Question 1

Capital goods are

Accepted Answer

A) not counted in GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods. 
A) not counted in GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods.

Question 2

Historical analysis of real interest rates in the United States shows that

Accepted Answer

A) real interest rates were unusually low in both the 1970s and 1980s. 
B) real interest rates were unusually high in both the 1970s and 1980s. 
C) real interest rates were unusually low in the 1970s and unusually high in the 1980s. 
D) real interest rates were unusually low in the 1980s, spurring the economic growth that occurred during the Reagan administration. 
A) real interest rates were unusually low in both the 1970s and 1980s. 
B) real interest rates were unusually high in both the 1970s and 1980s. 
C) real interest rates were unusually low in the 1970s and unusually high in the 1980s. 
D) real interest rates were unusually low in the 1980s, spurring the economic growth that occurred during the Reagan administration.

Question 3

In one year in the country of Countem,workers earned $4150,proprietor's income was $392,rental income was $20,corporate profits were $683,net interest was $228,taxes on production and imports were $329,business current transfer payments were $12,the current surplus of government enterprises was $3,statistical discrepancy was $28,consumption of fixed capital was $882,factor income received from the rest of the world was $331,and payments of factor income to the rest of the world was $623.Based on these data,compute national income,net national product,gross national product,and gross domestic product.

Accepted Answer

The first eight items sum to national in

Question 4

The expected real interest rate (r)is equal to

Accepted Answer

A) nominal interest rate minus inflation rate. 
B) nominal interest rate minus expected inflation rate. 
C) expected nominal interest rate minus inflation rate. 
D) nominal interest rate plus expected inflation rate. 
A) nominal interest rate minus inflation rate. 
B) nominal interest rate minus expected inflation rate. 
C) expected nominal interest rate minus inflation rate. 
D) nominal interest rate plus expected inflation rate.

Question 5

The consumer price index (CPI)was 180 for 2009 when using 1995 as the base year (1995 = 100).Now suppose we switch and use 2009 as the base year (2009 = 100).What is the CPI for 1995 with the new base year?

Accepted Answer

A) 18.0 
B) 55.6 
C) 80.0 
D) 111.2 
A) 18.0 
B) 55.6 
C) 80.0 
D) 111.2

Question 6

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Accepted Answer

A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater 
A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater

Question 7

Suppose that national saving is $1456 billion,investment is $1945 billion,and private saving is $1590 billion.How much is the current account balance?

Accepted Answer

A) $489 billion 
B) $221 billion 
C) -$221 billion 
D) -$489 billion 
A) $489 billion 
B) $221 billion 
C) -$221 billion 
D) -$489 billion

Question 8

Private saving is defined as

Accepted Answer

A) private disposable income minus consumption. 
B) net national product minus consumption. 
C) private disposable income minus consumption plus interest. 
D) private disposable income minus consumption plus interest plus transfer payments. 
A) private disposable income minus consumption. 
B) net national product minus consumption. 
C) private disposable income minus consumption plus interest. 
D) private disposable income minus consumption plus interest plus transfer payments.

Question 9

To ensure that the fundamental identity of national income accounting holds,changes in inventories are

Accepted Answer

A) treated as part of expenditure. 
B) treated as part of saving. 
C) ignored. 
D) counted as consumption. 
A) treated as part of expenditure. 
B) treated as part of saving. 
C) ignored. 
D) counted as consumption.

Question 10

In 2008,inflation exceeded expected inflation.In 2009,expected inflation exceeded inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Accepted Answer

A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater 
A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater

Question 11

Fred the farmer purchased five new tractors at $20,000 each.Fred sold his old tractors to other farmers for $50,000.The net increase in GDP of these transactions was

Accepted Answer

A) $50,000. 
B) $100,000. 
C) $125,000. 
D) $150,000. 
A) $50,000. 
B) $100,000. 
C) $125,000. 
D) $150,000.

Question 12

The value of a producer's output minus the value of the inputs it purchases from other producers is called the producer's

Accepted Answer

A) surplus. 
B) profit. 
C) value added. 
D) gross product. 
A) surplus. 
B) profit. 
C) value added. 
D) gross product.

Question 13

Nominal government purchases were $2226.2 billion in 2008 and rose to $2372.8 billion in 2009.Real government purchases were $1940.6 for 2008 and $1958.0 for 2009,where 2005 was the base year.Calculate the percent change in the chain-weight price index for government purchases (rounded to the nearest percentage point)from 2008 to 2009.

Accepted Answer

A) 2% 
B) 4% 
C) 6% 
D) 8% 
A) 2% 
B) 4% 
C) 6% 
D) 8%

Question 14

The Fed prefers to focus on inflation based on which price index?

Accepted Answer

A) personal consumption expenditures price index 
B) consumer price index 
C) GDP deflator 
D) producer price index 
A) personal consumption expenditures price index 
B) consumer price index 
C) GDP deflator 
D) producer price index

Question 15

Nominal GDP in 1970 was $1035.6 billion,and in 1980 it was $2784.2 billion.The GDP price index was 30.6 for 1970 and 60.4 for 1980,where 1992 was the base year.Calculate the percent change in real GDP in the decade from 1970 to 1980.Round off to the nearest percentage point.

