Question 1

If the consumer price index (CPI)is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.​

Accepted Answer

A) 4.5 percent 
B) 8.6 percent​ 
C) 9.4 percent​ 
D) 15 percent​ 
E) 175 percent​ 
A) 4.5 percent 
B) 8.6 percent​ 
C) 9.4 percent​ 
D) 15 percent​ 
E) 175 percent​

Question 2

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?​

Accepted Answer

A) The money spent on the purchase of stocks 
B) The money spent on the purchase of used furnitures​ 
C) The money spent on the purchase of a used car​ 
D) The money spent on the purchase of kitchen appliances​ 
E) The money spent on the purchase of bonds issued by the government​ 
A) The money spent on the purchase of stocks 
B) The money spent on the purchase of used furnitures​ 
C) The money spent on the purchase of a used car​ 
D) The money spent on the purchase of kitchen appliances​ 
E) The money spent on the purchase of bonds issued by the government​

Question 3

A fixed-weight price index uses a process that adjusts the weights continuously year by year.​

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is included as government purchases in gross domestic product (GDP)?​

Accepted Answer

A) Social Security payments to elderly citizens 
B) Welfare benefits distributed to the poor​ 
C) Outright grants from government to recipients​ 
D) Payments to clerical workers hired by government​ 
E) Unemployment compensation benefits​ 
A) Social Security payments to elderly citizens 
B) Welfare benefits distributed to the poor​ 
C) Outright grants from government to recipients​ 
D) Payments to clerical workers hired by government​ 
E) Unemployment compensation benefits​

Question 5

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

Accepted Answer

A) an increase in the price level. 
B) changes in the interest rate. 
C) wear and tear over time. 
D) changes in tax laws. 
E) a decrease in its resale value. 
A) an increase in the price level. 
B) changes in the interest rate. 
C) wear and tear over time. 
D) changes in tax laws. 
E) a decrease in its resale value.

Question 6

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.​

Accepted Answer

A) True 
 B)False

Question 7

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.​

Accepted Answer

A) GDP = $7,400 
B) GDP = $7,740​ 
C) GDP = $3,140​ 
D) GDP = $6,470​ 
E) GDP = $6,840​ 
A) GDP = $7,400 
B) GDP = $7,740​ 
C) GDP = $3,140​ 
D) GDP = $6,470​ 
E) GDP = $6,840​

Question 8

Which of the following is true about the consumer price index (CPI)and the GDP price index?​

Accepted Answer

A) Both measures weigh prices by quantities consumed in some base year. 
B) Both yield identical numbers for price level changes for any two years. 
C) Both CPI and GDP price index underestimate changes in the price level in an economy. 
D) The CPI measures changes in relative prices of goods,while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services. 
E) CPI includes products that are widely used,while GDP price index includes all goods and services. 
A) Both measures weigh prices by quantities consumed in some base year. 
B) Both yield identical numbers for price level changes for any two years. 
C) Both CPI and GDP price index underestimate changes in the price level in an economy. 
D) The CPI measures changes in relative prices of goods,while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services. 
E) CPI includes products that are widely used,while GDP price index includes all goods and services.

Question 9

Which of the following correctly illustrates the leakages-injections approach to GDP?​

Accepted Answer

A) DI + (NT)= C + I + G + (X ‒ M) 
B) S + C + NT = DI​ 
C) S + C + (NT)= I + G + (X ‒ M)​ 
D) S + (NT)+ M = I + G + X​ 
E) S + (NT)= I + G + (X ‒ M)​ 
A) DI + (NT)= C + I + G + (X ‒ M) 
B) S + C + NT = DI​ 
C) S + C + (NT)= I + G + (X ‒ M)​ 
D) S + (NT)+ M = I + G + X​ 
E) S + (NT)= I + G + (X ‒ M)​

Question 10

If the nominal gross domestic product (GDP)for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP)for 2000 was _____.​

Accepted Answer

A) $3.1 trillion 
B) $6.2 trillion​ 
C) $12.4 trillion​ 
D) $18.6 trillion​ 
E) $24.3 trillion​ 
A) $3.1 trillion 
B) $6.2 trillion​ 
C) $12.4 trillion​ 
D) $18.6 trillion​ 
E) $24.3 trillion​

Question 11

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.​

Accepted Answer

A) True 
 B)False

Question 12

The gross domestic product (GDP)of an economy for a particular year is likely to increase if _____.​

