Question 1

To study a macroeconomy,we calculate aggregate quantities in real terms because

Accepted Answer

A)  we want to get rid of the illusion of price effects. 
B)  we want to concentrate on the production of real goods, as opposed to services. 
C)  it is then easier to take logarithms. 
D)  it is the only way to reconcile the three approaches to measuring GDP. 
A)  we want to get rid of the illusion of price effects. 
B)  we want to concentrate on the production of real goods, as opposed to services. 
C)  it is then easier to take logarithms. 
D)  it is the only way to reconcile the three approaches to measuring GDP.

Question 2

Approaches to measuring GDP include all of the following except the

Accepted Answer

A)  cost approach. 
B)  product approach. 
C)  income approach. 
D)  expenditure approach. 
A)  cost approach. 
B)  product approach. 
C)  income approach. 
D)  expenditure approach.

Question 3

NIPA means

Accepted Answer

A)  New Income and Price Accounting. 
B)  National Investment and Productivity Approach. 
C)  Neutral Increase of Production Allocation. 
D)  National Income and Product Accounts. 
A)  New Income and Price Accounting. 
B)  National Investment and Productivity Approach. 
C)  Neutral Increase of Production Allocation. 
D)  National Income and Product Accounts.

Question 4

An intermediate good is a good that is

Accepted Answer

A)  neither normal nor inferior. 
B)  used as an input. 
C)  a stand-in for all goods. 
D)  is tangible good that includes substantial services. 
A)  neither normal nor inferior. 
B)  used as an input. 
C)  a stand-in for all goods. 
D)  is tangible good that includes substantial services.

Question 5

When we try to measure real GDP and the price level,if we underestimate the growth in real GDP,we will

Accepted Answer

A)  always underestimate the rate of inflation. 
B)  sometimes underestimate the rate of inflation. 
C)  always overestimate the rate of inflation. 
D)  sometimes overestimate the rate of inflation. 
A)  always underestimate the rate of inflation. 
B)  sometimes underestimate the rate of inflation. 
C)  always overestimate the rate of inflation. 
D)  sometimes overestimate the rate of inflation.

Question 6

Suppose we know the following about a lawn repair business: wages $15,000,profits $4,000,tax $ 3,000,parts $ 9,000. What is the contribution to GDP of this business using the product approach?

Accepted Answer

A)  $31,000. 
B)  $27,000. 
C)  $26,000. 
D)  $22,000. 
A)  $31,000. 
B)  $27,000. 
C)  $26,000. 
D)  $22,000.

Question 7

Suppose we have the following information about a car manufacturer: car sales $1000M,steal purchases $600M,wages $300M,interest on business loans $50M,and profits $50M. What is its contribution to GDP using the product approach?

Accepted Answer

A)  $1000M 
B)  $600M 
C)  $400M 
D)  $350M 
A)  $1000M 
B)  $600M 
C)  $400M 
D)  $350M

Question 8

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below.

-What is the real GDP in year 2 using base year 2?

Accepted Answer

A)  $418. 
B)  $300. 
C)  $360. 
D)  $338. 
A)  $418. 
B)  $300. 
C)  $360. 
D)  $338.

Question 9

Inventory investment consists of

Accepted Answer

A)  construction expenditures, raw materials, and inventories of finished goods. 
B)  goods in process, raw materials, and purchases of office machinery. 
C)  raw materials, goods in process, and construction expenditures. 
D)  inventories of finished goods, goods in process, and raw materials. 
A)  construction expenditures, raw materials, and inventories of finished goods. 
B)  goods in process, raw materials, and purchases of office machinery. 
C)  raw materials, goods in process, and construction expenditures. 
D)  inventories of finished goods, goods in process, and raw materials.

Question 10

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below.

-What is the real GDP in year 1 using base year 2?

Accepted Answer

A)  $418. 
B)  $300. 
C)  $360. 
D)  $338. 
A)  $418. 
B)  $300. 
C)  $360. 
D)  $338.

Question 11

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below.

-Suppose that Year 1 is the base year. The CPI for Year 2 is approximately

Accepted Answer

A)  100.0. 
B)  135.0. 
C)  170.0. 
D)  240.0. 
A)  100.0. 
B)  135.0. 
C)  170.0. 
D)  240.0.

Question 12

If real GDP grows faster than nominal GDP,it is a sign that

Accepted Answer

A)  inflation is negative. 
B)  there is no inflation. 
C)  there is inflation, but little. 
D)  there is galloping inflation. 
A)  inflation is negative. 
B)  there is no inflation. 
C)  there is inflation, but little. 
D)  there is galloping inflation.

Question 13

Suppose we have the following information about a shoe manufacturer: wages $100,000,sales $500,000,taxes $50,000,loan interest $10,000,leather purchases $170,000,rubber purchases $130,000. What is the contribution of this manufacturer to GDP using the income approach?

Accepted Answer

A)  $500,000. 
B)  $300,000. 
C)  $200,000. 
D)  $40,000. 
A)  $500,000. 
B)  $300,000. 
C)  $200,000. 
D)  $40,000.

Question 14

The product approach to measuring GDP values government production at

Accepted Answer

A)  market prices. 
B)  its cost of production. 
C)  its estimated value to society. 
D)  the total amount of taxes it collects. 
A)  market prices. 
B)  its cost of production. 
C)  its estimated value to society. 
D)  the total amount of taxes it collects.

