Question 1

What is the definition of the term, "labor share"?

Accepted Answer

A)  The share of labor costs in a firm's total costs. 
B)  The share of labor income in national income. 
C)  The share of federal taxes paid by employees rather than by capitalists. 
D)  The share in total business revenues that employees receive. 
A)  The share of labor costs in a firm's total costs. 
B)  The share of labor income in national income. 
C)  The share of federal taxes paid by employees rather than by capitalists. 
D)  The share in total business revenues that employees receive. B

Question 2

What agency tracks aggregate activity in the U.S. economy?

Accepted Answer

A)  The Bureau of Labor Statistics 
B)  The Office of Management and Budget 
C)  The Supreme Court 
D)  The Department of Commerce 
A)  The Bureau of Labor Statistics 
B)  The Office of Management and Budget 
C)  The Supreme Court 
D)  The Department of Commerce D

Question 3

Which of the following would be classified as Consumption spending?

Accepted Answer

A)  New plant and equipment bought by Ford Motor Company in Michigan. 
B)  Money spent by the U.S. government to provide assistance to flood victims. 
C)  Money spent by individuals for food and clothing. 
D)  Money spent by state and local governments on new school building. 
A)  New plant and equipment bought by Ford Motor Company in Michigan. 
B)  Money spent by the U.S. government to provide assistance to flood victims. 
C)  Money spent by individuals for food and clothing. 
D)  Money spent by state and local governments on new school building. C

Question 4

National or aggregate income includes

Accepted Answer

A)  profits, rent, and interest income. 
B)  wages, salaries, and profits. 
C)  wages, salaries, rent, and interest income. 
D)  wages, salaries, rent, profits, and interest income. 
A)  profits, rent, and interest income. 
B)  wages, salaries, and profits. 
C)  wages, salaries, rent, and interest income. 
D)  wages, salaries, rent, profits, and interest income.

Question 5

A corporation is defined as

Accepted Answer

A)  a business enterprise with significant monopoly power. 
B)  a business enterprise owned by a single individual. 
C)  a business enterprise owned by the government. 
D)  a business enterprise with many investors each owning a share of the assets. 
A)  a business enterprise with significant monopoly power. 
B)  a business enterprise owned by a single individual. 
C)  a business enterprise owned by the government. 
D)  a business enterprise with many investors each owning a share of the assets.

Question 6

Holding everything else constant, if exports are greater than imports

Accepted Answer

A)  there is a net inflow of money from foreign countries. 
B)  there is a net outflow of money to foreign countries. 
C)  there is a net inflow of goods from foreign countries. 
D)  there is a trade deficit. 
A)  there is a net inflow of money from foreign countries. 
B)  there is a net outflow of money to foreign countries. 
C)  there is a net inflow of goods from foreign countries. 
D)  there is a trade deficit.

Question 7

What is replacement investment?

Accepted Answer

A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year. 
A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year.

Question 8

Assume that gross investment is $1.6 trillion and depreciation is $2.1 trillion. How much is new net investment?

Accepted Answer

A)  $0.4 trillion. 
B)  - $ 0.4 trillion. 
C)  $3.7 trillion. 
D)  $1.6 trillion. 
A)  $0.4 trillion. 
B)  - $ 0.4 trillion. 
C)  $3.7 trillion. 
D)  $1.6 trillion.

Question 9

What is included in employee compensation?

Accepted Answer

A)  Wages, salaries, commissions, and interest. 
B)  Wages, salaries, bonuses, commissions, and fringe benefits. 
C)  Wages and salaries only. 
D)  Wages, salaries, and bonuses but not fringe benefits. 
A)  Wages, salaries, commissions, and interest. 
B)  Wages, salaries, bonuses, commissions, and fringe benefits. 
C)  Wages and salaries only. 
D)  Wages, salaries, and bonuses but not fringe benefits.

Question 10

Gross Domestic Product consists of spending on

Accepted Answer

A)  Consumption, Investment, Government spending, and Net Exports. 
B)  Consumption, Investment, Government spending on goods and services, and Transfer payments. 
C)  Consumption, Investment, Government spending, and Imports. 
D)  Consumption, Depreciation, Government spending, and Employee compensation. 
A)  Consumption, Investment, Government spending, and Net Exports. 
B)  Consumption, Investment, Government spending on goods and services, and Transfer payments. 
C)  Consumption, Investment, Government spending, and Imports. 
D)  Consumption, Depreciation, Government spending, and Employee compensation.

Question 11

A "progressive" tax is

Accepted Answer

A)  one that is proposed by a progressive economist. 
B)  one in which the percentage rises as the level of income rises. 
C)  one in which the amount rises as the level of consumption rises. 
D)  one in which the percentage rises as the level of wealth rises. 
A)  one that is proposed by a progressive economist. 
B)  one in which the percentage rises as the level of income rises. 
C)  one in which the amount rises as the level of consumption rises. 
D)  one in which the percentage rises as the level of wealth rises.

Question 12

Assume that there is a devastating wildfire in Northern California. Putting out the fire is very expensive, and many homes have to be rebuilt. How does this affect GDP?

Accepted Answer

A)  GDP will go up. 
B)  GDP will go down. 
C)  GDP will be unaffected. 
D)  It depends on whether the government borrowed money to pay for the cost of containing the fire. 
A)  GDP will go up. 
B)  GDP will go down. 
C)  GDP will be unaffected. 
D)  It depends on whether the government borrowed money to pay for the cost of containing the fire.

Question 13

What is gross investment?

Accepted Answer

A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year. 
A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year.

