Question 1

Aggregate output is the total quantity of final goods and services produced.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following would NOT be a part of GDP?

Accepted Answer

A) used car sales 
B) new residential construction 
C) a new truck purchased by a building contractor 
D) cable TV service purchased for a home 
A) used car sales 
B) new residential construction 
C) a new truck purchased by a building contractor 
D) cable TV service purchased for a home A

Question 3

Use the following to answer questions :
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

Accepted Answer

A) $100 
B) $400 
C) $500 
D) $600 
A) $100 
B) $400 
C) $500 
D) $600 C

Question 4

Assume that the consumer price index for 2009 was 72.6 and for 2010 was 82.4. What was the inflation rate between the two years?

Accepted Answer

A) 0.88% 
B) 9.8% 
C) 11.9% 
D) 13.5% 
A) 0.88% 
B) 9.8% 
C) 11.9% 
D) 13.5%

Question 5

Households supply goods and services in the product markets.

Accepted Answer

A) True 
 B)False

Question 6

Use the following to answer questions :
Table: Price and Output Data  
-(Table: Price and Output Data) Look at the table Price and Output Data. Between years 2 and 3 the amount of change in nominal GDP due to inflation was:

Accepted Answer

A) 100%. 
B) 34%. 
C) 22%. 
D) 5%. 
A) 100%. 
B) 34%. 
C) 22%. 
D) 5%.

Question 7

Flows into financial markets are equal to the sum of:

Accepted Answer

A) all foreign lending. 
B) foreign lending and purchases of stock plus private saving. 
C) borrowing and stock issues plus foreign borrowing and sales of stock. 
D) private saving. 
A) all foreign lending. 
B) foreign lending and purchases of stock plus private saving. 
C) borrowing and stock issues plus foreign borrowing and sales of stock. 
D) private saving.

Question 8

If nominal GDP increases from one year to the next, _____ must have risen.

Accepted Answer

A) prices 
B) real GDP 
C) prices and real GDP 
D) output or prices or both 
A) prices 
B) real GDP 
C) prices and real GDP 
D) output or prices or both

Question 9

GDP calculated via factor payments includes:

Accepted Answer

A) wages, interest payments, rent, and profits. 
B) taxes, wages, interest payments, and rents. 
C) rents, profits, value-added adjustments, and taxes. 
D) consumption, investment, and government. 
A) wages, interest payments, rent, and profits. 
B) taxes, wages, interest payments, and rents. 
C) rents, profits, value-added adjustments, and taxes. 
D) consumption, investment, and government.

Question 10

Income tax brackets are indexed to the consumer price index.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer questions :
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is disposable income?

Accepted Answer

A) $0 
B) $100 
C) $400 
D) $500 
A) $0 
B) $100 
C) $400 
D) $500

Question 12

Suppose that Mr. Green Jeans sells $5,000 of wheat to Big Ben Bakery. Big Ben uses the wheat to make flour and then hamburger buns, which it sells to Hamburger Heaven for $11,000. Hamburger Heaven also buys $20,000 of beef from a rancher. Hamburger Heaven uses the beef and buns to make 10,000 hamburgers, which are sold for $5 each. How much do these transactions add to GDP?

Accepted Answer

A) $86,000 
B) $36,000 
C) $31,000 
D) $50,000 
A) $86,000 
B) $36,000 
C) $31,000 
D) $50,000

Question 13

Which one of the following is an example of consumption expenditure?

Accepted Answer

A) Samantha bought an oven for her cooking show on Food Network. 
B) Stephanie bought a laptop for her brother. 
C) Jim purchased 200 shares of Google stock. 
D) Herman Smith spent $1,500 to buy a used car for his son. 
A) Samantha bought an oven for her cooking show on Food Network. 
B) Stephanie bought a laptop for her brother. 
C) Jim purchased 200 shares of Google stock. 
D) Herman Smith spent $1,500 to buy a used car for his son.

Question 14

Which of the following transactions would NOT be counted in GDP?

Accepted Answer

A) Nike builds a retail store. 
B) Your mother buys a pound of Washington-grown apples. 
C) Your mother buys 100 shares of Nike stock. 
D) The Indiana state government pays for repair of a damaged bridge over the Wabash River. 
A) Nike builds a retail store. 
B) Your mother buys a pound of Washington-grown apples. 
C) Your mother buys 100 shares of Nike stock. 
D) The Indiana state government pays for repair of a damaged bridge over the Wabash River.

