Question 1

A nation's aggregate expenditure decreases with an increase in imports,other things constant.​

Accepted Answer

A) True 
 B)False

Question 2

Imports are leakages from the circular flow of income and expenditure model.​

Accepted Answer

A) True 
 B)False

Question 3

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005.​ ​
Table 6.3
​

Accepted Answer

A) increased by about $5 billion 
B) decreased by about $5 billion​ 
C) remained almost constant​ 
D) increased by about $2 billion​ 
E) decreased by about $2 billion​ 
A) increased by about $5 billion 
B) decreased by about $5 billion​ 
C) remained almost constant​ 
D) increased by about $2 billion​ 
E) decreased by about $2 billion​

Question 4

The consumer price index (CPI)tends to understate the true rate of inflation.​

Accepted Answer

A) True 
 B)False

Question 5

Katrina pays $40 for a meal at a fancy restaurant.The ingredients used cost $10.The value added by the restaurant is _____.​

Accepted Answer

A) $30 
B) $40​ 
C) $70​ 
D) $40 plus the wages paid to the chef and waiters​ 
E) $40 plus the profit earned by the restaurant owner​ 
A) $30 
B) $40​ 
C) $70​ 
D) $40 plus the wages paid to the chef and waiters​ 
E) $40 plus the profit earned by the restaurant owner​

Question 6

Which of the following is true of the gross domestic product (GDP)of a nation?​

Accepted Answer

A) It can be measured by the stock of consumer goods in a nation at a particular point in time. 
B) It can be measured by the stock of capital goods in a nation at a particular point in time. 
C) It can be measured either by calculating the total spending on production or the total income from that production. 
D) It is the sum of total spending on production and total income from that production. 
E) It can be measured from the stock of wealth in the nation. 
A) It can be measured by the stock of consumer goods in a nation at a particular point in time. 
B) It can be measured by the stock of capital goods in a nation at a particular point in time. 
C) It can be measured either by calculating the total spending on production or the total income from that production. 
D) It is the sum of total spending on production and total income from that production. 
E) It can be measured from the stock of wealth in the nation.

Question 7

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2002 and 2005.​ ​
Table 6.3
​

Accepted Answer

A) increased more than $5 billion 
B) decreased more than $5 billion​ 
C) increased by less than $1 billion​ 
D) decreased by less than $1 billion​ 
E) remained constant​ 
A) increased more than $5 billion 
B) decreased more than $5 billion​ 
C) increased by less than $1 billion​ 
D) decreased by less than $1 billion​ 
E) remained constant​

Question 8

A decrease in gross domestic product (GDP)necessarily means that consumer welfare has decreased.​

Accepted Answer

A) True 
 B)False

Question 9

The base year for a price index is the year_____.​

Accepted Answer

A) in which prices were lowest 
B) in which prices were highest​ 
C) in which real output was the largest​ 
D) in which prices were stable​ 
E) that serves as a reference point​ 
A) in which prices were lowest 
B) in which prices were highest​ 
C) in which real output was the largest​ 
D) in which prices were stable​ 
E) that serves as a reference point​

Question 10

A GDP price index of 100 for a year implies that:​

Accepted Answer

A) there has been no inflation during the year. 
B) the price level is three times what 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 per year since the base year. 
A) there has been no inflation during the year. 
B) the price level is three times what 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 per year since the base year.

Question 11

The value added method to measure GDP does not avoid double counting.​

Accepted Answer

A) True 
 B)False

Question 12

Leakages cause diversion of income from the domestic spending stream.​

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) The sale price of equipment produced last year but sold this year 
B) The money spent by Kate on the purchase of new furniture​ 
C) The money spent by Barney on the purchase of his uncle's house​ 
D) The sale price of the stock purchased by John​ 
E) The opportunity cost of the time spent by Bruno cooking lunch for his neighbor​ 
A) The sale price of equipment produced last year but sold this year 
B) The money spent by Kate on the purchase of new furniture​ 
C) The money spent by Barney on the purchase of his uncle's house​ 
D) The sale price of the stock purchased by John​ 
E) The opportunity cost of the time spent by Bruno cooking lunch for his neighbor​

Question 14

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.​

Accepted Answer

A) 1 percent higher 
B) 8 percent higher​ 
C) 9 percent higher​ 
D) 0.9 percent higher​ 
E) 12 percent higher​ 
A) 1 percent higher 
B) 8 percent higher​ 
C) 9 percent higher​ 
D) 0.9 percent higher​ 
E) 12 percent higher​

Question 15

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.​

Accepted Answer

A) True 
 B)False

Question 16

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.​

Accepted Answer

A) $200 billion 
B) 50 percent​ 
C) $100 billion​ 
D) 100 percent​ 
E) 200 percent​ 
A) $200 billion 
B) 50 percent​ 
C) $100 billion​ 
D) 100 percent​ 
E) 200 percent​

Question 17

A shortcoming of national income accounting is that it ignores:​

Accepted Answer

A) the depreciation of manufactured capital. 
B) spending by poor households who are receiving government transfer payments. 
C) spending on intermediate goods. 
D) the depletion of natural resources. 
E) U.S.products that are sold overseas. 
A) the depreciation of manufactured capital. 
B) spending by poor households who are receiving government transfer payments. 
C) spending on intermediate goods. 
D) the depletion of natural resources. 
E) U.S.products that are sold overseas.