Question 15

To compute a monthly consumer price index,we need

Accepted Answer

A)  data about consumption habits in every month. 
B)  data about item prices every month. 
C)  fixed exchange rates. 
D)  the GDP or GNP deflator. 
A)  data about consumption habits in every month. 
B)  data about item prices every month. 
C)  fixed exchange rates. 
D)  the GDP or GNP deflator.

Question 16

The expenditure components of GDP include all of the following except

Accepted Answer

A)  consumption. 
B)  investment. 
C)  net exports. 
D)  net factor payments. 
A)  consumption. 
B)  investment. 
C)  net exports. 
D)  net factor payments.

Question 17

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below.

-Year 1 nominal GDP is

Accepted Answer

A)  $200. 
B)  $270. 
C)  $310. 
D)  $390. 
A)  $200. 
B)  $270. 
C)  $310. 
D)  $390.

Question 18

GDP may inaccurately measure the value of aggregate output because it may not properly account for

Accepted Answer

A)  production in the underground economy and the true value of government production. 
B)  the true value of government production and the proper value of purchases and sales of used goods. 
C)  the proper value of purchases and sales of used goods and depreciation of consumer durables. 
D)  the depreciation of consumer durables and production in the underground economy. 
A)  production in the underground economy and the true value of government production. 
B)  the true value of government production and the proper value of purchases and sales of used goods. 
C)  the proper value of purchases and sales of used goods and depreciation of consumer durables. 
D)  the depreciation of consumer durables and production in the underground economy.

Question 19

Acme Steel Co. produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal,which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's profit is

Accepted Answer

A)  $0. 
B)  $2,000. 
C)  $3,000. 
D)  $15,000. 
A)  $0. 
B)  $2,000. 
C)  $3,000. 
D)  $15,000.

Question 20

Suppose that in a given country in a given year,GNP equals $2,000,investment expenditures equal $200,government expenditures equal $150,and the current account surplus equals $50. Consumption expenditures therefore equal

Accepted Answer

A)  $1,000. 
B)  $1,200. 
C)  $1,400. 
D)  $1,600. 
A)  $1,000. 
B)  $1,200. 
C)  $1,400. 
D)  $1,600.

To study a macroeconomy,we calculate aggregate quantities in real terms because

Approaches to measuring GDP include all of the following except the

NIPA means

An intermediate good is a good that is

When we try to measure real GDP and the price level,if we underestimate the growth in real GDP,we will

Suppose we know the following about a lawn repair business: wages $15,000,profits $4,000,tax $ 3,000,parts $ 9,000. What is the contribution to GDP of this business using the product approach?

Suppose we have the following information about a car manufacturer: car sales $1000M,steal purchases $600M,wages $300M,interest on business loans $50M,and profits $50M. What is its contribution to GDP using the product approach?

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -What is the real GDP in year 2 using base year 2?

Inventory investment consists of

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -What is the real GDP in year 1 using base year 2?

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -Suppose that Year 1 is the base year. The CPI for Year 2 is approximately

If real GDP grows faster than nominal GDP,it is a sign that

Suppose we have the following information about a shoe manufacturer: wages $100,000,sales $500,000,taxes $50,000,loan interest $10,000,leather purchases $170,000,rubber purchases $130,000. What is the contribution of this manufacturer to GDP using the income approach?

The product approach to measuring GDP values government production at

To compute a monthly consumer price index,we need

The expenditure components of GDP include all of the following except

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 1 nominal GDP is

GDP may inaccurately measure the value of aggregate output because it may not properly account for

Acme Steel Co. produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal,which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's profit is

Suppose that in a given country in a given year,GNP equals $2,000,investment expenditures equal $200,government expenditures equal $150,and the current account surplus equals $50. Consumption expenditures therefore equal

Introduction

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 2: Measurement

To study a macroeconomy,we calculate aggregate quantities in real terms because

Approaches to measuring GDP include all of the following except the

NIPA means

An intermediate good is a good that is

When we try to measure real GDP and the price level,if we underestimate the growth in real GDP,we will

Suppose we know the following about a lawn repair business: wages $15,000,profits $4,000,tax $ 3,000,parts $ 9,000. What is the contribution to GDP of this business using the product approach?

Suppose we have the following information about a car manufacturer: car sales $1000M,steal purchases $600M,wages $300M,interest on business loans $50M,and profits $50M. What is its contribution to GDP using the product approach?

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -What is the real GDP in year 2 using base year 2?

Inventory investment consists of

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -What is the real GDP in year 1 using base year 2?

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -Suppose that Year 1 is the base year. The CPI for Year 2 is approximately

If real GDP grows faster than nominal GDP,it is a sign that

Suppose we have the following information about a shoe manufacturer: wages $100,000,sales $500,000,taxes $50,000,loan interest $10,000,leather purchases $170,000,rubber purchases $130,000. What is the contribution of this manufacturer to GDP using the income approach?

The product approach to measuring GDP values government production at

To compute a monthly consumer price index,we need

The expenditure components of GDP include all of the following except

For the following questions, suppose an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 1 nominal GDP is

GDP may inaccurately measure the value of aggregate output because it may not properly account for

Acme Steel Co. produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal,which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's profit is

Suppose that in a given country in a given year,GNP equals $2,000,investment expenditures equal $200,government expenditures equal $150,and the current account surplus equals $50. Consumption expenditures therefore equal

Introduction

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters