Question 1

The expenditure approach to computing GDP measures

Accepted Answer

A)  U.S.spending on all goods. 
B)  U.S.spending on only U.S.goods. 
C)  U.S.and foreign spending on only U.S.goods 
D)  only foreign spending on foreign goods. 
A)  U.S.spending on all goods. 
B)  U.S.spending on only U.S.goods. 
C)  U.S.and foreign spending on only U.S.goods 
D)  only foreign spending on foreign goods.

Question 2

A transfer payment is a payment to a person that is made in return for goods and services supplied.

Accepted Answer

A) True 
 B)False

Question 3

To macroeconomists,investment is mainly the purchases of goods and services

Accepted Answer

A)  by businesses. 
B)  to hold as wealth,such as gold coins or art. 
C)  to hold as wealth,such as stocks and bonds. 
D)  by the government. 
E)  ​b and c 
A)  by businesses. 
B)  to hold as wealth,such as gold coins or art. 
C)  to hold as wealth,such as stocks and bonds. 
D)  by the government. 
E)  ​b and c

Question 4

-Refer to Exhibit 7-5.During year 3,Country Z experienced economic _____________ and _________________.

Accepted Answer

A)  decline; deflation (falling price level) 
B)  growth; inflation (rising price level) 
C)  growth; deflation (falling price level) 
D)  decline; inflation (rising price level) 
A)  decline; deflation (falling price level) 
B)  growth; inflation (rising price level) 
C)  growth; deflation (falling price level) 
D)  decline; inflation (rising price level)

Question 5

The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

Accepted Answer

A) True 
 B)False

Question 6

Look at the following data: GDP = $3,590 billion; consumption = $1,820 billion; exports = $450 billion; investment = $1,250 billion; government purchases = $900 billion.Imports is equal to __________ billion.

Accepted Answer

A)  $830 
B)  $1,460 
C)  -$830 
D)  $1,240 
E)  none of the above 
A)  $830 
B)  $1,460 
C)  -$830 
D)  $1,240 
E)  none of the above

Question 7

In the definition of GDP,the words "total market value" refer to total

Accepted Answer

A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d 
A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d

Question 8

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co.from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above,i.e.,all would be included 
A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co.from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above,i.e.,all would be included

Question 9

In the United States,the largest expenditure component in GDP is

Accepted Answer

A)  gross private domestic investment. 
B)  government purchases of goods and services. 
C)  consumption expenditures. 
D)  net exports. 
E)  none of the above 
A)  gross private domestic investment. 
B)  government purchases of goods and services. 
C)  consumption expenditures. 
D)  net exports. 
E)  none of the above

Question 10

Look at the following data: GDP = 1,150 billion; investment = $200 billion; exports = $55 billion; government purchases = $145 billion; consumption = $850 billion.What does import spending equal?

Accepted Answer

A)  $100 billion 
B)  $370 billion 
C)  $200 billion 
D)  $430 billion 
E)  There is not enough information provided to answer this question. 
A)  $100 billion 
B)  $370 billion 
C)  $200 billion 
D)  $430 billion 
E)  There is not enough information provided to answer this question.

Question 11

The typical U.S.business cycle,measured peak to peak,lasts approximately

Accepted Answer

A)  4 to 5 years. 
B)  8 to 10 years. 
C)  1 to 3 years. 
D)  6 months to 2 years. 
A)  4 to 5 years. 
B)  8 to 10 years. 
C)  1 to 3 years. 
D)  6 months to 2 years.

Question 12

"Economic growth" has occurred if

Accepted Answer

A)  inflation rate between this year and last year is zero or less. 
B)  GDP this year exceeds the Real GDP this year. 
C)  unemployment rate this year is above the natural rate of unemployment. 
D)  Real GDP this year is greater than Real GDP last year. 
A)  inflation rate between this year and last year is zero or less. 
B)  GDP this year exceeds the Real GDP this year. 
C)  unemployment rate this year is above the natural rate of unemployment. 
D)  Real GDP this year is greater than Real GDP last year.

Question 13

Consumption expenditures in the U.S.usually account for approximately __________ percent of GDP.

