Question 1

In a circular-flow diagram,total income and total expenditures in an economy are:

Accepted Answer

A) equal because firms are ultimately owned by households. 
B) equal only if there is no saving. 
C) equal because every transaction has a buyer and a seller. 
D) always equal because some people's income is not for production. 
A) equal because firms are ultimately owned by households. 
B) equal only if there is no saving. 
C) equal because every transaction has a buyer and a seller. 
D) always equal because some people's income is not for production.

Question 2

If one is interested in comparing the economic well-being of citizens across countries which of the following measures would be the most useful: nominal GDP,real GDP,or real GDP per capita? Explain.

Accepted Answer

Real GDP is preferred over nominal GDP s

Question 3

Distinguish between real and nominal GDP.Which one is a better measure of the business cycle?

Accepted Answer

Nominal GDP is the value of currently pr

Question 4

Changes in the natural rate of unemployment are related to changes in the composition of the labor force and to the changes in the productivity of the economy over time.

Accepted Answer

A) True 
 B)False

Question 5

Macroeconomics studies the following topics:

Accepted Answer

A) national output, the inflation rate, and the trade deficit. 
B) the price of Cisco stock and wage differences. 
C) differences in market structure. 
D) all of the above. 
A) national output, the inflation rate, and the trade deficit. 
B) the price of Cisco stock and wage differences. 
C) differences in market structure. 
D) all of the above.

Question 6

Fiscal policy is determined by the Federal Reserve System.

Accepted Answer

A) True 
 B)False

Question 7

The GDP deflator:

Accepted Answer

A) measures the price changes of a fixed basket of goods and services. 
B) measures the price changes of all final goods and services produced. 
C) measures the price changes of just goods consumed by the household sector. 
D) none of the above. 
A) measures the price changes of a fixed basket of goods and services. 
B) measures the price changes of all final goods and services produced. 
C) measures the price changes of just goods consumed by the household sector. 
D) none of the above.

Question 8

Changes in the amount of goods produced,but not sold in a given year is called:

Accepted Answer

A) inventory investment 
B) business fixed investment 
C) residential fixed investment 
D) consumption 
A) inventory investment 
B) business fixed investment 
C) residential fixed investment 
D) consumption

Question 9

The payments to the factors of production are:

Accepted Answer

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

Question 10

Given the following information,calculate personal consumption expenditures.

Accepted Answer

GDP = C + I + G + F
$5,000 = C

Question 11

Which of the following statistics is the best single measure of overall economic activity?

Accepted Answer

A) The labor force participation rate. 
B) The inflation rate. 
C) GDP. 
D) The trade surplus. 
A) The labor force participation rate. 
B) The inflation rate. 
C) GDP. 
D) The trade surplus.

Question 12

Commodities that typically last three years or more are called:

Accepted Answer

A) durable goods. 
B) nondurable goods. 
C) services. 
D) none of the above. 
A) durable goods. 
B) nondurable goods. 
C) services. 
D) none of the above.

Question 13

The core rate of inflation is a measure of the relative price changes that excludes changes in energy and food prices.

Accepted Answer

A) True 
 B)False

Question 14

Declining real GDP for two quarters in a row is often called a recession.

Accepted Answer

A) True 
 B)False

Question 15

What are the two policy options used to influence the economy?

Accepted Answer

Fiscal policy relies on the executive an

Question 16

Capital flows deal with:

Accepted Answer

A) buying and selling of newly produced final goods and services among countries. 
B) buying and selling of existing real and financial assets among countries. 
C) buying and selling of only domestic final goods and services. 
D) none of the above. 
A) buying and selling of newly produced final goods and services among countries. 
B) buying and selling of existing real and financial assets among countries. 
C) buying and selling of only domestic final goods and services. 
D) none of the above.

Question 17

Zoran,a Croatian citizen,only works in the United States.The value added to production from his employment is:

Accepted Answer

A) included in Croatian GDP. 
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 Croatian GDP. 
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 18

In an open economy firms sell goods and services to:

Accepted Answer

A) households, government, and foreigners. 
B) just households. 
C) just the government. 
D) none of the above. 
A) households, government, and foreigners. 
B) just households. 
C) just the government. 
D) none of the above.

Question 19

Table 11.1
  
-Refer to Table 11.1.What is the value of net exports or the trade balance?

Accepted Answer

A) $300. 
B) -$300. 
C) $1,700. 
D) -$1,700. 
A) $300. 
B) -$300. 
C) $1,700. 
D) -$1,700.

Question 20

If nominal GDP is 100,000 and real GDP is 80,000,the GDP deflator is 115.

Accepted Answer

A) True 
 B)False

In a circular-flow diagram,total income and total expenditures in an economy are:

If one is interested in comparing the economic well-being of citizens across countries which of the following measures would be the most useful: nominal GDP,real GDP,or real GDP per capita? Explain.

Distinguish between real and nominal GDP.Which one is a better measure of the business cycle?

Changes in the natural rate of unemployment are related to changes in the composition of the labor force and to the changes in the productivity of the economy over time.

Macroeconomics studies the following topics:

Fiscal policy is determined by the Federal Reserve System.

The GDP deflator:

Changes in the amount of goods produced,but not sold in a given year is called:

The payments to the factors of production are:

Given the following information,calculate personal consumption expenditures.

Which of the following statistics is the best single measure of overall economic activity?

Commodities that typically last three years or more are called:

The core rate of inflation is a measure of the relative price changes that excludes changes in energy and food prices.

Declining real GDP for two quarters in a row is often called a recession.

What are the two policy options used to influence the economy?

Capital flows deal with:

Zoran,a Croatian citizen,only works in the United States.The value added to production from his employment is:

In an open economy firms sell goods and services to:

Table 11.1 -Refer to Table 11.1.What is the value of net exports or the trade balance?

If nominal GDP is 100,000 and real GDP is 80,000,the GDP deflator is 115.

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

In a circular-flow diagram,total income and total expenditures in an economy are:

If one is interested in comparing the economic well-being of citizens across countries which of the following measures would be the most useful: nominal GDP,real GDP,or real GDP per capita? Explain.

Distinguish between real and nominal GDP.Which one is a better measure of the business cycle?

Changes in the natural rate of unemployment are related to changes in the composition of the labor force and to the changes in the productivity of the economy over time.

Macroeconomics studies the following topics:

Fiscal policy is determined by the Federal Reserve System.

The GDP deflator:

Changes in the amount of goods produced,but not sold in a given year is called:

The payments to the factors of production are:

Given the following information,calculate personal consumption expenditures.

Which of the following statistics is the best single measure of overall economic activity?

Commodities that typically last three years or more are called:

The core rate of inflation is a measure of the relative price changes that excludes changes in energy and food prices.

Declining real GDP for two quarters in a row is often called a recession.

What are the two policy options used to influence the economy?

Capital flows deal with:

Zoran,a Croatian citizen,only works in the United States.The value added to production from his employment is:

In an open economy firms sell goods and services to:

Table 11.1 -Refer to Table 11.1.What is the value of net exports or the trade balance?

If nominal GDP is 100,000 and real GDP is 80,000,the GDP deflator is 115.

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