Accepted Answer

A) workers go on longer vacations during that year 
B) the length of an average work week decreases​ 
C) homeowners hire lawn care services rather than maintaining the lawns themselves​ 
D) people cook food at home instead of buying restaurant meals​ 
E) the sale of illegal drugs increases​ 
A) workers go on longer vacations during that year 
B) the length of an average work week decreases​ 
C) homeowners hire lawn care services rather than maintaining the lawns themselves​ 
D) people cook food at home instead of buying restaurant meals​ 
E) the sale of illegal drugs increases​

Question 13

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.​

Accepted Answer

A) $0 
B) $15,000​ 
C) $35,000​ 
D) $38,000​ 
E) $41,000​ 
A) $0 
B) $15,000​ 
C) $35,000​ 
D) $38,000​ 
E) $41,000​

Question 14

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.​

Accepted Answer

A) $6,200 
B) $9,000 
C) $15,000 
D) $18,000 
E) $18,800 
A) $6,200 
B) $9,000 
C) $15,000 
D) $18,000 
E) $18,800

Question 15

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?​

Accepted Answer

A) Total value added is $65. 
B) The value of final sales is $65. 
C) The value of final sales is $25. 
D) Total value added is $25. 
E) Total value added is $45. 
A) Total value added is $65. 
B) The value of final sales is $65. 
C) The value of final sales is $25. 
D) Total value added is $25. 
E) Total value added is $45.

Question 16

Net exports equals _____.​

Accepted Answer

A) the value of exports minus the value of imports 
B) the value of imports minus the value of exports​ 
C) the value of imports minus tariffs​ 
D) the value of exports minus tariffs​ 
E) the value of exports plus the value of imports minus depreciation​ 
A) the value of exports minus the value of imports 
B) the value of imports minus the value of exports​ 
C) the value of imports minus tariffs​ 
D) the value of exports minus tariffs​ 
E) the value of exports plus the value of imports minus depreciation​

Question 17

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.​

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) Government purchases of goods and services 
B) Taxes​ 
C) Investment​ 
D) Exports​ 
E) Consumption expenditures​ 
A) Government purchases of goods and services 
B) Taxes​ 
C) Investment​ 
D) Exports​ 
E) Consumption expenditures​

Question 19

The GDP price index:​

Accepted Answer

A) measures the average price of final goods and services produced in an economy. 
B) measures the quality of goods produced in an economy. 
C) is derived using the prices of only imported and exported goods and services. 
D) is derived using the implicit prices of goods and services produced by the government. 
E) measures the value of all intermediate goods and services sold in an economy. 
A) measures the average price of final goods and services produced in an economy. 
B) measures the quality of goods produced in an economy. 
C) is derived using the prices of only imported and exported goods and services. 
D) is derived using the implicit prices of goods and services produced by the government. 
E) measures the value of all intermediate goods and services sold in an economy.

Question 20

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.​

Accepted Answer

A) 10 
B) equal to zero​ 
C) 20​ 
D) greater than 100​ 
E) negative​ 
A) 10 
B) equal to zero​ 
C) 20​ 
D) greater than 100​ 
E) negative​

If the consumer price index (CPI)is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?

A fixed-weight price index uses a process that adjusts the weights continuously year by year.

Which of the following is included as government purchases in gross domestic product (GDP)?

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

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.

Which of the following is true about the consumer price index (CPI)and the GDP price index?

Which of the following correctly illustrates the leakages-injections approach to GDP?

If the nominal gross domestic product (GDP)for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP)for 2000 was _____.

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.

The gross domestic product (GDP)of an economy for a particular year is likely to increase if _____.

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?

Net exports equals _____.

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.

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

The GDP price index:

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.

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

If the consumer price index (CPI)is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.​

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?​

A fixed-weight price index uses a process that adjusts the weights continuously year by year.​

Which of the following is included as government purchases in gross domestic product (GDP)?​

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

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.​

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.​

Which of the following is true about the consumer price index (CPI)and the GDP price index?​

Which of the following correctly illustrates the leakages-injections approach to GDP?​

If the nominal gross domestic product (GDP)for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP)for 2000 was _____.​

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.​

The gross domestic product (GDP)of an economy for a particular year is likely to increase if _____.​

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.​

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.​

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?​

Net exports equals _____.​

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.​

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

The GDP price index:​

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.​

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

If the consumer price index (CPI)is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP)?

A fixed-weight price index uses a process that adjusts the weights continuously year by year.

Which of the following is included as government purchases in gross domestic product (GDP)?

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

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.

Which of the following is true about the consumer price index (CPI)and the GDP price index?

Which of the following correctly illustrates the leakages-injections approach to GDP?

If the nominal gross domestic product (GDP)for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP)for 2000 was _____.

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.

The gross domestic product (GDP)of an economy for a particular year is likely to increase if _____.

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?

Net exports equals _____.

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.

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

The GDP price index:

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.