Question 1

A measure of absolute price changes that excludes changes in energy and food prices is called:

Accepted Answer

A) fringe rate of inflation. 
B) core rate of inflation. 
C) overall inflation. 
D) none of the above. 
A) fringe rate of inflation. 
B) core rate of inflation. 
C) overall inflation. 
D) none of the above.

Question 2

A German tourist visits Disney World in Orlando; the expenditures made by the German tourist are included in U.S.GDP.

Accepted Answer

A) True 
 B)False

Question 3

What are the costs associated with inflation?

Accepted Answer

Inflation can redistribute income betwee

Question 4

Changes in taxes and spending by the executive and legislative branches of a country's government that can be used to either stimulate or restrain the economy are called:

Accepted Answer

A) monetary policy. 
B) fiscal policy. 
C) foreign policy. 
D) exchange rate policy. 
A) monetary policy. 
B) fiscal policy. 
C) foreign policy. 
D) exchange rate policy.

Question 5

Changes in business inventories are not considered part of gross private domestic investment spending.

Accepted Answer

A) True 
 B)False

Question 6

In the value added approach to calculating GDP,counting both the intermediate good and the final product would understate the contribution to GDP.

Accepted Answer

A) True 
 B)False

Question 7

Transfer payments are:

Accepted Answer

A) included in GDP. 
B) not included in GDP. 
C) included in both GDP and GNP. 
D) none of the above. 
A) included in GDP. 
B) not included in GDP. 
C) included in both GDP and GNP. 
D) none of the above.

Question 8

If GDP rises:

Accepted Answer

A) income and production must both fall. 
B) income and production must both rise. 
C) income must rise, but production may rise or fall. 
D) none of the above. 
A) income and production must both fall. 
B) income and production must both rise. 
C) income must rise, but production may rise or fall. 
D) none of the above.

Question 9

Policymakers often use the natural rate of unemployment as a basis in policy formulations.

Accepted Answer

A) True 
 B)False

Question 10

Determine whether each of the following outputs is considered an intermediate good,a final good,or neither for purposes of calculating GDP in the current year.
a.New tires put on a new Corvette at Big O Tire store
b.The net sales price of a home built in 1990 when it is resold in 1997
c.The commission earned by a stock broker on the sale of stock
d.The net price that is paid for 1000 shares of stock in Dell

Accepted Answer

a.Final
b.

Question 11

Why are transfer payments excluded from government expenditure in the national income accounts?

Accepted Answer

Given the definition of GDP,on

Question 12

In year one,the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion,what is real GDP for year two?

Accepted Answer

A) $200 billion. 
B) $100 billion. 
C) $272.73 billion. 
D) $220 billion. 
A) $200 billion. 
B) $100 billion. 
C) $272.73 billion. 
D) $220 billion.

Question 13

Policies adopted by a country's central bank that influence interest rates and credit conditions,which in turn influence consumer and business spending are called:

Accepted Answer

A) monetary policy. 
B) fiscal policy. 
C) foreign policy. 
D) exchange rate policy. 
A) monetary policy. 
B) fiscal policy. 
C) foreign policy. 
D) exchange rate policy.

Question 14

The largest expenditure component in the U.S.is investment expenditures.

Accepted Answer

A) True 
 B)False

Question 15

Jim,a U.S.citizen,works only in Croatia.The value added to production from his employment is:

Accepted Answer

A) included in only Croatian GNP. 
B) included only in U.S. GDP. 
C) included only in U.S. GNP. 
D) not included in either U.S. GDP or U.S. GNP. 
A) included in only Croatian GNP. 
B) included only in U.S. GDP. 
C) included only in U.S. GNP. 
D) not included in either U.S. GDP or U.S. GNP.

Question 16

The largest component of national income is:

Accepted Answer

A) compensation of employees 
B) proprietor's income 
C) rental income 
D) corporate profits 
A) compensation of employees 
B) proprietor's income 
C) rental income 
D) corporate profits

Question 17

A problem with the CPI is the presence of a substitution bias on the behalf of consumers.