Accepted Answer

A)  40 
B)  50 
C)  60 
D)  70 
E)  80 
A)  40 
B)  50 
C)  60 
D)  70 
E)  80

Question 14

The largest component of national income in the United States is

Accepted Answer

A)  rental income. 
B)  proprietors' income. 
C)  compensation of employees. 
D)  corporate profits. 
E)  net interest. 
A)  rental income. 
B)  proprietors' income. 
C)  compensation of employees. 
D)  corporate profits. 
E)  net interest.

Question 15

Suppose investment is equal to $950 billion,purchases of newly produced capital goods is $670 billion,and changes in business inventories is -$120 billion.What does purchases of new residential housing equal?

Accepted Answer

A)  $1,500 billion 
B)  $100 billion 
C)  $160 billion 
D)  $400 billion 
A)  $1,500 billion 
B)  $100 billion 
C)  $160 billion 
D)  $400 billion

Question 16

Which of the following items is a final good?

Accepted Answer

A)  mustard in a deli 
B)  tin purchased by a tin can company 
C)  a sweater purchased by someone in a department store 
D)  a and b 
E)  a,b,and c 
A)  mustard in a deli 
B)  tin purchased by a tin can company 
C)  a sweater purchased by someone in a department store 
D)  a and b 
E)  a,b,and c

Question 17

-Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

Accepted Answer

A)  $4,150 + $751 + $850 + $300 
B)  $4,150 + $751 + $850 - $331 + $300 
C)  $4,150 + $751 + $850 + $331 + $300 
D)  $4,150 + $751 + $850 + $331 + $300 - $320 
E)  $4,150 + $751 + $850 + $331 + $300 - $320 + $111 
A)  $4,150 + $751 + $850 + $300 
B)  $4,150 + $751 + $850 - $331 + $300 
C)  $4,150 + $751 + $850 + $331 + $300 
D)  $4,150 + $751 + $850 + $331 + $300 - $320 
E)  $4,150 + $751 + $850 + $331 + $300 - $320 + $111

Question 18

Corporate profits is the largest category of national income.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Exhibit 7-1.What is the value of national income?

Accepted Answer

A)  $4,351 
B)  $4,252 
C)  $4,403 
D)  $2,996 
E)  $4,542 
A)  $4,351 
B)  $4,252 
C)  $4,403 
D)  $2,996 
E)  $4,542

Question 20

Suppose that net exports are -$140 billion and exports are $240 billion.Imports must be equal to

Accepted Answer

A)  $380 billion. 
B)  $100 billion. 
C)  $200 billion. 
D)  -$200 billion. 
E)  There is not enough information to answer this question. 
A)  $380 billion. 
B)  $100 billion. 
C)  $200 billion. 
D)  -$200 billion. 
E)  There is not enough information to answer this question.

Exam 7: Consumer Choice: Maximizing Utility and Behavioral Economics

The expenditure approach to computing GDP measures

A transfer payment is a payment to a person that is made in return for goods and services supplied.

To macroeconomists,investment is mainly the purchases of goods and services

-Refer to Exhibit 7-5.During year 3,Country Z experienced economic _____________ and _________________.

The GDP of country A may be higher than that of country B because the workers in country A work more hours per week than workers in country B.

Look at the following data: GDP = $3,590 billion; consumption = $1,820 billion; exports = $450 billion; investment = $1,250 billion; government purchases = $900 billion.Imports is equal to __________ billion.

In the definition of GDP,the words "total market value" refer to total

Which of the following would not be included in the calculation of this year's GDP?

In the United States,the largest expenditure component in GDP is

Look at the following data: GDP = 1,150 billion; investment = $200 billion; exports = $55 billion; government purchases = $145 billion; consumption = $850 billion.What does import spending equal?

The typical U.S.business cycle,measured peak to peak,lasts approximately

"Economic growth" has occurred if

Consumption expenditures in the U.S.usually account for approximately __________ percent of GDP.

The largest component of national income in the United States is

Suppose investment is equal to $950 billion,purchases of newly produced capital goods is $670 billion,and changes in business inventories is -$120 billion.What does purchases of new residential housing equal?

Which of the following items is a final good?

-Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

Corporate profits is the largest category of national income.

-Refer to Exhibit 7-1.What is the value of national income?

Suppose that net exports are -$140 billion and exports are $240 billion.Imports must be equal to

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

-Refer to Exhibit 7-5.During year 3,Country Z experienced economic _ and _____.