Question 18

If real gross domestic product (GDP)for a particular year is $5 trillion and the GDP price index for that year is 136,the nominal gross domestic product (GDP)for that year is _____.​

Accepted Answer

A) $3.7 trillion 
B) $4 trillion​ 
C) $6.8 trillion​ 
D) $27 trillion​ 
E) $68 trillion​ 
A) $3.7 trillion 
B) $4 trillion​ 
C) $6.8 trillion​ 
D) $27 trillion​ 
E) $68 trillion​

Question 19

If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000 from another firm,earns profits of $500,and sells its output for $14,000,the value added by the firm is _____.​

Accepted Answer

A) $12,000 
B) $8,000​ 
C) $6,000 
D) $2,000 
E) $500 
A) $12,000 
B) $8,000​ 
C) $6,000 
D) $2,000 
E) $500

Question 20

Which of the following is true of exports and imports?​

Accepted Answer

A) Both imports and exports are added to a nation's gross domestic product (GDP). 
B) Both imports and exports are subtracted from a nation's gross domestic product (GDP). 
C) Imports are added and exports are subtracted from a nation's gross domestic product (GDP). 
D) Exports are added and imports are subtracted from a nation's gross domestic product (GDP). 
E) Neither imports nor exports are included in a nation's gross domestic product (GDP). 
A) Both imports and exports are added to a nation's gross domestic product (GDP). 
B) Both imports and exports are subtracted from a nation's gross domestic product (GDP). 
C) Imports are added and exports are subtracted from a nation's gross domestic product (GDP). 
D) Exports are added and imports are subtracted from a nation's gross domestic product (GDP). 
E) Neither imports nor exports are included in a nation's gross domestic product (GDP).

A nation's aggregate expenditure decreases with an increase in imports,other things constant.

Imports are leakages from the circular flow of income and expenditure model.

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005. Table 6.3

The consumer price index (CPI)tends to understate the true rate of inflation.

Katrina pays $40 for a meal at a fancy restaurant.The ingredients used cost $10.The value added by the restaurant is _____.

Which of the following is true of the gross domestic product (GDP)of a nation?

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2002 and 2005. Table 6.3

A decrease in gross domestic product (GDP)necessarily means that consumer welfare has decreased.

The base year for a price index is the year_____.

A GDP price index of 100 for a year implies that:

The value added method to measure GDP does not avoid double counting.

Leakages cause diversion of income from the domestic spending stream.

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

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.

A shortcoming of national income accounting is that it ignores:

If real gross domestic product (GDP)for a particular year is $5 trillion and the GDP price index for that year is 136,the nominal gross domestic product (GDP)for that year is _____.

If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000 from another firm,earns profits of $500,and sells its output for $14,000,the value added by the firm is _____.

Which of the following is true of exports and imports?

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

A nation's aggregate expenditure decreases with an increase in imports,other things constant.​

Imports are leakages from the circular flow of income and expenditure model.​

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005.​ ​ Table 6.3 ​

The consumer price index (CPI)tends to understate the true rate of inflation.​

Katrina pays $40 for a meal at a fancy restaurant.The ingredients used cost $10.The value added by the restaurant is _____.​

Which of the following is true of the gross domestic product (GDP)of a nation?​

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2002 and 2005.​ ​ Table 6.3 ​

A decrease in gross domestic product (GDP)necessarily means that consumer welfare has decreased.​

The base year for a price index is the year_____.​

A GDP price index of 100 for a year implies that:​

The value added method to measure GDP does not avoid double counting.​

Leakages cause diversion of income from the domestic spending stream.​

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

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.​

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.​

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.​

A shortcoming of national income accounting is that it ignores:​

If real gross domestic product (GDP)for a particular year is $5 trillion and the GDP price index for that year is 136,the nominal gross domestic product (GDP)for that year is _____.​

If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000 from another firm,earns profits of $500,and sells its output for $14,000,the value added by the firm is _____.​

Which of the following is true of exports and imports?​

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

A nation's aggregate expenditure decreases with an increase in imports,other things constant.

Imports are leakages from the circular flow of income and expenditure model.

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2004 and 2005. Table 6.3

The consumer price index (CPI)tends to understate the true rate of inflation.

Katrina pays $40 for a meal at a fancy restaurant.The ingredients used cost $10.The value added by the restaurant is _____.

Which of the following is true of the gross domestic product (GDP)of a nation?

The table below shows the price indexes and the nominal gross domestic product (GDP)for an economy from 2001 to 2005.The real GDP _____ between 2002 and 2005. Table 6.3

A decrease in gross domestic product (GDP)necessarily means that consumer welfare has decreased.

The base year for a price index is the year_____.

A GDP price index of 100 for a year implies that:

The value added method to measure GDP does not avoid double counting.

Leakages cause diversion of income from the domestic spending stream.

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

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.

Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.

A shortcoming of national income accounting is that it ignores:

If real gross domestic product (GDP)for a particular year is $5 trillion and the GDP price index for that year is 136,the nominal gross domestic product (GDP)for that year is _____.

If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000 from another firm,earns profits of $500,and sells its output for $14,000,the value added by the firm is _____.

Which of the following is true of exports and imports?