Question 1

Suppose that fixed investment is $550 billion and (total)investment is $630 billion.What does inventory investment equal?

Accepted Answer

A) $80 billion 
B) $550 billion 
C) $630 billion 
D) $1,180 billion 
E) There is not enough information to answer this question. 
A) $80 billion 
B) $550 billion 
C) $630 billion 
D) $1,180 billion 
E) There is not enough information to answer this question.

Question 2

What is the proper sequence of the phases of a business cycle?

Accepted Answer

A) peak,contraction,trough,expansion,recovery 
B) peak,contraction,recovery,trough,expansion 
C) peak,contraction,trough,recovery,expansion 
D) contraction,peak,trough,recovery,expansion 
E) recovery,trough,peak,expansion,contraction 
A) peak,contraction,trough,expansion,recovery 
B) peak,contraction,recovery,trough,expansion 
C) peak,contraction,trough,recovery,expansion 
D) contraction,peak,trough,recovery,expansion 
E) recovery,trough,peak,expansion,contraction

Question 3

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

Accepted Answer

A) 9.73 percent 
B) 2.67 percent 
C) 3.58 percent 
D) 2.74 percent 
A) 9.73 percent 
B) 2.67 percent 
C) 3.58 percent 
D) 2.74 percent

Question 4

List and explain the two different approaches used to measure GDP.

Accepted Answer

The two different approaches are: the ex

Question 5

Which of the following statements is false?

Accepted Answer

A) The market value of all nonmarket goods is omitted from GDP. 
B) The sale of used goods is omitted from GDP. 
C) The market value of a person mowing his or her own lawn is omitted from GDP. 
D) If a good is produced but not sold,it is included in GDP. 
A) The market value of all nonmarket goods is omitted from GDP. 
B) The sale of used goods is omitted from GDP. 
C) The market value of a person mowing his or her own lawn is omitted from GDP. 
D) If a good is produced but not sold,it is included in GDP.

Question 6

The standard definition of "recession" is

Accepted Answer

A) a period of a positive frictional unemployment rate. 
B) two consecutive quarters of falling Real GDP. 
C) the lowest point in a business cycle. 
D) a period of negative inflation. 
A) a period of a positive frictional unemployment rate. 
B) two consecutive quarters of falling Real GDP. 
C) the lowest point in a business cycle. 
D) a period of negative inflation.

Question 7

An example of income earned but not received is

Accepted Answer

A) welfare payments. 
B) Social Security payments. 
C) undistributed profits. 
D) a and b 
E) a,b,and c 
A) welfare payments. 
B) Social Security payments. 
C) undistributed profits. 
D) a and b 
E) a,b,and c

Question 8

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

Accepted Answer

The recovery phase is the period when Re

Question 9

In the calculation of national income,dividends paid to stockholders are part of

Accepted Answer

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

Question 10

The base year is the year

Accepted Answer

A) in which prices are unstable. 
B) in which prices are lowest. 
C) in which prices are highest. 
D) that serves as a reference point or benchmark. 
E) in which nominal output is largest. 
A) in which prices are unstable. 
B) in which prices are lowest. 
C) in which prices are highest. 
D) that serves as a reference point or benchmark. 
E) in which nominal output is largest.

Question 11

Which of the following goods is an intermediate good?

Accepted Answer

A) lettuce that a restaurant buys to put on sandwiches 
B) tires that a car company buys to put on the cars it produces 
C) a television set that Chi-Mai buys to put in her college dorm room 
D) a and b 
E) b and c 
A) lettuce that a restaurant buys to put on sandwiches 
B) tires that a car company buys to put on the cars it produces 
C) a television set that Chi-Mai buys to put in her college dorm room 
D) a and b 
E) b and c

Question 12

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 13

Explain why GDP figures do not necessarily measure happiness or well-being.

Accepted Answer

Well-being and happiness are subjective.

Question 14

The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

Accepted Answer

A) expenditure;income 
B) expenditure;national product 
C) national product;income 
D) net national product;personal income 
A) expenditure;income 
B) expenditure;national product 
C) national product;income 
D) net national product;personal income

Question 15

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

Accepted Answer

A) the Netherlands;New Zealand;the United States. 
B) the Netherlands;Australia;Switzerland. 
C) the United States;the United States;the United States. 
D) Austria;Australia;New Zealand. 
A) the Netherlands;New Zealand;the United States. 
B) the Netherlands;Australia;Switzerland. 
C) the United States;the United States;the United States. 
D) Austria;Australia;New Zealand.

Question 16

When computing national income,which of the following is included in compensation of employees?

Accepted Answer

A) wages and salaries paid to employees 
B) employers' contributions to Social Security and employee benefit plans 
C) the monetary value of fringe benefits,tips,and paid vacations 
D) all of the above 
A) wages and salaries paid to employees 
B) employers' contributions to Social Security and employee benefit plans 
C) the monetary value of fringe benefits,tips,and paid vacations 
D) all of the above

Question 17

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

Accepted Answer

A) a bill from a car mechanic 
B) wages of a card dealer working in a Las Vegas casino 
C) commissions of a stockbroker 
D) the increased value of shares of stock 
E) c and d 
A) a bill from a car mechanic 
B) wages of a card dealer working in a Las Vegas casino 
C) commissions of a stockbroker 
D) the increased value of shares of stock 
E) c and d

Question 18

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 19

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Accepted Answer

A) federal government only. 
B) state governments only. 
C) local governments only. 
D) state and local governments,but not the federal government. 
E) federal,state,and local governments. 
A) federal government only. 
B) state governments only. 
C) local governments only. 
D) state and local governments,but not the federal government. 
E) federal,state,and local governments.

Question 20

Net interest is the interest paid out by US households and government minus the interest income they received.

Accepted Answer

A) True 
 B)False

Exam 7: Macroeconomic Measurements, part II: GDP and Real GDP

Suppose that fixed investment is $550 billion and (total)investment is $630 billion.What does inventory investment equal?

What is the proper sequence of the phases of a business cycle?

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

List and explain the two different approaches used to measure GDP.

Which of the following statements is false?

The standard definition of "recession" is

An example of income earned but not received is

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

In the calculation of national income,dividends paid to stockholders are part of

The base year is the year

Which of the following goods is an intermediate good?

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

Explain why GDP figures do not necessarily measure happiness or well-being.

The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach.

In 1820 the country with the highest per capita GDP was ______________________.In 1900 the country that ranked #1 in terms of per capita GDP was ___________________ and fifty years later the top ranking was held by _________________________.

When computing national income,which of the following is included in compensation of employees?

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

The largest component of national income in the United States is

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Net interest is the interest paid out by US households and government minus the interest income they received.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

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

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

The two ways of measuring Gross Domestic Product are the approach and the approach.

In 1820 the country with the highest per capita GDP was ____________.In 1900 the country that ranked #1 in terms of per capita GDP was _ and fifty years later the top ranking was held by _________________.