Question 1

A market basket is a hypothetical set of consumer purchases of goods and services.

Accepted Answer

A) True 
 B)False

Question 2

The inflation or deflation rate is:

Accepted Answer

A) the change in a price index divided by the initial value of the index. 
B) the change in a price index divided by the new index number. 
C) the difference between the initial price index number and the new price index number. 
D) computed by dividing the old price index number by the new price index number. 
A) the change in a price index divided by the initial value of the index. 
B) the change in a price index divided by the new index number. 
C) the difference between the initial price index number and the new price index number. 
D) computed by dividing the old price index number by the new price index number.

Question 3

Use the following to answer question :  
-(Table: CPI II) Look at the table CPI II. Prices _____ between 2010 and 2011.

Accepted Answer

A) fell by 5% 
B) fell by 4% 
C) increased by 4% 
D) increased by 5% 
A) fell by 5% 
B) fell by 4% 
C) increased by 4% 
D) increased by 5%

Question 4

Use the following to answer questions :
Table: Lemonade and Cookies
  
-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2014 was:

Accepted Answer

A) $400. 
B) $420. 
C) $425. 
D) $445. 
A) $400. 
B) $420. 
C) $425. 
D) $445.

Question 5

If during 2011, the Republic of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2011 in Sildavia were:

Accepted Answer

A) $36 billion. 
B) $38 billion. 
C) $51 billion. 
D) $64 billion. 
A) $36 billion. 
B) $38 billion. 
C) $51 billion. 
D) $64 billion.

Question 6

Flows of money, goods and services, and factors of production through the economy are all shown in the circular-flow diagram.

Accepted Answer

A) True 
 B)False

Question 7

The aggregate price level is the average of stock prices on the New York Stock Exchange.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions :
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it), which of the following is likely to happen if there is a decrease in imports?

Accepted Answer

A) an increase in the nominal GDP 
B) a decrease in the nominal GDP 
C) an increase in the unemployment rate 
D) an increase in the nominal GDP, a decrease in the nominal GDP, and an increase in the unemployment rate 
A) an increase in the nominal GDP 
B) a decrease in the nominal GDP 
C) an increase in the unemployment rate 
D) an increase in the nominal GDP, a decrease in the nominal GDP, and an increase in the unemployment rate

Question 9

Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Accepted Answer

A) $3.5 million. 
B) $16.5 million. 
C) $13 million. 
D) $15.5 million. 
A) $3.5 million. 
B) $16.5 million. 
C) $13 million. 
D) $15.5 million.

Question 10

Suppose only two countries existed. Country A imported $200 million worth of goods and services from country B. Country B imported $100 million worth of goods and services from country A. Net exports for country _____ equal _____.

Accepted Answer

A) A; $200 million 
B) B; $200 million 
C) A; -$100 million 
D) B; -$100 million 
A) A; $200 million 
B) B; $200 million 
C) A; -$100 million 
D) B; -$100 million

Question 11

Use the following to answer questions :
Table: Per Capita GDP
  
-(Table: Per Capita GDP) Look at the table Per Capita GDP. If 2011 is the base year, real GDP in 2011 was:

Accepted Answer

A) $500. 
B) $3,000. 
C) $4,000. 
D) $300,000. 
A) $500. 
B) $3,000. 
C) $4,000. 
D) $300,000.

Question 12

Which of the following is considered to be an IOU?

Accepted Answer

A) stock 
B) bond 
C) interest 
D) dividend 
A) stock 
B) bond 
C) interest 
D) dividend

Question 13

The largest component of U.S. GDP is value added in:

Accepted Answer

A) household production. 
B) business production. 
C) government production. 
D) production of goods sold overseas. 
A) household production. 
B) business production. 
C) government production. 
D) production of goods sold overseas.

Question 14

Government economists have adopted the _____ method of calculating the change in real GDP, which averages the GDP growth rate according to both an early base year and a late base year.

Accepted Answer

A) cost indexation 
B) straight-line depreciation 
C) chain-linking 
D) fixed base year 
A) cost indexation 
B) straight-line depreciation 
C) chain-linking 
D) fixed base year

Question 15

Households supply resources in the factor markets.

