Question 1

A good that is purchased for final use is:

Accepted Answer

A)  an intermediate good. 
B)  a final good. 
C)  an inventory good. 
D)  an ultimate good. 
A)  an intermediate good. 
B)  a final good. 
C)  an inventory good. 
D)  an ultimate good. B

Question 2

Real GDP is increasing rapidly and unemployment is falling during:

Accepted Answer

A)  the trough of a business cycle. 
B)  the contraction phase of a business cycle. 
C)  the expansion phase of a business cycle. 
D)  the peak of a business cycle. 
A)  the trough of a business cycle. 
B)  the contraction phase of a business cycle. 
C)  the expansion phase of a business cycle. 
D)  the peak of a business cycle. C

Question 3

Expansionary monetary policy refers to:

Accepted Answer

A)  an increase in the growth rate of the money supply. 
B)  a decrease in the growth rate of the money supply. 
C)  a decrease in the growth rate of bank deposits. 
D)  increased taxes. 
A)  an increase in the growth rate of the money supply. 
B)  a decrease in the growth rate of the money supply. 
C)  a decrease in the growth rate of bank deposits. 
D)  increased taxes. A

Question 4

During the past quarter real GDP increased by 2.5 percent and the unemployment rate dropped to 5.40 percent. Economists predict that in the next quarter GDP will grow at a rate of 3.1 percent and the unemployment rate will fall to 5.38 percent. The economy is most likely:

Accepted Answer

A)  at the peak of the business cycle. 
B)  in a contraction phase. 
C)  in an expansion phase. 
D)  at the trough of the business cycle. 
A)  at the peak of the business cycle. 
B)  in a contraction phase. 
C)  in an expansion phase. 
D)  at the trough of the business cycle.

Question 5

Use the following diagram to answer the following questions.
  
-Refer to GDP. In the diagram above, unemployment is likely to be the greatest problem at point:

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 6

Suppose prices for 1998 are, on average, $500. Prices for the base period are $400. The price index is:

Accepted Answer

A)  2.25. 
B)  1.25. 
C)  0.80. 
D)  0.75. 
A)  2.25. 
B)  1.25. 
C)  0.80. 
D)  0.75.

Question 7

Suppose gross investment is $975 billion. If the consumption of fixed capital is $700 billion, then net investment is:

Accepted Answer

A)  $1,675 billion. 
B)  $975 billion. 
C)  $700 billion. 
D)  $275 billion. 
A)  $1,675 billion. 
B)  $975 billion. 
C)  $700 billion. 
D)  $275 billion.

Question 8

Use the following diagram to answer the following questions.
  
-Refer to Diagram 12-1. In the diagram above, the equilibrium level of real output and the equilibrium price level are:

Accepted Answer

A)  GDP₁ and P₁, respectively. 
B)  GDP₂ and P₂, respectively. 
C)  GDP₁ and P₂, respectively. 
D)  GDP₂ and P₁, respectively. 
A)  GDP₁ and P₁, respectively. 
B)  GDP₂ and P₂, respectively. 
C)  GDP₁ and P₂, respectively. 
D)  GDP₂ and P₁, respectively.

Question 9

As the price level increases, consumers increase their borrowing in order to maintain purchasing power. As a result of this increased borrowing, the interest rate rises and investment falls. This is an example of:

Accepted Answer

A)  the interest rate effect. 
B)  the real balance effect. 
C)  the valuation effect of prices. 
D)  the substitution effect. 
A)  the interest rate effect. 
B)  the real balance effect. 
C)  the valuation effect of prices. 
D)  the substitution effect.

Question 10

"When GDP increases, there has been an increase in the nation's output." Is this statement true or False? Defend your answer.

Accepted Answer

This statement would only be correct if

Question 11

Use the following table to answer the following questions.
  
-Refer to Exports. According to the information given, GDP is:

Accepted Answer

A)  $25,800. 
B)  $22,300. 
C)  $14,800. 
D)  $13,800. 
A)  $25,800. 
B)  $22,300. 
C)  $14,800. 
D)  $13,800.

Question 12

Evaluate the following statement. "An increase in wages and salaries can lead to an increase in the price level and a decrease in the nation's output."

Accepted Answer

This statement is correct. The student s

Question 13

Which of the following would not be included in GDP in 1998?

Accepted Answer

A)  A car that is produced in 1997 and sold in 1998. 
B)  A car that is produced and sold in 1998. 
C)  A car that is produced in 1998, but not sold. 
D)  The amount you pay your doctor for health care in 1998. 
A)  A car that is produced in 1997 and sold in 1998. 
B)  A car that is produced and sold in 1998. 
C)  A car that is produced in 1998, but not sold. 
D)  The amount you pay your doctor for health care in 1998.

Question 14

Excluding intermediate goods from GDP causes the measure to understate the value of production.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would be considered a final good?

Accepted Answer

A)  The steel used in the construction of a skyscraper. 
B)  The stereo Ford installs in a new Concord. 
C)  The paper in your textbook. 
D)  A computer you buy for use in your home. 
A)  The steel used in the construction of a skyscraper. 
B)  The stereo Ford installs in a new Concord. 
C)  The paper in your textbook. 
D)  A computer you buy for use in your home.

Question 16

Suppose that net investment is negative. We know that:

Accepted Answer

A)  the nation's capital stock has grown. 
B)  the nation's capital stock has decreased. 
C)  there has been no change in the capital stock. 
D)  the consumption of fixed capital is also negative. 
A)  the nation's capital stock has grown. 
B)  the nation's capital stock has decreased. 
C)  there has been no change in the capital stock. 
D)  the consumption of fixed capital is also negative.

Question 17

Which of the following is included in GDP?

Accepted Answer

A)  the illegal sale of marijuana. 
B)  the money you pay to your baby-sitter that is not reported as income when she files her tax. 
C)  the money you pay a maid to clean your home. 
D)  the value of the time you spend cleaning your home. 
A)  the illegal sale of marijuana. 
B)  the money you pay to your baby-sitter that is not reported as income when she files her tax. 
C)  the money you pay a maid to clean your home. 
D)  the value of the time you spend cleaning your home.

Question 18

Use the information in the following table to calculate GDP.

Accepted Answer

GDP is the value of final goods and serv

Question 19

A change in technology will cause:

Accepted Answer

A)  a movement along the positively sloped portion of the aggregate supply curve. 
B)  the vertical portion of the aggregate supply curve to shift. 
C)  the positively sloped portion of the aggregate supply curve to shift. 
D)  the entire aggregate supply curve to shift. 
A)  a movement along the positively sloped portion of the aggregate supply curve. 
B)  the vertical portion of the aggregate supply curve to shift. 
C)  the positively sloped portion of the aggregate supply curve to shift. 
D)  the entire aggregate supply curve to shift.

Question 20

Sugar sold to Betty Crocker is excluded from GDP because:

Accepted Answer

A)  it is an intermediate good. 
B)  double counting would occur if it were included. 
C)  it is an input used to produce a final product. 
D)  All of the above. 
A)  it is an intermediate good. 
B)  double counting would occur if it were included. 
C)  it is an input used to produce a final product. 
D)  All of the above.

A good that is purchased for final use is:

Real GDP is increasing rapidly and unemployment is falling during:

Expansionary monetary policy refers to:

During the past quarter real GDP increased by 2.5 percent and the unemployment rate dropped to 5.40 percent. Economists predict that in the next quarter GDP will grow at a rate of 3.1 percent and the unemployment rate will fall to 5.38 percent. The economy is most likely:

Use the following diagram to answer the following questions. -Refer to GDP. In the diagram above, unemployment is likely to be the greatest problem at point:

Suppose prices for 1998 are, on average, $500. Prices for the base period are $400. The price index is:

Suppose gross investment is $975 billion. If the consumption of fixed capital is $700 billion, then net investment is:

Use the following diagram to answer the following questions. -Refer to Diagram 12-1. In the diagram above, the equilibrium level of real output and the equilibrium price level are:

As the price level increases, consumers increase their borrowing in order to maintain purchasing power. As a result of this increased borrowing, the interest rate rises and investment falls. This is an example of:

"When GDP increases, there has been an increase in the nation's output." Is this statement true or False? Defend your answer.

Use the following table to answer the following questions. -Refer to Exports. According to the information given, GDP is:

Evaluate the following statement. "An increase in wages and salaries can lead to an increase in the price level and a decrease in the nation's output."

Which of the following would not be included in GDP in 1998?

Excluding intermediate goods from GDP causes the measure to understate the value of production.

Which of the following would be considered a final good?

Suppose that net investment is negative. We know that:

Which of the following is included in GDP?

Use the information in the following table to calculate GDP.

A change in technology will cause:

Sugar sold to Betty Crocker is excluded from GDP because:

Economic Growth: an Introduction to Scarcity and Choice

An Introduction to Economic Systems and the Workings of the Price System

Competitive Markets and Government Policy: Agriculture

Efficiency in Resource Allocation: How Much Do We Have How Much Do We Want

Market Power: Does It Help or Hurt the Economy

Air Pollution: Balancing Benefits and Costs

Health Care: How Much for Whom

Crime and Drugs: a Modern Dilemma

College Education: Is It Worth the Cost

Educational Reform: the Role of Incentives and Choice

Poverty: Old and New Approaches to a Persistent Problem

Unemployment: the Legacy of Recession, Technological Change, and Free Choice

Inflation: a Monetary Phenomenon

Sustained Budget Deficits: Is This Any Way to Run a Government

Social Security: Leading Issues and Approaches to Reform

International Trade: Beneficial, but Controversial

Financing Trade and the Trade Deficit

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Exam 12: Tracking and Explaining the Macroeconomy

A good that is purchased for final use is:

Real GDP is increasing rapidly and unemployment is falling during:

Expansionary monetary policy refers to:

During the past quarter real GDP increased by 2.5 percent and the unemployment rate dropped to 5.40 percent. Economists predict that in the next quarter GDP will grow at a rate of 3.1 percent and the unemployment rate will fall to 5.38 percent. The economy is most likely:

Use the following diagram to answer the following questions. -Refer to GDP. In the diagram above, unemployment is likely to be the greatest problem at point:

Suppose prices for 1998 are, on average, $500. Prices for the base period are $400. The price index is:

Suppose gross investment is $975 billion. If the consumption of fixed capital is $700 billion, then net investment is:

Use the following diagram to answer the following questions. -Refer to Diagram 12-1. In the diagram above, the equilibrium level of real output and the equilibrium price level are:

As the price level increases, consumers increase their borrowing in order to maintain purchasing power. As a result of this increased borrowing, the interest rate rises and investment falls. This is an example of:

"When GDP increases, there has been an increase in the nation's output." Is this statement true or False? Defend your answer.

Use the following table to answer the following questions. -Refer to Exports. According to the information given, GDP is:

Evaluate the following statement. "An increase in wages and salaries can lead to an increase in the price level and a decrease in the nation's output."

Which of the following would not be included in GDP in 1998?

Excluding intermediate goods from GDP causes the measure to understate the value of production.

Which of the following would be considered a final good?

Suppose that net investment is negative. We know that:

Which of the following is included in GDP?

Use the information in the following table to calculate GDP.

A change in technology will cause:

Sugar sold to Betty Crocker is excluded from GDP because:

Economic Growth: an Introduction to Scarcity and Choice

An Introduction to Economic Systems and the Workings of the Price System

Competitive Markets and Government Policy: Agriculture

Efficiency in Resource Allocation: How Much Do We Have How Much Do We Want

Market Power: Does It Help or Hurt the Economy

Air Pollution: Balancing Benefits and Costs

Health Care: How Much for Whom

Crime and Drugs: a Modern Dilemma

College Education: Is It Worth the Cost

Educational Reform: the Role of Incentives and Choice

Poverty: Old and New Approaches to a Persistent Problem

Unemployment: the Legacy of Recession, Technological Change, and Free Choice

Inflation: a Monetary Phenomenon

Sustained Budget Deficits: Is This Any Way to Run a Government

Social Security: Leading Issues and Approaches to Reform

International Trade: Beneficial, but Controversial

Financing Trade and the Trade Deficit

Filters