Question 1

Real GDP is the value of all __________ goods and services produced in a given year in __________ prices.

Accepted Answer

A) intermediate;that year's 
B) intermediate;base-year 
C) final;that year's 
D) final;base-year 
A) intermediate;that year's 
B) intermediate;base-year 
C) final;that year's 
D) final;base-year

Question 2

Real GDP is GDP

Accepted Answer

A) in current-year prices. 
B) in base-year prices. 
C) in GDP-prices. 
D) in that year's prices. 
A) in current-year prices. 
B) in base-year prices. 
C) in GDP-prices. 
D) in that year's prices.

Question 3

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 4

Given that GDP is a measure of what is produced in a country,explain how the expenditure approach can measure GDP.How are items produced,but not yet sold,accounted for in the expenditure approach?

Accepted Answer

The expenditure approach measures GDP by

Question 5

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 6

Depreciation refers to a decrease in the value of a good caused by

Accepted Answer

A) an increase in the price level. 
B) a decrease in the price level. 
C) "wear and tear" of capital goods over time. 
D) the depreciation allowance. 
E) a decrease in purchasing power. 
A) an increase in the price level. 
B) a decrease in the price level. 
C) "wear and tear" of capital goods over time. 
D) the depreciation allowance. 
E) a decrease in purchasing power.

Question 7

Disposable income equals national income minus personal taxes.

Accepted Answer

A) True 
 B)False

Question 8

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

Accepted Answer

A) No,since data on services and profits are missing. 
B) No,since data on inventory investment and profits are missing. 
C) No,since data on inventory investment and services are missing. 
D) No,since data on services and dividends are missing. 
E) Yes,all of the necessary components of GDP are given. 
A) No,since data on services and profits are missing. 
B) No,since data on inventory investment and profits are missing. 
C) No,since data on inventory investment and services are missing. 
D) No,since data on services and dividends are missing. 
E) Yes,all of the necessary components of GDP are given.

Question 9

Disposable income is

Accepted Answer

A) equal to GDP minus the capital consumption allowance. 
B) that portion of personal income that can be used for consumption and saving. 
C) the sum of all payments to suppliers of the factors of production. 
D) equal to national income. 
E) another term for personal income. 
A) equal to GDP minus the capital consumption allowance. 
B) that portion of personal income that can be used for consumption and saving. 
C) the sum of all payments to suppliers of the factors of production. 
D) equal to national income. 
E) another term for personal income.

Question 10

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 11

The sale of __________ goods is omitted from current GDP because __________.

Accepted Answer

A) intermediate goods;these goods do not constitute production 
B) used goods;these goods were counted in an earlier year 
C) illegal;these goods do not constitute economic value 
D) b and c 
E) a,b,and c 
A) intermediate goods;these goods do not constitute production 
B) used goods;these goods were counted in an earlier year 
C) illegal;these goods do not constitute economic value 
D) b and c 
E) a,b,and c

Question 12

Which of the following is the correct equation for computing personal income?

Accepted Answer

A) Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B) Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C) Personal income = National income - taxes 
D) Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E) none of the above 
A) Personal income = National income + undistributed profits - social insurance taxes - corporate profits taxes + transfer payments. 
B) Personal income = National income - undistributed profits - social insurance taxes + corporate profits taxes + transfer payments 
C) Personal income = National income - taxes 
D) Personal income = National income - undistributed corporate profits - social insurance taxes - corporate profits taxes + transfer payments 
E) none of the above

Question 13

Investment is equal to all purchases of newly produced capital goods

Accepted Answer

A) minus changes in business inventories. 
B) plus fixed investment minus inventory investment. 
C) plus changes in business inventories. 
D) plus changes in business inventories plus purchases of new residential housing. 
A) minus changes in business inventories. 
B) plus fixed investment minus inventory investment. 
C) plus changes in business inventories. 
D) plus changes in business inventories plus purchases of new residential housing.

Question 14

GDP can rise as a result of a rise in __________________,and Real GDP can rise as a result of a rise in _______________________.

Accepted Answer

A) prices or output;prices only. 
B) prices only;prices or output. 
C) prices or output;output only. 
D) prices or output;prices or output. 
A) prices or output;prices only. 
B) prices only;prices or output. 
C) prices or output;output only. 
D) prices or output;prices or output.

Question 15

Gross Domestic Product (GDP)is the total market value of all

Accepted Answer

A) final goods and services produced annually within a country's borders. 
B) final and intermediate goods and services produced annually within a country's borders. 
C) intermediate goods and services produced annually within a country's borders. 
D) final goods produced every month within a country's borders. 
A) final goods and services produced annually within a country's borders. 
B) final and intermediate goods and services produced annually within a country's borders. 
C) intermediate goods and services produced annually within a country's borders. 
D) final goods produced every month within a country's borders.

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

Real GDP is the value of all __________ goods and services produced in a given year in __________ prices.

Real GDP is GDP

Which of the following items is a final good?

Given that GDP is a measure of what is produced in a country,explain how the expenditure approach can measure GDP.How are items produced,but not yet sold,accounted for in the expenditure approach?

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

Depreciation refers to a decrease in the value of a good caused by

Disposable income equals national income minus personal taxes.

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

Disposable income is

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

The sale of __________ goods is omitted from current GDP because __________.

Which of the following is the correct equation for computing personal income?

Investment is equal to all purchases of newly produced capital goods

GDP can rise as a result of a rise in __________________,and Real GDP can rise as a result of a rise in _______________________.

Gross Domestic Product (GDP)is the total market value of all

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

Real GDP is the value of all goods and services produced in a given year in prices.

The sale of goods is omitted from current GDP because .

GDP can rise as a result of a rise in ,and Real GDP can rise as a result of a rise in _____.