Accepted Answer

A) True 
 B)False

Question 16

Use the following to answer questions :
Table: Lemonade and Cookies
  
-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2014 was:

Accepted Answer

A) $400. 
B) $420. 
C) $425. 
D) $445. 
A) $400. 
B) $420. 
C) $425. 
D) $445.

Question 17

Households derive income from all of the following EXCEPT:

Accepted Answer

A) wages or labor income. 
B) interest from lending. 
C) rent from allowing firms to use their land. 
D) imports. 
A) wages or labor income. 
B) interest from lending. 
C) rent from allowing firms to use their land. 
D) imports.

Question 18

Use the following to answer questions :
Table: Peanut Butter and Jelly
  
-(Table: Peanut Butter and Jelly) Look at the table Peanut Butter and Jelly. Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly. If 2012 is the base year, what is the value of the price index in 2013?

Accepted Answer

A) 0 
B) 90 
C) 100 
D) 111.25 
A) 0 
B) 90 
C) 100 
D) 111.25

Question 19

The value of all of the following goods EXCEPT _____ is included in the calculation of aggregate output.

Accepted Answer

A) Firestone tires sold at your local garage 
B) a new shower installed in a 1920s house 
C) the six-CD player replacing the factory-mounted radio-cassette player in your car 
D) the tires on brand-new Volvo station wagons 
A) Firestone tires sold at your local garage 
B) a new shower installed in a 1920s house 
C) the six-CD player replacing the factory-mounted radio-cassette player in your car 
D) the tires on brand-new Volvo station wagons

Question 20

In the circular-flow diagram, firms:

Accepted Answer

A) supply goods and services. 
B) demand goods. 
C) supply resources. 
D) demand services. 
A) supply goods and services. 
B) demand goods. 
C) supply resources. 
D) demand services.

A market basket is a hypothetical set of consumer purchases of goods and services.

The inflation or deflation rate is:

Use the following to answer question : -(Table: CPI II) Look at the table CPI II. Prices _____ between 2010 and 2011.

Use the following to answer questions : Table: Lemonade and Cookies -(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2014 was:

If during 2011, the Republic of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2011 in Sildavia were:

Flows of money, goods and services, and factors of production through the economy are all shown in the circular-flow diagram.

The aggregate price level is the average of stock prices on the New York Stock Exchange.

Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Suppose only two countries existed. Country A imported $200 million worth of goods and services from country B. Country B imported $100 million worth of goods and services from country A. Net exports for country _ equal _.

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. If 2011 is the base year, real GDP in 2011 was:

Which of the following is considered to be an IOU?

The largest component of U.S. GDP is value added in:

Government economists have adopted the _____ method of calculating the change in real GDP, which averages the GDP growth rate according to both an early base year and a late base year.

Households supply resources in the factor markets.

Use the following to answer questions : Table: Lemonade and Cookies -(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2014 was:

Households derive income from all of the following EXCEPT:

The value of all of the following goods EXCEPT _____ is included in the calculation of aggregate output.

In the circular-flow diagram, firms:

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

A market basket is a hypothetical set of consumer purchases of goods and services.

The inflation or deflation rate is:

Use the following to answer question : -(Table: CPI II) Look at the table CPI II. Prices _____ between 2010 and 2011.

Use the following to answer questions : Table: Lemonade and Cookies -(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2014 was:

If during 2011, the Republic of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2011 in Sildavia were:

Flows of money, goods and services, and factors of production through the economy are all shown in the circular-flow diagram.

The aggregate price level is the average of stock prices on the New York Stock Exchange.

Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Suppose only two countries existed. Country A imported $200 million worth of goods and services from country B. Country B imported $100 million worth of goods and services from country A. Net exports for country _____ equal _____.

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. If 2011 is the base year, real GDP in 2011 was:

Which of the following is considered to be an IOU?

The largest component of U.S. GDP is value added in:

Government economists have adopted the _____ method of calculating the change in real GDP, which averages the GDP growth rate according to both an early base year and a late base year.

Households supply resources in the factor markets.

Use the following to answer questions : Table: Lemonade and Cookies -(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2014 was:

Households derive income from all of the following EXCEPT:

The value of all of the following goods EXCEPT _____ is included in the calculation of aggregate output.

In the circular-flow diagram, firms:

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

Suppose only two countries existed. Country A imported $200 million worth of goods and services from country B. Country B imported $100 million worth of goods and services from country A. Net exports for country _ equal _.