Accepted Answer

A) True 
 B)False

Question 18

An economy that has a domestic and a foreign sector is called:

Accepted Answer

A) a mixed economy. 
B) an open economy. 
C) a closed economy. 
D) a command economy. 
A) a mixed economy. 
B) an open economy. 
C) a closed economy. 
D) a command economy.

Question 19

Balance of payments issues are related to the relative value of different countries' currencies and the flow of goods,services,and financial assets among countries.The rate at which one country's currency can be traded for another is called:

Accepted Answer

A) the trade balance. 
B) capital inflows. 
C) capital outflows. 
D) the exchange rate. 
A) the trade balance. 
B) capital inflows. 
C) capital outflows. 
D) the exchange rate.

Question 20

The price of one good in relation to the price of another good is called:

Accepted Answer

A) absolute prices 
B) exchange rate 
C) relative prices 
D) none of the above 
A) absolute prices 
B) exchange rate 
C) relative prices 
D) none of the above

A measure of absolute price changes that excludes changes in energy and food prices is called:

A German tourist visits Disney World in Orlando; the expenditures made by the German tourist are included in U.S.GDP.

What are the costs associated with inflation?

Changes in taxes and spending by the executive and legislative branches of a country's government that can be used to either stimulate or restrain the economy are called:

Changes in business inventories are not considered part of gross private domestic investment spending.

In the value added approach to calculating GDP,counting both the intermediate good and the final product would understate the contribution to GDP.

Transfer payments are:

If GDP rises:

Policymakers often use the natural rate of unemployment as a basis in policy formulations.

Why are transfer payments excluded from government expenditure in the national income accounts?

In year one,the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion,what is real GDP for year two?

Policies adopted by a country's central bank that influence interest rates and credit conditions,which in turn influence consumer and business spending are called:

The largest expenditure component in the U.S.is investment expenditures.

Jim,a U.S.citizen,works only in Croatia.The value added to production from his employment is:

The largest component of national income is:

A problem with the CPI is the presence of a substitution bias on the behalf of consumers.

An economy that has a domestic and a foreign sector is called:

Balance of payments issues are related to the relative value of different countries' currencies and the flow of goods,services,and financial assets among countries.The rate at which one country's currency can be traded for another is called:

The price of one good in relation to the price of another good is called:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Spending by Individuals, firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters

Exam 11: Measuring Macroeconomic Activity

A measure of absolute price changes that excludes changes in energy and food prices is called:

A German tourist visits Disney World in Orlando; the expenditures made by the German tourist are included in U.S.GDP.

What are the costs associated with inflation?

Changes in taxes and spending by the executive and legislative branches of a country's government that can be used to either stimulate or restrain the economy are called:

Changes in business inventories are not considered part of gross private domestic investment spending.

In the value added approach to calculating GDP,counting both the intermediate good and the final product would understate the contribution to GDP.

Transfer payments are:

If GDP rises:

Policymakers often use the natural rate of unemployment as a basis in policy formulations.

Why are transfer payments excluded from government expenditure in the national income accounts?

In year one,the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion,what is real GDP for year two?

Policies adopted by a country's central bank that influence interest rates and credit conditions,which in turn influence consumer and business spending are called:

The largest expenditure component in the U.S.is investment expenditures.

Jim,a U.S.citizen,works only in Croatia.The value added to production from his employment is:

The largest component of national income is:

A problem with the CPI is the presence of a substitution bias on the behalf of consumers.

An economy that has a domestic and a foreign sector is called:

Balance of payments issues are related to the relative value of different countries' currencies and the flow of goods,services,and financial assets among countries.The rate at which one country's currency can be traded for another is called:

The price of one good in relation to the price of another good is called:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Spending by Individuals, firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters