Question 1

In the circular flow diagram, households:

Accepted Answer

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

Question 2

Assume that the real GDP of the United States is approximately $21 trillion and that the population of the United States is approximately 350 million. What is real GDP per capita?

Accepted Answer

A) $35,000 
B) $35,000. 
C) $40,000 
D) $40,000. 
E) $60,000.
F)$60,000
G)Real per capita GDP can't be determined without more information
H)Real per capita GDP can't be determined without more information. 
A) $35,000 
B) $35,000. 
C) $40,000 
D) $40,000. 
E) $60,000.
F)$60,000
G)Real per capita GDP can't be determined without more information
H)Real per capita GDP can't be determined without more information.

Question 3

Answer the following questions regarding big numbers.
(a) The U.S. population is about 330 million people. What is this number in billions?
(b) China's population is about 1.393 billion people. What is this number in millions?
(c) Indonesia's population, measured in thousands, is 268,000 people. What is this number in millions?

Accepted Answer

The answer of Answer the following questions regarding big numbers.
(a)...

Question 4

What is the difference between output from a microeconomic standpoint versus output from a macroeconomic standpoint?

Accepted Answer

A) In microeconomics, output refers to production by businesses, whereas in macroeconomics, output refers to production by government agencies. 
B) In microeconomics, output refers to production by domestic businesses, whereas in macroeconomics, output refers to production by foreign-owned businesses. 
C) In microeconomics, output refers to your monthly output, whereas in macroeconomics, output refers to your annual output. 
D) In microeconomics, output refers to what your individual business produces, whereas in macroeconomics, output refers to the output produced by all the businesses in the economy. 
A) In microeconomics, output refers to production by businesses, whereas in macroeconomics, output refers to production by government agencies. 
B) In microeconomics, output refers to production by domestic businesses, whereas in macroeconomics, output refers to production by foreign-owned businesses. 
C) In microeconomics, output refers to your monthly output, whereas in macroeconomics, output refers to your annual output. 
D) In microeconomics, output refers to what your individual business produces, whereas in macroeconomics, output refers to the output produced by all the businesses in the economy.

Question 5

(Table: Price and Output Data) Use Table: Price and Output Data. Real GDP in year 5 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) $1.29. 
B) $1.29 
C) $16 
D) $16. 
E) $35.
F)$35
G)$63.
H)$63 
A) $1.29. 
B) $1.29 
C) $16 
D) $16. 
E) $35.
F)$35
G)$63.
H)$63

Question 6

(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2018 as the base year, given that the total population was 1,140 in 2018 and 1,380 in 2019, real GDP per capita in 2018 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) $80. 
B) $80 
C) $53. 
D) $53 
E) $60.
F)$60
G)$100
H)$100. 
A) $80. 
B) $80 
C) $53. 
D) $53 
E) $60.
F)$60
G)$100
H)$100.

Question 7

In 2004, Canada's GDP was approximately $1.13 trillion, and its population was about 32 million. What was Canada's approximate GDP per person in 2004?

Accepted Answer

A) $43,500 
B) $35,290 
C) $3,530 
D) $36,160 
A) $43,500 
B) $35,290 
C) $3,530 
D) $36,160

Question 8

(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2018 was: $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { 2018 Output } & \text { 2018 Prices } & \text { 2019 Output } & \text { 2019 Prices } \
\hline \text { Lemonade } & 200 \text { glasses } & \text { \$1 per glass } & 220 \text { glasses } & \text { \$1 per glass } \
\hline \text { Cookies } & 100 \text { cookies } & \text { \$2 per cookie } & 100 \text { cookies } & \text { \$2.25 per cookie } \
\hline
\end{array}$$

Accepted Answer

A) $400 
B) $400. 
C) $420. 
D) $420 
E) $445.
F)$445
G)$820
H)$820. 
A) $400 
B) $400. 
C) $420. 
D) $420 
E) $445.
F)$445
G)$820
H)$820.

Question 9

(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. How much of the increase in nominal GDP between 2018 and 2019 was due to inflation? $$\begin{array} { | l | l | l | l | l | l | } 
\hline \text { Product } & \text { 2018 Output } & \begin{array} { l } 
\text { 2018 Prices } \
\text { (base year) }
\end{array} & \text { Product } & \text { 2019 Output } & \text { 2019 Prices } \
\hline \text { Peanut butter } & 200 \text { units } & \text { \$1 per unit } & \text { Peanut butter } & 250 & \$ 1.10 \text { per unit } \
\hline \text { Jelly } & 100 \text { units } & 2 \text { per unit } & \text { Jelly } & 100 & 2.50 \text { per unit } \
\hline
\end{array}$$

Accepted Answer

A) 31.25% 
B) 31.25%. 
C) 18.75% 
D) 18.75%. 
E) 12.5%
F)12.5%.
G)4%.
H)4% 
A) 31.25% 
B) 31.25%. 
C) 18.75% 
D) 18.75%. 
E) 12.5%
F)12.5%.
G)4%.
H)4%

Question 10

(Table: Per Capita GDP) Use Table: Per Capita GDP. Per capita real GDP in 2019 was: $$\begin{array} { | l | l | l | l | } 
\hline \text { Year } & \text { Nominal GDP } & \text { Price Level } & \text { Population } \
\hline \mathbf { 2 0 1 6 } & \$ 3,000 & 100 & 5 \
\hline \mathbf { 2 0 1 9 } & 8,000 & 200 & 10 \
\hline
\end{array}$$

Accepted Answer

A) $600. 
B) $600 
C) $800. 
D) $800 
E) $300.
F)$300
G)$400.
H)$400 
A) $600. 
B) $600 
C) $800. 
D) $800 
E) $300.
F)$300
G)$400.
H)$400

Question 11

Consider the data shown in the table. Assume that the economy produces only frozen fish. What is the nominal GDP for this year?
$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Tons of Frozen } \
\text { Fish Sold }
\end{array} & \begin{array} { c } 
\text { Actual } \
\text { Price }
\end{array} \
\hline \text { Last year } & 100 & \$ 1,800 \
\hline \text { This year } & 105 & \$ 1,850 \
\hline
\end{array}$$

Accepted Answer

A) $180,000 
B) $191,625 
C) $182,500 
D) $194,250 
A) $180,000 
B) $191,625 
C) $182,500 
D) $194,250

Question 12

The underlying principle of the circular flow diagram is that the flows of money into each sector or market in the economy are _____ those coming out of the sector or market.

Accepted Answer

A) greater than 
B) greater than. 
C) less than 
D) less than. 
E) equal to
F)equal to.
G)not enough information to solve this problem
H)not enough information to solve this problem. 
A) greater than 
B) greater than. 
C) less than 
D) less than. 
E) equal to
F)equal to.
G)not enough information to solve this problem
H)not enough information to solve this problem.

Question 13

When your household buys goods and services, this is called:

Accepted Answer

A) consumption. 
B) business expenditure. 
C) gross domestic product. 
D) disposable income. 
A) consumption. 
B) business expenditure. 
C) gross domestic product. 
D) disposable income.

Question 14

(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. Nominal GDP in 2018 was: $$\begin{array} { | l | l | l | l | l | l | } 
\hline \text { Product } & \text { 2018 Output } & \begin{array} { l } 
\text { 2018 Prices } \
\text { (base year) }
\end{array} & \text { Product } & \text { 2019 Output } & \text { 2019 Prices } \
\hline \text { Peanut butter } & 200 \text { units } & \text { \$1 per unit } & \text { Peanut butter } & 250 & \text { \$1.10 per unit } \
\hline \text { Jelly } & 100 \text { units } & 2 \text { per unit } & \text { Jelly } & 100 & 2.50 \text { per unit } \
\hline
\end{array}$$

Accepted Answer

A) $200. 
B) $200 
C) $400. 
D) $400 
E) $450.
F)$450
G)$525
H)$525. 
A) $200. 
B) $200 
C) $400. 
D) $400 
E) $450.
F)$450
G)$525
H)$525.

Question 15

The topics studied in macroeconomics include:

Accepted Answer

A) inflation. 
B) inflation 
C) unemployment 
D) unemployment. 
E) economic growth
F)economic growth.
G)All of these answers are correct.
H)All of these answers are correct 
A) inflation. 
B) inflation 
C) unemployment 
D) unemployment. 
E) economic growth
F)economic growth.
G)All of these answers are correct.
H)All of these answers are correct

Question 16

Consider the following graphs, which are discussed in the textbook. Focus on the graph that looks at the relationship between GDP per person and life expectancy. What can explain this relationship?

