Question 1

In GDP measurement, consumer spending includes

Accepted Answer

A) spending by businesses on labor resources 
B) spending by government on office buildings 
C) spending by individual households on automobiles and durables 
D) exchanges in business inventories 
E) a firm's purchase of a radio made in Taiwan 
A) spending by businesses on labor resources 
B) spending by government on office buildings 
C) spending by individual households on automobiles and durables 
D) exchanges in business inventories 
E) a firm's purchase of a radio made in Taiwan

Question 2

Taxes are an injection into the circular flow.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) Jim purchases a new automobile. 
B) Joe pays a plumber $100 to fix a broken pipe. 
C) Sandy, who is on welfare, receives $100 in food stamps. 
D) Kurt purchases an airline ticket for $500 just before a big reduction in fares. 
E) Laurie pays $15 for a haircut. 
A) Jim purchases a new automobile. 
B) Joe pays a plumber $100 to fix a broken pipe. 
C) Sandy, who is on welfare, receives $100 in food stamps. 
D) Kurt purchases an airline ticket for $500 just before a big reduction in fares. 
E) Laurie pays $15 for a haircut.

Question 4

The CPI tends to understate the true rate of inflation.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The value of the films produced in the United States starring Charlie Chaplin that still exist will not be included in this year's U.S. GDP because

Accepted Answer

A) Charlie Chaplin was not an American citizen 
B) Charlie Chaplin did not make the films this year 
C) the films are no longer being shown and earning revenue 
D) the films no longer have any value except for collectors 
E) films are intermediate goods 
A) Charlie Chaplin was not an American citizen 
B) Charlie Chaplin did not make the films this year 
C) the films are no longer being shown and earning revenue 
D) the films no longer have any value except for collectors 
E) films are intermediate goods

Question 7

Which of the following actions would not increase GDP?

Accepted Answer

A) Tom's alarm clock breaks, so he buys a new one. 
B) Tom buys a new alarm clock because he routinely sleeps through the first alarm. 
C) Tom's alarm clock breaks; now he oversleeps long enough that he buys a cup of coffee on the way to work instead of making it for himself at home. 
D) Tom gets fired for being late so often after his alarm clock breaks, so he moves off to the wilderness. 
E) Tom sells his broken alarm clock and uses the revenue to buy some French fries. 
A) Tom's alarm clock breaks, so he buys a new one. 
B) Tom buys a new alarm clock because he routinely sleeps through the first alarm. 
C) Tom's alarm clock breaks; now he oversleeps long enough that he buys a cup of coffee on the way to work instead of making it for himself at home. 
D) Tom gets fired for being late so often after his alarm clock breaks, so he moves off to the wilderness. 
E) Tom sells his broken alarm clock and uses the revenue to buy some French fries.

Question 8

Suppose that the economy is in equilibrium with the government budget is in deficit and with saving is less than investment. According to the circular flow model,

Accepted Answer

A) imports must exceed exports 
B) imports must be less than exports 
C) imports must equal exports 
D) imports could be less than or equal to exports 
E) it is impossible to determine anything about imports and exports with the given information 
A) imports must exceed exports 
B) imports must be less than exports 
C) imports must equal exports 
D) imports could be less than or equal to exports 
E) it is impossible to determine anything about imports and exports with the given information

Question 9

Which of the following is an injection into the circular flow?

Accepted Answer

A) interest rates 
B) saving 
C) taxes 
D) exports 
E) imports 
A) interest rates 
B) saving 
C) taxes 
D) exports 
E) imports

Question 10

Which of the following would directly reduce GDP?

Accepted Answer

A) An unscrupulous disposal company dumps barrels of toxic waste near a suburban water supply. 
B) The switch from home-cooked meals to restaurant meals lowers the nutritional value of the average diet. 
C) The town of Council Bluffs decides to fire the lifeguards at the local swimming pool. 
D) Pollution of international waters increases. 
E) Damage claims filed with auto insurance companies increase. 
A) An unscrupulous disposal company dumps barrels of toxic waste near a suburban water supply. 
B) The switch from home-cooked meals to restaurant meals lowers the nutritional value of the average diet. 
C) The town of Council Bluffs decides to fire the lifeguards at the local swimming pool. 
D) Pollution of international waters increases. 
E) Damage claims filed with auto insurance companies increase.

Question 11

Which of the following is the largest component of GDP?

Accepted Answer

A) investment (I) 
B) government spending (G) 
C) consumption (
C)  
D) net exports (X - M) 
E) taxes (T) 
A) investment (I) 
B) government spending (G) 
C) consumption (
C)  
D) net exports (X - M) 
E) taxes (T)

Question 12

You could determine the value of the GDP price index if you knew

Accepted Answer

A) current GDP at current- and base-year prices 
B) base-year GDP at current- and base-year prices 
C) current GDP at current prices and base-year GDP at base-year prices 
D) current GDP at base-year prices only 
E) current GDP at current prices only 
A) current GDP at current- and base-year prices 
B) base-year GDP at current- and base-year prices 
C) current GDP at current prices and base-year GDP at base-year prices 
D) current GDP at base-year prices only 
E) current GDP at current prices only

Question 13

Marianne and Laura are both homemakers with children. Then Laura takes a volunteer (unpaid) job at a hospital and hires Marianne to care for her preschool-age child. What happens to GDP?

Accepted Answer

A) GDP increases 
B) GDP decreases 
C) there is no change in GDP 
D) GDP increases only if Marianne gives the child better care than Laura 
E) GDP increases only if the patients receive better care now that Laura works in the hospital 
A) GDP increases 
B) GDP decreases 
C) there is no change in GDP 
D) GDP increases only if Marianne gives the child better care than Laura 
E) GDP increases only if the patients receive better care now that Laura works in the hospital

In GDP measurement, consumer spending includes

Taxes are an injection into the circular flow.

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

The CPI tends to understate the true rate of inflation.

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

The value of the films produced in the United States starring Charlie Chaplin that still exist will not be included in this year's U.S. GDP because

Which of the following actions would not increase GDP?

Suppose that the economy is in equilibrium with the government budget is in deficit and with saving is less than investment. According to the circular flow model,

Which of the following is an injection into the circular flow?

Which of the following would directly reduce GDP?

Which of the following is the largest component of GDP?

You could determine the value of the GDP price index if you knew

Marianne and Laura are both homemakers with children. Then Laura takes a volunteer (unpaid) job at a hospital and hires Marianne to care for her preschool-age child. What happens to GDP?

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and 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 7: Tracking the Us Economy

In GDP measurement, consumer spending includes

Taxes are an injection into the circular flow.

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

The CPI tends to understate the true rate of inflation.

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

The value of the films produced in the United States starring Charlie Chaplin that still exist will not be included in this year's U.S. GDP because

Which of the following actions would not increase GDP?

Suppose that the economy is in equilibrium with the government budget is in deficit and with saving is less than investment. According to the circular flow model,

Which of the following is an injection into the circular flow?

Which of the following would directly reduce GDP?

Which of the following is the largest component of GDP?

You could determine the value of the GDP price index if you knew

Marianne and Laura are both homemakers with children. Then Laura takes a volunteer (unpaid) job at a hospital and hires Marianne to care for her preschool-age child. What happens to GDP?

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and 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