { | l | l | l | } 
\hline \text { Year } & \text { Units of Output } & \text { Price per Unit } \
\hline 1 & 40 & \$ 1 \
\hline 2 & 30 & \$ 2 \
\hline 3 & 50 & \$ 2 \
\hline 4 & 70 & \$ 4 \
\hline 5 & 60 & \$ 6 \
\hline 6 & 60 & \$ 8 \
\hline
\end{array}$$

Accepted Answer

A) $70 
B) $70. 
C) $120 
D) $120. 
E) $140
F)$140.
G)$280
H)$280. 
A) $70 
B) $70. 
C) $120 
D) $120. 
E) $140
F)$140.
G)$280
H)$280.

Question 3

(Table: Price and Output Data) Use Table: Price and Output Data. The value of year 2's output in real dollars is: $$\begin{array} { | l | l | l | } 
\hline \text { Year } & \text { Output } & \text { Price per Unit } \
\hline 1 & 2 & \$ 2 \
\hline 2 & 3 & 4 \
\hline 3 = \text { base period } & 4 & 5 \
\hline 4 & 6 & 6 \
\hline 5 & 7 & 9 \
\hline
\end{array}$$

Accepted Answer

A) $4 
B) $4. 
C) $12. 
D) $12 
E) $15.
F)$15
G)$16
H)$16. 
A) $4 
B) $4. 
C) $12. 
D) $12 
E) $15.
F)$15
G)$16
H)$16.

Question 4

How can GDP be total expenditure, total output, and total income at the same time?

Accepted Answer

The answer of How can GDP be total expenditure, total...

Question 5

In the market for outputs:

Accepted Answer

A) households sell goods and services. 
B) households sell goods and services 
C) households buy goods and services. 
D) households buy goods and services 
E) firms buy resources.
F)firms buy resources
G)firms supply resources.
H)firms supply resources 
A) households sell goods and services. 
B) households sell goods and services 
C) households buy goods and services. 
D) households buy goods and services 
E) firms buy resources.
F)firms buy resources
G)firms supply resources.
H)firms supply resources

Question 6

Goods that are sold in 2020 but produced in 2018:

Accepted Answer

A) count as consumption in 2020. 
B) count as consumption in 2020 
C) are included in investment in 2018 
D) are included in investment in 2018. 
E) are treated like exports
F)are treated like exports.
G)are classified as purely financial transactions
H)are classified as purely financial transactions. 
A) count as consumption in 2020. 
B) count as consumption in 2020 
C) are included in investment in 2018 
D) are included in investment in 2018. 
E) are treated like exports
F)are treated like exports.
G)are classified as purely financial transactions
H)are classified as purely financial transactions.

Question 7

This question has two parts.
(a) Draw and label a circular flow diagram.
(b) What are the key lessons learned from a circular flow diagram?

Accepted Answer

The answer of This question has two parts.
(a) Draw and...

Question 8

In the market for inputs:

Accepted Answer

A) households sell goods and services. 
B) households sell goods and services 
C) households buy goods and services. 
D) households buy goods and services 
E) firms buy resources.
F)firms buy resources
G)firms sell resources.
H)firms sell resources 
A) households sell goods and services. 
B) households sell goods and services 
C) households buy goods and services. 
D) households buy goods and services 
E) firms buy resources.
F)firms buy resources
G)firms sell resources.
H)firms sell resources

Question 9

Macroeconomists:

Accepted Answer

A) analyze aggregate data on real GDP, the price level, and unemployment. 
B) analyze aggregate data on real GDP, the price level, and unemployment 
C) study decisions of individuals and firms regarding utility and profit maximization, respectively 
D) study decisions of individuals and firms regarding utility and profit maximization, respectively. 
E) do not consider long-term growth important.
F)do not consider long-term growth important
G)do not consider government intervention in markets important
H)do not consider government intervention in markets important. 
A) analyze aggregate data on real GDP, the price level, and unemployment. 
B) analyze aggregate data on real GDP, the price level, and unemployment 
C) study decisions of individuals and firms regarding utility and profit maximization, respectively 
D) study decisions of individuals and firms regarding utility and profit maximization, respectively. 
E) do not consider long-term growth important.
F)do not consider long-term growth important
G)do not consider government intervention in markets important
H)do not consider government intervention in markets important.

Question 10

You own and run a bakery. Last month, you purchased $760 worth of flour, eggs, butter, chocolate, and frosting. Using these inputs, you made and sold 12 large wedding cakes for an average price of $525. How much did GDP change?

Accepted Answer

A) GDP rises by $760. 
B) GDP rises by $6,300. 
C) GDP rises by $7,060. 
D) GDP rises by $5,540. 
A) GDP rises by $760. 
B) GDP rises by $6,300. 
C) GDP rises by $7,060. 
D) GDP rises by $5,540.

Question 11

Refer to the diagram of the circular flow of income. Based on the diagram, box 2 must be:

Accepted Answer

A) businesses. 
B) households. 
C) the market for resources. 
D) the market for outputs. 
A) businesses. 
B) households. 
C) the market for resources. 
D) the market for outputs.

Question 12

According to the rule of 70, if GDP per person is growing at a rate of roughly 3.4%, approximately how many years will it take for average income to double?

Accepted Answer

A) 49 years 
B) 52 years 
C) 21 years 
D) 13 years 
A) 49 years 
B) 52 years 
C) 21 years 
D) 13 years

Question 13

(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2018 as the base year, real GDP in 2019 was: $$\begin{array} { | l | l | l | l | l | } 
\hline & \begin{array} { l } 
\text { 2018 Units of } \
\text { Output }
\end{array} & \begin{array} { l } 
\text { 2018 Price per } \
\text { Unit }
\end{array} & \begin{array} { l } 
\text { 2019 Units of } \
\text { Output }
\end{array} & \begin{array} { l } 
\text { 2019 Price } \
\text { per Unit }
\end{array} \
\hline \text { Gino's Pizza } & 4,000 & \$ 10 & 4,000 & \$ 8 \
\hline \text { Bee's Spaghetti } & 3,000 & \$ 9 & 1,000 & \$ 6 \
\hline \text { Claudia's Cookies } & 2,000 & \$ 6 & 1,000 & \$ 1 \
\hline \text { Andre's Salad } & 5,000 & \$ 7 & 2,000 & \$ 4 \
\hline
\end{array}$$

Accepted Answer

A) $47,000 
B) $47,000. 
C) $69,000. 
D) $69,000 
E) $72,000
F)$72,000.
G)$114,000
H)$114,000. 
A) $47,000 
B) $47,000. 
C) $69,000. 
D) $69,000 
E) $72,000
F)$72,000.
G)$114,000
H)$114,000.

Question 14

The circular flow of income shows that total spending is _____ total income.

Accepted Answer

A) greater than 
B) equal to 
C) less than 
D) unrelated to 
A) greater than 
B) equal to 
C) less than 
D) unrelated to

Question 15

During 2000 and 2001, nominal GDP in the United States grew by 3.2%, and the rate of inflation was 2.2%. What was the growth rate of real GDP between the two years?

Accepted Answer

A) 1% 
B) 2.2% 
C) 4.4% 
D) 5.4% 
A) 1% 
B) 2.2% 
C) 4.4% 
D) 5.4%

Question 16

Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the nominal GDP for this year?
$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Barrels of } \
\text { Oil Sold }
\end{array} & \begin{array} { c } 
\text { Actual } \
\text { Price }
\end{array} \
\hline \text { Last year } & 80,000 & \$ 60 \
\hline \text { This year } & 83,000 & \$ 63 \
\hline
\end{array}$$

Accepted Answer

A) $5,104,500 
B) $5,229,000 
C) $4,920,000 
D) $4,800,000 
A) $5,104,500 
B) $5,229,000 
C) $4,920,000 
D) $4,800,000

Question 17

Assume that in the base year, 2019, a country's nominal GDP is $10,000 billion. The country has had 5% inflation each year since 2014. Real GDP in 2019 is:

Accepted Answer

A) $10,500 billion. 
B) $10,500 billion 
C) $11,025 billion. 
D) $11,025 billion 
E) $10,000 billion.
F)$10,000 billion
G)$9,500 billion
H)$9,500 billion. 
A) $10,500 billion. 
B) $10,500 billion 
C) $11,025 billion. 
D) $11,025 billion 
E) $10,000 billion.
F)$10,000 billion
G)$9,500 billion
H)$9,500 billion.

Question 18

During 2017 and 2018, nominal GDP in the United States grew by 4.3%, and the rate of inflation was 1.9%. What was the growth rate of real GDP between the two years?

Accepted Answer

A) 2.4% 
B) 6.2% 
C) 1.9% 
D) 4.3% 
A) 2.4% 
B) 6.2% 
C) 1.9% 
D) 4.3%

Question 19

If India's GDP is approximately $2.597 trillion, and the population is 1.339 billion, what is the approximate GDP per person?

Accepted Answer

The answer of If India's GDP is approximately $2.597 trillion,...

Question 20

In 2019, consumer spending was $7,000, government purchases of goods and services was $2,500, and investment spending was $1,500. If GDP for 2019 was $10,300, exports were _____ and imports were _____.

Accepted Answer

A) $800; $100. 
B) $800; $100 
C) $100; $200. 
D) $100; $200 
E) $100; $800
F)$100; $800.
G)$500; $300
H)$500; $300. 
A) $800; $100. 
B) $800; $100 
C) $100; $200. 
D) $100; $200 
E) $100; $800
F)$100; $800.
G)$500; $300
H)$500; $300.

Exam 21: Sizing up the Economy Using Gdp

According to the rule of 70, if GDP per person is growing at a rate of roughly 1.5%, approximately how many years will it take for average income to double?

(Table: Real and Nominal Output) Use Table: Real and Nominal Output. Nominal output in year 4 is: Year Units of Output Price per Unit 1 40 \ 1 2 30 \ 2 3 50 \ 2 4 70 \ 4 5 60 \ 6 6 60 \ 8

(Table: Price and Output Data) Use Table: Price and Output Data. The value of year 2's output in real dollars is: Year Output Price per Unit 1 2 \ 2 2 3 4 3= base period 4 5 4 6 6 5 7 9

How can GDP be total expenditure, total output, and total income at the same time?

In the market for outputs:

Goods that are sold in 2020 but produced in 2018:

This question has two parts. (a) Draw and label a circular flow diagram. (b) What are the key lessons learned from a circular flow diagram?

In the market for inputs:

Macroeconomists:

You own and run a bakery. Last month, you purchased $760 worth of flour, eggs, butter, chocolate, and frosting. Using these inputs, you made and sold 12 large wedding cakes for an average price of $525. How much did GDP change?

Refer to the diagram of the circular flow of income. Based on the diagram, box 2 must be:

According to the rule of 70, if GDP per person is growing at a rate of roughly 3.4%, approximately how many years will it take for average income to double?

The circular flow of income shows that total spending is _____ total income.

During 2000 and 2001, nominal GDP in the United States grew by 3.2%, and the rate of inflation was 2.2%. What was the growth rate of real GDP between the two years?

Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the nominal GDP for this year? Barrels of Oil Sold Actual Price Last year 80,000 \ 60 This year 83,000 \ 63

Assume that in the base year, 2019, a country's nominal GDP is $10,000 billion. The country has had 5% inflation each year since 2014. Real GDP in 2019 is:

During 2017 and 2018, nominal GDP in the United States grew by 4.3%, and the rate of inflation was 1.9%. What was the growth rate of real GDP between the two years?

If India's GDP is approximately $2.597 trillion, and the population is 1.339 billion, what is the approximate GDP per person?

In 2019, consumer spending was $7,000, government purchases of goods and services was $2,500, and investment spending was $1,500. If GDP for 2019 was $10,300, exports were _____ and imports were _____.

The Core Principles of Economics

Demand: Thinking Like a Buyer

Supply: Thinking Like a Seller

Equilibrium: Where Supply Meets Demand

Elasticity: Measuring Responsiveness

When Governments Intervene in Markets

Welfare and Efficiency

Gains From Trade

International Trade

Externalities and Public Goods

Labor Demand and Supply

Wages, Workers, and Management

Inequality, Social Insurance, and Redistribution

Market Structure and Market Power

Entry, Exit, and Long-Run Profitability

Business Strategy

Sophisticated Pricing Strategies

Game Theory and Strategic Choices

Decisions Involving Uncertainty

Decisions With Private Information

Economic Growth

Unemployment

Inflation and Money

Consumption and Saving

Investment

The Financial Sector

International Finance and the Exchange Rate

Business Cycles

IS-MP Analysis: Interest Rates and Output

Phillips Curve

The Fed Model: Linking Interest Rates, Output, and Inflation

Aggregate Demand and Aggregate Supply

Monetary Policy

Government Spending, Taxes, and Fiscal Policy

Appendix: Aggregate Expenditure and the Multiplier

Filters

In 2019, consumer spending was $7,000, government purchases of goods and services was $2,500, and investment spending was $1,500. If GDP for 2019 was $10,300, exports were _ and imports were _.