Accepted Answer

A) 36% 
B) 97% 
C) 136% 
D) 169% 
A) 36% 
B) 97% 
C) 136% 
D) 169%

Question 16

Net national product equals

Accepted Answer

A) gross national product minus statistical discrepancy. 
B) gross national product minus depreciation. 
C) national income minus taxes on production and imports. 
D) national income plus depreciation. 
A) gross national product minus statistical discrepancy. 
B) gross national product minus depreciation. 
C) national income minus taxes on production and imports. 
D) national income plus depreciation.

Question 17

Carl's Computer Center sells computers to business firms.Businesses then use the computers to produce other goods and services.Over the past year,sales representatives were paid $3.5 million,$0.5 million went for rent on the building,$0.5 million went for taxes,$0.5 million was profit for Carl,and $10 million was paid for computers at the wholesale level.What was the firm's total contribution to GDP?

Accepted Answer

$5 million.Note that the $10 m

Question 18

To what extent are homemaking and child-rearing accounted for in the government's GDP accounts?

Accepted Answer

A) Not at all 
B) Only to the extent that they are provided for pay 
C) Only to the extent that taxes are paid on them 
D) All homemaking and child-rearing are accounted for 
A) Not at all 
B) Only to the extent that they are provided for pay 
C) Only to the extent that taxes are paid on them 
D) All homemaking and child-rearing are accounted for

Question 19

GDP differs from GNP because

Accepted Answer

A) GDP = GNP - net factor payments from abroad. 
B) GNP = GDP - net factor payments from abroad. 
C) GDP = GNP - capital consumption allowances. 
D) GNP = GDP - capital consumption allowances. 
A) GDP = GNP - net factor payments from abroad. 
B) GNP = GDP - net factor payments from abroad. 
C) GDP = GNP - capital consumption allowances. 
D) GNP = GDP - capital consumption allowances.

Question 20

If C = $500,I = $150,G = $100,NX = $40,and GNP = $800,how much is NFP?

Accepted Answer

A) -$10 
B) -$5 
C) $5 
D) $10 
A) -$10 
B) -$5 
C) $5 
D) $10

Capital goods are

Historical analysis of real interest rates in the United States shows that

The expected real interest rate (r)is equal to

The consumer price index (CPI)was 180 for 2009 when using 1995 as the base year (1995 = 100).Now suppose we switch and use 2009 as the base year (2009 = 100).What is the CPI for 1995 with the new base year?

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.

Suppose that national saving is $1456 billion,investment is $1945 billion,and private saving is $1590 billion.How much is the current account balance?

Private saving is defined as

To ensure that the fundamental identity of national income accounting holds,changes in inventories are

In 2008,inflation exceeded expected inflation.In 2009,expected inflation exceeded inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.

Fred the farmer purchased five new tractors at $20,000 each.Fred sold his old tractors to other farmers for $50,000.The net increase in GDP of these transactions was

The value of a producer's output minus the value of the inputs it purchases from other producers is called the producer's

The Fed prefers to focus on inflation based on which price index?

Nominal GDP in 1970 was $1035.6 billion,and in 1980 it was $2784.2 billion.The GDP price index was 30.6 for 1970 and 60.4 for 1980,where 1992 was the base year.Calculate the percent change in real GDP in the decade from 1970 to 1980.Round off to the nearest percentage point.

Net national product equals

To what extent are homemaking and child-rearing accounted for in the government's GDP accounts?

GDP differs from GNP because

If C = $500,I = $150,G = $100,NX = $40,and GNP = $800,how much is NFP?

Introduction to Macroeconomics

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 2: The Measurement and Structure of the National Economy

Capital goods are

Historical analysis of real interest rates in the United States shows that

The expected real interest rate (r)is equal to

The consumer price index (CPI)was 180 for 2009 when using 1995 as the base year (1995 = 100).Now suppose we switch and use 2009 as the base year (2009 = 100).What is the CPI for 1995 with the new base year?

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Suppose that national saving is $1456 billion,investment is $1945 billion,and private saving is $1590 billion.How much is the current account balance?

Private saving is defined as

To ensure that the fundamental identity of national income accounting holds,changes in inventories are

In 2008,inflation exceeded expected inflation.In 2009,expected inflation exceeded inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Fred the farmer purchased five new tractors at $20,000 each.Fred sold his old tractors to other farmers for $50,000.The net increase in GDP of these transactions was

The value of a producer's output minus the value of the inputs it purchases from other producers is called the producer's

The Fed prefers to focus on inflation based on which price index?

Nominal GDP in 1970 was $1035.6 billion,and in 1980 it was $2784.2 billion.The GDP price index was 30.6 for 1970 and 60.4 for 1980,where 1992 was the base year.Calculate the percent change in real GDP in the decade from 1970 to 1980.Round off to the nearest percentage point.

Net national product equals

To what extent are homemaking and child-rearing accounted for in the government's GDP accounts?

GDP differs from GNP because

If C = $500,I = $150,G = $100,NX = $40,and GNP = $800,how much is NFP?

Introduction to Macroeconomics

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.

In 2008,inflation exceeded expected inflation.In 2009,expected inflation exceeded inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.