Question 15

Government borrowing is:

Accepted Answer

A) the amount of funds raised by government in financial markets. 
B) government spending on goods and services. 
C) government tax revenues. 
D) the amount of funds raised by government in the financial markets, government spending on goods and services, and government tax revenues. 
A) the amount of funds raised by government in financial markets. 
B) government spending on goods and services. 
C) government tax revenues. 
D) the amount of funds raised by government in the financial markets, government spending on goods and services, and government tax revenues.

Question 16

A country's living standard is best measured by:

Accepted Answer

A) per capita nominal GDP. 
B) real GDP. 
C) nominal GDP. 
D) per capita real GDP. 
A) per capita nominal GDP. 
B) real GDP. 
C) nominal GDP. 
D) per capita real GDP.

Question 17

For measuring GDP as spending on domestically produced final goods and services, spending on inputs like steel for manufacturing a car is counted in GDP, but spending on a new factory in which the cars are produced is NOT counted in GDP.

Accepted Answer

A) True 
 B)False

Question 18

Don has built an addition to his house. This transaction will be:

Accepted Answer

A) not included in GDP because it is not produced for the marketplace. 
B) included in GDP because Don is a professional builder. 
C) not included in GDP because it is an intermediate good. 
D) included in GDP because building is Don's hobby. 
A) not included in GDP because it is not produced for the marketplace. 
B) included in GDP because Don is a professional builder. 
C) not included in GDP because it is an intermediate good. 
D) included in GDP because building is Don's hobby.

Question 19

If real GDP falls when nominal GDP increases, then prices have fallen.

Accepted Answer

A) True 
 B)False

Question 20

Real GDP is nominal GDP adjusted for:

Accepted Answer

A) double counting. 
B) changes in prices. 
C) population. 
D) imports. 
A) double counting. 
B) changes in prices. 
C) population. 
D) imports.

Aggregate output is the total quantity of final goods and services produced.

Which of the following would NOT be a part of GDP?

Use the following to answer questions : Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

Assume that the consumer price index for 2009 was 72.6 and for 2010 was 82.4. What was the inflation rate between the two years?

Households supply goods and services in the product markets.

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Between years 2 and 3 the amount of change in nominal GDP due to inflation was:

Flows into financial markets are equal to the sum of:

If nominal GDP increases from one year to the next, _____ must have risen.

GDP calculated via factor payments includes:

Income tax brackets are indexed to the consumer price index.

Use the following to answer questions : Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is disposable income?

Which one of the following is an example of consumption expenditure?

Which of the following transactions would NOT be counted in GDP?

Government borrowing is:

A country's living standard is best measured by:

For measuring GDP as spending on domestically produced final goods and services, spending on inputs like steel for manufacturing a car is counted in GDP, but spending on a new factory in which the cars are produced is NOT counted in GDP.

Don has built an addition to his house. This transaction will be:

If real GDP falls when nominal GDP increases, then prices have fallen.

Real GDP is nominal GDP adjusted for:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 7: Gdp and Cpi: Tracking the Macroeconomy

Aggregate output is the total quantity of final goods and services produced.

Which of the following would NOT be a part of GDP?

Use the following to answer questions : Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

Assume that the consumer price index for 2009 was 72.6 and for 2010 was 82.4. What was the inflation rate between the two years?

Households supply goods and services in the product markets.

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Between years 2 and 3 the amount of change in nominal GDP due to inflation was:

Flows into financial markets are equal to the sum of:

If nominal GDP increases from one year to the next, _____ must have risen.

GDP calculated via factor payments includes:

Income tax brackets are indexed to the consumer price index.

Use the following to answer questions : Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is disposable income?

Which one of the following is an example of consumption expenditure?

Which of the following transactions would NOT be counted in GDP?

Government borrowing is:

A country's living standard is best measured by:

For measuring GDP as spending on domestically produced final goods and services, spending on inputs like steel for manufacturing a car is counted in GDP, but spending on a new factory in which the cars are produced is NOT counted in GDP.

Don has built an addition to his house. This transaction will be:

If real GDP falls when nominal GDP increases, then prices have fallen.

Real GDP is nominal GDP adjusted for:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters