Question 1

Gross domestic product (GDP) is the market value of all goods and services produced in an economy over some time period.

Accepted Answer

A) True 
 B)False

Question 2

Real GDP is at its greatest 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.

Question 3

Suppose the GDP deflator is currently 121 while the equilibrium GDP deflator is 128. In this instance:

Accepted Answer

A)  an excess supply of goods and services will cause the deflator to increase. 
B)  an excess supply of goods and services will cause the deflator to decrease. 
C)  an excess demand for goods and services will cause the deflator to decrease. 
D)  an excess demand for goods and services will cause the deflator to increase. 
A)  an excess supply of goods and services will cause the deflator to increase. 
B)  an excess supply of goods and services will cause the deflator to decrease. 
C)  an excess demand for goods and services will cause the deflator to decrease. 
D)  an excess demand for goods and services will cause the deflator to increase.

Question 4

Government purchases include both government purchases of goods and services and transfer payments.

Accepted Answer

A) True 
 B)False

Question 5

In order to determine how much the capital stock has grown, one must examine:

Accepted Answer

A)  total private domestic investment. 
B)  gross private domestic investment plus the consumption of fixed capital. 
C)  net private domestic investment. 
D)  net private domestic investment plus investment in the United States by other countries. 
A)  total private domestic investment. 
B)  gross private domestic investment plus the consumption of fixed capital. 
C)  net private domestic investment. 
D)  net private domestic investment plus investment in the United States by other countries.

Question 6

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

Accepted Answer

A)  $250. 
B)  $300. 
C)  $480. 
D)  $150. 
A)  $250. 
B)  $300. 
C)  $480. 
D)  $150.

Question 7

Use the following diagram to answer the following questions.
  
-Refer to GDP. In the diagram above, inflation 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 8

During the past two quarters real GDP has fallen by 1.5 percent and the unemployment rate has increased by 1 percentage point. Economists predict that during the next quarter unemployment will rise by another percentage point. The economy is most likely:

Accepted Answer

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

Question 9

Use the following diagram to answer the following questions.
  
-Refer to GDP Deflator. A shift in aggregate demand from AD₁ to AD₂ would most likely by caused by:

Accepted Answer

A)  contractionary monetary policy. 
B)  contractionary fiscal policy. 
C)  expansionary monetary policy. 
D)  a decrease in the general price level. 
A)  contractionary monetary policy. 
B)  contractionary fiscal policy. 
C)  expansionary monetary policy. 
D)  a decrease in the general price level.

Question 10

Intermediate goods are excluded from GDP in order to avoid:

Accepted Answer

A)  double counting. 
B)  understating GDP. 
C)  over counting. 
D)  erratic price fluctuations. 
A)  double counting. 
B)  understating GDP. 
C)  over counting. 
D)  erratic price fluctuations.

Question 11

Suppose that net investment is greater than zero. 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 must also be greater than zero. 
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 must also be greater than zero.

Question 12

Which of the following would be included in GDP?

Accepted Answer

A)  The purchase of Genotech stock. 
B)  The purchase of used car. 
C)  The purchase of a new home. 
D)  A bakery's purchase of flour to make gourmet cookies. 
A)  The purchase of Genotech stock. 
B)  The purchase of used car. 
C)  The purchase of a new home. 
D)  A bakery's purchase of flour to make gourmet cookies.

Question 13

Government expenditures on goods and services is the largest component of GDP.

Accepted Answer

A) True 
 B)False

Question 14

Use the data in the following table to answer the following problems.
  
-Refer to Imports. What is net investment?

Accepted Answer

Net Investment = Gross Investm

Question 15

As the price level rises, interest rates will increase, and investment and consumption will fall.

Accepted Answer

A) True 
 B)False

Question 16

Expansionary fiscal policy will cause a decrease in aggregate demand.

Accepted Answer

A) True 
 B)False

Question 17

Use the data in the following table to answer the following problems.
  
-Refer to Imports. What is GDP?

Accepted Answer

GDP = Consumption + Gross Inve

Question 18

Use the data in the following table to answer the following problems.
  
-Refer to Imports. What are net exports?

Accepted Answer

Net Exports = Export

Question 19

As a result of an increase in government spending:

Accepted Answer

A)  there will be an increase in aggregate quantity demanded. 
B)  there will be a decrease in aggregate quantity demanded. 
C)  there will be an increase in aggregate demand. 
D)  there will be a decrease in aggregate demand. 
A)  there will be an increase in aggregate quantity demanded. 
B)  there will be a decrease in aggregate quantity demanded. 
C)  there will be an increase in aggregate demand. 
D)  there will be a decrease in aggregate demand.

Question 20

The aggregate supply curve:

Accepted Answer

A)  is positively sloped. 
B)  is negatively sloped. 
C)  is vertical. 
D)  has both a positively sloped and a vertical segment. 
A)  is positively sloped. 
B)  is negatively sloped. 
C)  is vertical. 
D)  has both a positively sloped and a vertical segment.

Gross domestic product (GDP) is the market value of all goods and services produced in an economy over some time period.

Real GDP is at its greatest during:

Suppose the GDP deflator is currently 121 while the equilibrium GDP deflator is 128. In this instance:

Government purchases include both government purchases of goods and services and transfer payments.

In order to determine how much the capital stock has grown, one must examine:

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

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

During the past two quarters real GDP has fallen by 1.5 percent and the unemployment rate has increased by 1 percentage point. Economists predict that during the next quarter unemployment will rise by another percentage point. The economy is most likely:

Use the following diagram to answer the following questions. -Refer to GDP Deflator. A shift in aggregate demand from AD₁ to AD₂ would most likely by caused by:

Intermediate goods are excluded from GDP in order to avoid:

Suppose that net investment is greater than zero. We know that:

Which of the following would be included in GDP?

Government expenditures on goods and services is the largest component of GDP.

Use the data in the following table to answer the following problems. -Refer to Imports. What is net investment?

As the price level rises, interest rates will increase, and investment and consumption will fall.

Expansionary fiscal policy will cause a decrease in aggregate demand.

Use the data in the following table to answer the following problems. -Refer to Imports. What is GDP?

Use the data in the following table to answer the following problems. -Refer to Imports. What are net exports?

As a result of an increase in government spending:

The aggregate supply curve:

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

Exam 12: Tracking and Explaining the Macroeconomy

Gross domestic product (GDP) is the market value of all goods and services produced in an economy over some time period.

Real GDP is at its greatest during:

Suppose the GDP deflator is currently 121 while the equilibrium GDP deflator is 128. In this instance:

Government purchases include both government purchases of goods and services and transfer payments.

In order to determine how much the capital stock has grown, one must examine:

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

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

During the past two quarters real GDP has fallen by 1.5 percent and the unemployment rate has increased by 1 percentage point. Economists predict that during the next quarter unemployment will rise by another percentage point. The economy is most likely:

Use the following diagram to answer the following questions. -Refer to GDP Deflator. A shift in aggregate demand from AD₁ to AD₂ would most likely by caused by:

Intermediate goods are excluded from GDP in order to avoid:

Suppose that net investment is greater than zero. We know that:

Which of the following would be included in GDP?

Government expenditures on goods and services is the largest component of GDP.

Use the data in the following table to answer the following problems. -Refer to Imports. What is net investment?

As the price level rises, interest rates will increase, and investment and consumption will fall.

Expansionary fiscal policy will cause a decrease in aggregate demand.

Use the data in the following table to answer the following problems. -Refer to Imports. What is GDP?

Use the data in the following table to answer the following problems. -Refer to Imports. What are net exports?

As a result of an increase in government spending:

The aggregate supply curve:

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