Question 14

Inflation is defined as

Accepted Answer

A)  an increase in the quantity of goods in the consumer's basket. 
B)  an increase in the level of GDP. 
C)  an increase in the price of an important good like gasoline. 
D)  an increase in the overall level of prices. 
A)  an increase in the quantity of goods in the consumer's basket. 
B)  an increase in the level of GDP. 
C)  an increase in the price of an important good like gasoline. 
D)  an increase in the overall level of prices.

Question 15

When exports are less than imports, the United States has

Accepted Answer

A)  a trade surplus. 
B)  a trade deficit. 
C)  an income surplus. 
D)  a government deficit. 
A)  a trade surplus. 
B)  a trade deficit. 
C)  an income surplus. 
D)  a government deficit.

Question 16

What is disposable personal income?

Accepted Answer

A)  Income that is spent rather than saved. 
B)  Income after taxes. 
C)  Income not including fringe benefits. 
D)  Income received from the government. 
A)  Income that is spent rather than saved. 
B)  Income after taxes. 
C)  Income not including fringe benefits. 
D)  Income received from the government.

Question 17

A government transfer payment is defined as

Accepted Answer

A)  when the government engages private contractors to provide a service previously performed by government employees. 
B)  when the government borrows funds from private investors. 
C)  when the government pays money to individuals that is not a payment for a current good or service. 
D)  when the government purchases goods and services from the business sector. 
A)  when the government engages private contractors to provide a service previously performed by government employees. 
B)  when the government borrows funds from private investors. 
C)  when the government pays money to individuals that is not a payment for a current good or service. 
D)  when the government purchases goods and services from the business sector.

Question 18

Which of the following would be considered a transfer payment?

Accepted Answer

A)  Purchases of oil for the strategic petroleum reserve. 
B)  Purchases of military goods for the army. 
C)  Payments to a private subcontractor providing services to the military. 
D)  Payments to wheat farmers when wheat prices fall below $3.80 per bushel. 
A)  Purchases of oil for the strategic petroleum reserve. 
B)  Purchases of military goods for the army. 
C)  Payments to a private subcontractor providing services to the military. 
D)  Payments to wheat farmers when wheat prices fall below $3.80 per bushel.

Question 19

What is net investment?

Accepted Answer

A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year. 
A)  Investment in additional buildings and equipment to expand the capital beyond the present level. 
B)  Investment in capital goods that have worn out or become obsolete. 
C)  The dollar value of worn-out plants and equipment. 
D)  The total value of all capital goods produced in a year.

Question 20

Mary has been working as a housekeeper for John for 6 months at a salary of $1,000 per month. John and Mary get married, and Mary continues to take care of the house. How does this affect GDP?

Accepted Answer

A)  GDP will be unaffected, since Mary is doing the same thing as always. 
B)  GDP will go up, since Mary will have more income now. 
C)  GDP will go down, since Mary's housekeeping chores will be unpaid. 
D)  It depends on whether John gives Mary any money as an allowance. 
A)  GDP will be unaffected, since Mary is doing the same thing as always. 
B)  GDP will go up, since Mary will have more income now. 
C)  GDP will go down, since Mary's housekeeping chores will be unpaid. 
D)  It depends on whether John gives Mary any money as an allowance.

What is the definition of the term, "labor share"?

What agency tracks aggregate activity in the U.S. economy?

Which of the following would be classified as Consumption spending?

National or aggregate income includes

A corporation is defined as

Holding everything else constant, if exports are greater than imports

What is replacement investment?

Assume that gross investment is $1.6 trillion and depreciation is $2.1 trillion. How much is new net investment?

What is included in employee compensation?

Gross Domestic Product consists of spending on

A "progressive" tax is

Assume that there is a devastating wildfire in Northern California. Putting out the fire is very expensive, and many homes have to be rebuilt. How does this affect GDP?

What is gross investment?

Inflation is defined as

When exports are less than imports, the United States has

What is disposable personal income?

A government transfer payment is defined as

Which of the following would be considered a transfer payment?

What is net investment?

Mary has been working as a housekeeper for John for 6 months at a salary of $1,000 per month. John and Mary get married, and Mary continues to take care of the house. How does this affect GDP?

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Business Cycles

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: How to Stimulate the Economy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters

Exam 4: National Income Accounting

What is the definition of the term, "labor share"?

What agency tracks aggregate activity in the U.S. economy?

Which of the following would be classified as Consumption spending?

National or aggregate income includes

A corporation is defined as

Holding everything else constant, if exports are greater than imports

What is replacement investment?

Assume that gross investment is $1.6 trillion and depreciation is $2.1 trillion. How much is new net investment?

What is included in employee compensation?

Gross Domestic Product consists of spending on

A "progressive" tax is

Assume that there is a devastating wildfire in Northern California. Putting out the fire is very expensive, and many homes have to be rebuilt. How does this affect GDP?

What is gross investment?

Inflation is defined as

When exports are less than imports, the United States has

What is disposable personal income?

A government transfer payment is defined as

Which of the following would be considered a transfer payment?

What is net investment?

Mary has been working as a housekeeper for John for 6 months at a salary of $1,000 per month. John and Mary get married, and Mary continues to take care of the house. How does this affect GDP?

What Is Macroeconomics and the Evolution of Capitalism

The Classical View of the Macro-Economy

The Keynesian Revolution

Classical and Keynesian Graphical Analysis

Introduction to Economic Growth

Introduction to Business Cycles

Investment and Profit, and the Multiplier

Consumer Spending, and Credit and Interest

Housing Bubble, Financial Crisis, and Government Spending, Taxes, and Deficits

The Trade Gap

Business Cycles

Globalization and the Spread of Instability

Inflation

Monetary Policy, Financial Regulation, and Debates Over Monetary Policy

Fiscal Policy: How to Stimulate the Economy

Fiscal Policy: Austerians and Deficit Hawks V Stimulus

A Road to Full Employment

Filters