Accepted Answer

A) Higher income per person allows for better health care, sanitation, and nutrition. 
B) Higher income per person leads to a higher mortality rate. 
C) Lower income per person is a result of fewer years of schooling. 
D) As life expectancy increases, GDP per person increases at the same rate. 
A) Higher income per person allows for better health care, sanitation, and nutrition. 
B) Higher income per person leads to a higher mortality rate. 
C) Lower income per person is a result of fewer years of schooling. 
D) As life expectancy increases, GDP per person increases at the same rate.

Question 17

(Table: Smartwatch GDP in Singapore). Use Table: Smartwatch GDP in Singapore. Why is real GDP per capita used as a measure of a country's standard of living? What are some of the limitations of using real GDP as the only measure of a country's quality of life?
​
 $$\begin{array} { | l | l | } 
\hline \text { 2018 Smartwatch Production } & 4,000 \
\hline \begin{array} { l } 
\text { 2018 Smartwatch Prices (base } \
\text { year) }
\end{array} & \$ 500 \
\hline \text { 2018 Population in Singapore } & 10,000 \
\hline \text { 2019 Smartwatch Production } & 4,400 \
\hline \text { 2019 Smartwatch Prices } & \$ 600 \
\hline \text { 2019 Population of Singapore } & 12,000 \
\hline
\end{array}$$

Accepted Answer

The answer of (Table: Smartwatch GDP in Singapore). Use Table:...

Question 18

When the U.S. government buys goods and services, this is called:

Accepted Answer

A) government purchases. 
B) business purchases. 
C) gross domestic product. 
D) consumption. 
A) government purchases. 
B) business purchases. 
C) gross domestic product. 
D) consumption.

Question 19

If an economy's GDP is $3.179 trillion and the population is 25 million, what is the approximate GDP per person?

Accepted Answer

The answer of If an economy's GDP is $3.179 trillion...

Question 20

For each of these scenarios, calculate the inflation rate.
(a) Real GDP growth is -2.2%, and nominal GDP growth is -1.5%.
(b) Real GDP growth is 2.5%, and nominal GDP growth is 5.2%.
(c) Real GDP growth is 2.3%, and nominal GDP growth is 4.2%.

Accepted Answer

The answer of For each of these scenarios, calculate the...

Exam 21: Sizing up the Economy Using Gdp

In the circular flow diagram, households:

Assume that the real GDP of the United States is approximately $21 trillion and that the population of the United States is approximately 350 million. What is real GDP per capita?

What is the difference between output from a microeconomic standpoint versus output from a macroeconomic standpoint?

(Table: Price and Output Data) Use Table: Price and Output Data. Real GDP in year 5 is: Year Output Price per Unit 1 2 \ 2 2 3 4 3= base period 4 5 4 6 6 5 7 9

In 2004, Canada's GDP was approximately $1.13 trillion, and its population was about 32 million. What was Canada's approximate GDP per person in 2004?

(Table: Per Capita GDP) Use Table: Per Capita GDP. Per capita real GDP in 2019 was: Year Nominal GDP Price Level Population \ 3,000 100 5 8,000 200 10

Consider the data shown in the table. Assume that the economy produces only frozen fish. What is the nominal GDP for this year? Tons of Frozen Fish Sold Actual Price Last year 100 \ 1,800 This year 105 \ 1,850

The underlying principle of the circular flow diagram is that the flows of money into each sector or market in the economy are _____ those coming out of the sector or market.

When your household buys goods and services, this is called:

The topics studied in macroeconomics include:

Consider the following graphs, which are discussed in the textbook. Focus on the graph that looks at the relationship between GDP per person and life expectancy. What can explain this relationship?

When the U.S. government buys goods and services, this is called:

If an economy's GDP is $3.179 trillion and the population is 25 million, what is the approximate GDP per person?

For each of these scenarios, calculate the inflation rate. (a) Real GDP growth is -2.2%, and nominal GDP growth is -1.5%. (b) Real GDP growth is 2.5%, and nominal GDP growth is 5.2%. (c) Real GDP growth is 2.3%, and nominal GDP growth is 4.2%.

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