Question 1

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.​

Accepted Answer

A) True 
 B)False

Question 2

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.​

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true of an intermediate good?​

Accepted Answer

A) It is of no value to the seller. 
B) It is of no value to the buyer. 
C) It is purchased for household production. 
D) It helps produce another good. 
E) It is sold at a discounted price by firms. 
A) It is of no value to the seller. 
B) It is of no value to the buyer. 
C) It is purchased for household production. 
D) It helps produce another good. 
E) It is sold at a discounted price by firms.

Question 4

The table below shows the current and base-year prices of different goods in a market basket. The table shows that the price of the market basket in the current year is _____ higher than the price of the market basket in the base year.
​
​Table 6.2
​

Accepted Answer

A) 100 percent 
B) 50 percent​. 
C) 1 percent​ 
D) 50 percent​ 
E) 200 percent​ 
A) 100 percent 
B) 50 percent​. 
C) 1 percent​ 
D) 50 percent​ 
E) 200 percent​

Question 5

Net taxes are indirect business taxes plus transfer payments.​

Accepted Answer

A) True 
 B)False

Question 6

Taxes are injections into the circular flow of income and expenditure model.​

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would be included in the calculation of gross domestic product (GDP)?​

Accepted Answer

A) The value of a used automobile purchased by Jim 
B) The sale price of a new house purchased by Joe​ 
C) The receipt of $100 in food stamps by Sandy​ 
D) The $200 that Kurt spends on the purchase of bonds 
E) The amount of money that Laurie receives as unemployment benefit after losing her job 
A) The value of a used automobile purchased by Jim 
B) The sale price of a new house purchased by Joe​ 
C) The receipt of $100 in food stamps by Sandy​ 
D) The $200 that Kurt spends on the purchase of bonds 
E) The amount of money that Laurie receives as unemployment benefit after losing her job

Question 8

If the nominal gross domestic product (GDP)for a particular year is $4 trillion and the real GDP for that year is $3 trillion,then the GDP price index is 133.​

Accepted Answer

A) True 
 B)False

Question 9

If the consumer price index (CPI)this year is 162 and last year it was 170,the inflation rate:​

Accepted Answer

A) is positive. 
B) is negative. 
C) has decreased since last year. 
D) has increased since last year. 
E) is the same as last year. 
A) is positive. 
B) is negative. 
C) has decreased since last year. 
D) has increased since last year. 
E) is the same as last year.

Question 10

Which of the following will be excluded from the measurement of gross domestic product (GDP)?​

Accepted Answer

A) The market value of automobiles purchased by the federal government 
B) The market value of California wine purchased by a Canadian firm​ 
C) The payment of employees' medical insurance​ 
D) The market value of computers purchased by state governments​ 
E) The market value of transactions in the underground economy 
A) The market value of automobiles purchased by the federal government 
B) The market value of California wine purchased by a Canadian firm​ 
C) The payment of employees' medical insurance​ 
D) The market value of computers purchased by state governments​ 
E) The market value of transactions in the underground economy

Question 11

Which of the following is an example of a leakage into the circular flow of income and expenditure?​

Accepted Answer

A) Saving 
B) Exports​ 
C) Government expenditure on goods​ 
D) Transfer payments​ 
E) Investment by firms​ 
A) Saving 
B) Exports​ 
C) Government expenditure on goods​ 
D) Transfer payments​ 
E) Investment by firms​

Question 12

Which of the following is likely to be excluded from the gross domestic product (GDP)of a country?​

Accepted Answer

A) The value of the drugs being sold in a vacant lot 
B) The value of the drugs being sold in a pharmacy​ 
C) A doctor treating a patient in a hospital​ 
D) The value of a new house bought by an individual​ 
E) The value of new furnitures bought by an individual​ 
A) The value of the drugs being sold in a vacant lot 
B) The value of the drugs being sold in a pharmacy​ 
C) A doctor treating a patient in a hospital​ 
D) The value of a new house bought by an individual​ 
E) The value of new furnitures bought by an individual​

Question 13

Which of the following would be included in this year's gross domestic product (GDP)?​

Accepted Answer

A) One hundred shares of IBM stock that Tony sold this May 
B) A used car that Tracey sold to Justin​ 
C) George's purchase of a fishing rod and reel at a garage sale​ 
D) Sharon giving Dennis $20 as a reward for finding her ring​ 
E) A bucket of Kentucky Fried Chicken that Kate bought this July​ 
A) One hundred shares of IBM stock that Tony sold this May 
B) A used car that Tracey sold to Justin​ 
C) George's purchase of a fishing rod and reel at a garage sale​ 
D) Sharon giving Dennis $20 as a reward for finding her ring​ 
E) A bucket of Kentucky Fried Chicken that Kate bought this July​

Question 14

To determine the consumer price index (CPI),_____.​

Accepted Answer

A) the values of the current market basket at current and base-year prices need to be known 
B) the values of the base-year market basket at current and base-year prices need to be known​ 
C) the values of the current market basket at current prices and the base-year market basket at base-year prices need to be known​ 
D) only the current market basket at base-year prices needs to be known​ 
E) only the current market basket at current prices needs to be known​ 
A) the values of the current market basket at current and base-year prices need to be known 
B) the values of the base-year market basket at current and base-year prices need to be known​ 
C) the values of the current market basket at current prices and the base-year market basket at base-year prices need to be known​ 
D) only the current market basket at base-year prices needs to be known​ 
E) only the current market basket at current prices needs to be known​

Question 15

Which of the following statements is true regarding leakages and injections?​

Accepted Answer

A) Government transfer payments must equal taxes because one is a leakage and the other is an injection. 
B) Imports must equal exports since both are leakages. 
C) Government purchases,investment,and exports are leakages from the circular flow of income and expenditure. 
D) Savings and net taxes are leakages from the circular flow of income and expenditure. 
E) Net taxes are an injection into the circular flow,while exports are a leakage. 
A) Government transfer payments must equal taxes because one is a leakage and the other is an injection. 
B) Imports must equal exports since both are leakages. 
C) Government purchases,investment,and exports are leakages from the circular flow of income and expenditure. 
D) Savings and net taxes are leakages from the circular flow of income and expenditure. 
E) Net taxes are an injection into the circular flow,while exports are a leakage.

