Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Intermediate goods and services are excluded in the calculation of GDP.

Accepted Answer

A) True 
 B)False

Question 3

Many financial analysts use GDP as a measure of the economy's performance.However, GDP has several shortcomings in terms of measuring economic well-being.State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.

Accepted Answer

)GDP does not include the value of non-m

Question 4

An economy with only a domestic 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 5

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 6

What is the difference between inflation and deflation?

Accepted Answer

A) Inflation is a sustained decrease in the price level whereas deflation is a sustained increase in the price level. 
B) Inflation is a sustained increase in the price level whereas deflation is a sustained decrease in the price level. 
C) Inflation is a measure of relative prices whereas deflation is a sustained increase in the price level. 
D) None of the above. 
A) Inflation is a sustained decrease in the price level whereas deflation is a sustained increase in the price level. 
B) Inflation is a sustained increase in the price level whereas deflation is a sustained decrease in the price level. 
C) Inflation is a measure of relative prices whereas deflation is a sustained increase in the price level. 
D) None of the above.

Question 7

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 8

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 9

GDP can increase from one year to the next by:

Accepted Answer

A) increases in prices while quantities of goods and services are constant. 
B) increases in the quantities of goods and services produced while prices remain constant. 
C) both prices and quantities of goods and services increase. 
D) all of the above. 
A) increases in prices while quantities of goods and services are constant. 
B) increases in the quantities of goods and services produced while prices remain constant. 
C) both prices and quantities of goods and services increase. 
D) all of the above.

Question 10

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 11

The price of one currency in terms of another is called an exchange rate.

Accepted Answer

A) True 
 B)False

Question 12

Over time Americans have chosen to cook less at home and dine out more.This change in behavior:

Accepted Answer

A) increases GDP. 
B) reduces GDP. 
C) does not affect GDP. 
D) none of the above 
A) increases GDP. 
B) reduces GDP. 
C) does not affect GDP. 
D) none of the above

Question 13

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 14

Proprietor's income is not considered part of national income.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not included in GDP?

Accepted Answer

A) Unpaid maintenance of your house by your spouse. 
B) Services such as those provided by lawyers and dentists. 
C) The estimated rental (imputed)value of owner-occupied housing. 
D) Production by foreign citizens in the U.S. 
A) Unpaid maintenance of your house by your spouse. 
B) Services such as those provided by lawyers and dentists. 
C) The estimated rental (imputed)value of owner-occupied housing. 
D) Production by foreign citizens in the U.S.

Question 16

The actual unemployment rate exceeds the natural rate of unemployment.What are policymakers concerned about in this situation?

Accepted Answer

If the actual unemployment rate exceeds

Question 17

The labor force in country XYZ is 10,000,000 and the number of employed is 7,000,000.Calculate the number of unemployed and the unemployment rate.

Accepted Answer

Labor force = Number of employed + Numbe

Question 18

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 19

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

Accepted Answer

Fiscal policy relies on the executive an

Question 20

To compute GDP:

Accepted Answer

A) simply sum the number of final goods and services. 
B) sum the cost of producing final goods and services. 
C) use a weighted average by a survey regarding how much people value different goods and services. 
D) sum the market values of final goods and services. 
A) simply sum the number of final goods and services. 
B) sum the cost of producing final goods and services. 
C) use a weighted average by a survey regarding how much people value different goods and services. 
D) sum the market values of final goods and services.

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

Intermediate goods and services are excluded in the calculation of GDP.

Many financial analysts use GDP as a measure of the economy's performance.However, GDP has several shortcomings in terms of measuring economic well-being.State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.

An economy with only a domestic sector is called:

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

What is the difference between inflation and deflation?

Capital flows deal with:

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.

GDP can increase from one year to the next by:

The payments to the factors of production are:

The price of one currency in terms of another is called an exchange rate.

Over time Americans have chosen to cook less at home and dine out more.This change in behavior:

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

Proprietor's income is not considered part of national income.

Which of the following is not included in GDP?

The actual unemployment rate exceeds the natural rate of unemployment.What are policymakers concerned about in this situation?

The labor force in country XYZ is 10,000,000 and the number of employed is 7,000,000.Calculate the number of unemployed and the unemployment rate.

The GDP deflator:

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

To compute GDP:

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

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Exam 11: Measuring Macroeconomic Activity

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

Intermediate goods and services are excluded in the calculation of GDP.

Many financial analysts use GDP as a measure of the economy's performance.However, GDP has several shortcomings in terms of measuring economic well-being.State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.

An economy with only a domestic sector is called:

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

What is the difference between inflation and deflation?

Capital flows deal with:

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.

GDP can increase from one year to the next by:

The payments to the factors of production are:

The price of one currency in terms of another is called an exchange rate.

Over time Americans have chosen to cook less at home and dine out more.This change in behavior:

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

Proprietor's income is not considered part of national income.

Which of the following is not included in GDP?

The actual unemployment rate exceeds the natural rate of unemployment.What are policymakers concerned about in this situation?

The labor force in country XYZ is 10,000,000 and the number of employed is 7,000,000.Calculate the number of unemployed and the unemployment rate.

The GDP deflator:

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

To compute GDP:

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