Question 16

If the price index is 100 this year,then:​

Accepted Answer

A) there has been no inflation during the year. 
B) the price level is thrice as it was in the base year. 
C) the price level is one hundred times what it was in the base year. 
D) the price level is double what it was in the base year. 
E) the inflation rate has been 100 percent since the base year. 
A) there has been no inflation during the year. 
B) the price level is thrice as it was in the base year. 
C) the price level is one hundred times what it was in the base year. 
D) the price level is double what it was in the base year. 
E) the inflation rate has been 100 percent since the base year.

Question 17

The price index in the base year always equals_____.​

Accepted Answer

A) 0 
B) 10​ 
C) 100​ 
D) 1​ 
E) 0.01​ 
A) 0 
B) 10​ 
C) 100​ 
D) 1​ 
E) 0.01​

Question 18

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.​

Accepted Answer

A) 1.2 
B) 17​ 
C) 20​ 
D) 83​ 
E) 120​ 
A) 1.2 
B) 17​ 
C) 20​ 
D) 83​ 
E) 120​

Question 19

Gross domestic product (GDP)does not reflect many things that individuals do for themselves.​

Accepted Answer

A) True 
 B)False

Question 20

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.​

Accepted Answer

A) True 
 B)False

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.

Which of the following is true of an intermediate good?

The table below shows the current and base-year prices of different goods in a market basket. The table shows that the price of the market basket in the current year is _____ higher than the price of the market basket in the base year. Table 6.2

Net taxes are indirect business taxes plus transfer payments.

Taxes are injections into the circular flow of income and expenditure model.

Which of the following would be included in the calculation of gross domestic product (GDP)?

If the nominal gross domestic product (GDP)for a particular year is $4 trillion and the real GDP for that year is $3 trillion,then the GDP price index is 133.

If the consumer price index (CPI)this year is 162 and last year it was 170,the inflation rate:

Which of the following will be excluded from the measurement of gross domestic product (GDP)?

Which of the following is an example of a leakage into the circular flow of income and expenditure?

Which of the following is likely to be excluded from the gross domestic product (GDP)of a country?

Which of the following would be included in this year's gross domestic product (GDP)?

To determine the consumer price index (CPI),_____.

Which of the following statements is true regarding leakages and injections?

If the price index is 100 this year,then:

The price index in the base year always equals_____.

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.

Gross domestic product (GDP)does not reflect many things that individuals do for themselves.

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 6: Tracking the Useconomy

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.​

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.​

Which of the following is true of an intermediate good?​

The table below shows the current and base-year prices of different goods in a market basket. The table shows that the price of the market basket in the current year is _____ higher than the price of the market basket in the base year. ​ ​Table 6.2 ​

Net taxes are indirect business taxes plus transfer payments.​

Taxes are injections into the circular flow of income and expenditure model.​

Which of the following would be included in the calculation of gross domestic product (GDP)?​

If the nominal gross domestic product (GDP)for a particular year is $4 trillion and the real GDP for that year is $3 trillion,then the GDP price index is 133.​

If the consumer price index (CPI)this year is 162 and last year it was 170,the inflation rate:​

Which of the following will be excluded from the measurement of gross domestic product (GDP)?​

Which of the following is an example of a leakage into the circular flow of income and expenditure?​

Which of the following is likely to be excluded from the gross domestic product (GDP)of a country?​

Which of the following would be included in this year's gross domestic product (GDP)?​

To determine the consumer price index (CPI),_____.​

Which of the following statements is true regarding leakages and injections?​

If the price index is 100 this year,then:​

The price index in the base year always equals_____.​

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.​

Gross domestic product (GDP)does not reflect many things that individuals do for themselves.​

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Gross domestic product (GDP)understates total economic activity because it ignores household production of goods and services.

If the GDP price index rises from 100 to 110 to 115 over three consecutive years,it can be concluded that the inflation rate is decreasing.

Which of the following is true of an intermediate good?

The table below shows the current and base-year prices of different goods in a market basket. The table shows that the price of the market basket in the current year is _____ higher than the price of the market basket in the base year. Table 6.2

Net taxes are indirect business taxes plus transfer payments.

Taxes are injections into the circular flow of income and expenditure model.

Which of the following would be included in the calculation of gross domestic product (GDP)?

If the nominal gross domestic product (GDP)for a particular year is $4 trillion and the real GDP for that year is $3 trillion,then the GDP price index is 133.

If the consumer price index (CPI)this year is 162 and last year it was 170,the inflation rate:

Which of the following will be excluded from the measurement of gross domestic product (GDP)?

Which of the following is an example of a leakage into the circular flow of income and expenditure?

Which of the following is likely to be excluded from the gross domestic product (GDP)of a country?

Which of the following would be included in this year's gross domestic product (GDP)?

To determine the consumer price index (CPI),_____.

Which of the following statements is true regarding leakages and injections?

If the price index is 100 this year,then:

The price index in the base year always equals_____.

If nominal gross domestic product (GDP)for a particular year is $6 trillion and real gross domestic product (GDP)for that year is $5 trillion,then the GDP price index for that year is _____.

Gross domestic product (GDP)does not reflect many things that individuals do for themselves.

Nominal gross domestic product (GDP)is a better measure of growth in production than real GDP.