Question 1

If nominal GDP of 2012 was higher than nominal GDP of 2011:

Accepted Answer

A) production in 2012 was higher than production in 2011, while prices remained unchanged. 
B) production or prices or both were higher in 2012 than in 2011. 
C) prices in 2012 were higher than prices in 2011, while production remained unchanged. 
D) production in 2012 went down and prices increased. 
A) production in 2012 was higher than production in 2011, while prices remained unchanged. 
B) production or prices or both were higher in 2012 than in 2011. 
C) prices in 2012 were higher than prices in 2011, while production remained unchanged. 
D) production in 2012 went down and prices increased.

Question 2

Most of the value added included in GDP in the United States is added by businesses rather than consumers.

Accepted Answer

A) True 
 B)False

Question 3

Including intermediate goods in the GDP calculation is:

Accepted Answer

A) the value-added method. 
B) double counting. 
C) deflating the value of GDP. 
D) the expenditure method of GDP calculation. 
A) the value-added method. 
B) double counting. 
C) deflating the value of GDP. 
D) the expenditure method of GDP calculation.

Question 4

Which of the following would NOT be included in this year's GDP?

Accepted Answer

A) the production of a television show 
B) the purchase of a new work truck 
C) the hiring of a new police officer 
D) your purchase of your neighbor's 2001 Toyota 
A) the production of a television show 
B) the purchase of a new work truck 
C) the hiring of a new police officer 
D) your purchase of your neighbor's 2001 Toyota

Question 5

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) and there is an increase in exports, which of the following is likely to happen?

Accepted Answer

A) a decrease in the nominal GDP 
B) a decrease in the real GDP 
C) a decrease in the unemployment rate 
D) a decrease in the inflation rate 
A) a decrease in the nominal GDP 
B) a decrease in the real GDP 
C) a decrease in the unemployment rate 
D) a decrease in the inflation rate

Question 6

Which one of the following transactions will be included in the official measurement of GDP?

Accepted Answer

A) Stan sold his house at a huge gain. 
B) Monica illegally downloaded movies to her laptop. 
C) Ben won the state lottery. 
D) Sean bought a new truck. 
A) Stan sold his house at a huge gain. 
B) Monica illegally downloaded movies to her laptop. 
C) Ben won the state lottery. 
D) Sean bought a new truck.

Question 7

The Dow Jones Industrial Average is likely to respond more quickly to price changes than the other indexes, so it is regarded as a warning sign of inflation.

Accepted Answer

A) True 
 B)False

Question 8

Dividing real GDP by the population:

Accepted Answer

A) results in consumption per capita. 
B) results in nominal GDP per person. 
C) gives real GDP per capita. 
D) is a measure of happiness. 
A) results in consumption per capita. 
B) results in nominal GDP per person. 
C) gives real GDP per capita. 
D) is a measure of happiness.

Question 9

Use the following to answer question 134:  
-(Table: Pizza Economy I) Look at the table Pizza Economy 1. GDP in this economy is:

Accepted Answer

A) $73,000. 
B) $65,000. 
C) $57,000. 
D) $51,000. 
A) $73,000. 
B) $65,000. 
C) $57,000. 
D) $51,000.

Question 10

A laptop computer purchased by a private individual for personal use is considered to be:

Accepted Answer

A) consumption spending. 
B) investment spending. 
C) private saving. 
D) a transfer of income. 
A) consumption spending. 
B) investment spending. 
C) private saving. 
D) a transfer of income.

Question 11

If your professor wins the lottery:

Accepted Answer

A) GDP goes up. 
B) GDP goes down. 
C) GDP is not affected. 
D) the economy will be better off. 
A) GDP goes up. 
B) GDP goes down. 
C) GDP is not affected. 
D) the economy will be better off.

Question 12

Use the following to answer questions:
Scenario: Price Index
Suppose that in the base period a college student buys 20 gallons of gasoline at $2 per gallon, 2 CDs for $13 each, and 4 movie tickets for $7 each. In the next month, the price of gasoline is $2.25 per gallon, CDs cost $12.50 each, and the price of a movie ticket is $7.50.
-In the Republic of Sildavia, a market basket of goods and services cost $130 in 2009, $140 in 2010, and $160 in 2011. Based on this information and considering 2009 to be the base year, the price index in 2011 was:

Accepted Answer

A) 100. 
B) 107.69. 
C) 123.07. 
D) 130. 
A) 100. 
B) 107.69. 
C) 123.07. 
D) 130.

Question 13

Use the following to answer questions:
Table: Real and Nominal Output  
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal GDP in year 2 is equal to:

Accepted Answer

A) $40. 
B) $60. 
C) $100. 
D) $280. 
A) $40. 
B) $60. 
C) $100. 
D) $280.

Question 14

Households indirectly own the physical capital used by firms through:

Accepted Answer

A) stocks. 
B) bonds. 
C) transfer payments. 
D) private debt. 
A) stocks. 
B) bonds. 
C) transfer payments. 
D) private debt.

Question 15

Use the following to answer questions :
Table: Per Capita GDP
  
-(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of per capita real GDP from 2011 to 2014 was:

Accepted Answer

A) 200%. 
B) 50%. 
C) -50%. 
D) -33%. 
A) 200%. 
B) 50%. 
C) -50%. 
D) -33%.

Question 16

In the circular-flow diagram, an organization that produces goods and services for sale is a:

Accepted Answer

A) government. 
B) factor. 
C) household. 
D) firm. 
A) government. 
B) factor. 
C) household. 
D) firm.

Question 17

The consumer price index is used to set payments from the U.S. government to individuals. To the extent it is biased upward, this index:

Accepted Answer

A) leads to lower benefits. 
B) raises government expenditures. 
C) lowers government expenditures. 
D) leads to lower benefits and raises government expenditures. 
A) leads to lower benefits. 
B) raises government expenditures. 
C) lowers government expenditures. 
D) leads to lower benefits and raises government expenditures.

Question 18

Use the following to answer questions :
Table: Per Capita GDP
  
-(Table: Per Capita GDP) Look at the table Per Capita GDP. Per capita nominal GDP in 2011 was:

Accepted Answer

A) $600. 
B) $400. 
C) $300. 
D) $30. 
A) $600. 
B) $400. 
C) $300. 
D) $30.

Question 19

The largest spending category in GDP is consumption.

Accepted Answer

A) True 
 B)False

Question 20

In the product markets:

Accepted Answer

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

If nominal GDP of 2012 was higher than nominal GDP of 2011:

Most of the value added included in GDP in the United States is added by businesses rather than consumers.

Including intermediate goods in the GDP calculation is:

Which of the following would NOT be included in this year's GDP?

Which one of the following transactions will be included in the official measurement of GDP?

The Dow Jones Industrial Average is likely to respond more quickly to price changes than the other indexes, so it is regarded as a warning sign of inflation.

Dividing real GDP by the population:

Use the following to answer question 134: -(Table: Pizza Economy I) Look at the table Pizza Economy 1. GDP in this economy is:

A laptop computer purchased by a private individual for personal use is considered to be:

If your professor wins the lottery:

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal GDP in year 2 is equal to:

Households indirectly own the physical capital used by firms through:

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of per capita real GDP from 2011 to 2014 was:

In the circular-flow diagram, an organization that produces goods and services for sale is a:

The consumer price index is used to set payments from the U.S. government to individuals. To the extent it is biased upward, this index:

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. Per capita nominal GDP in 2011 was:

The largest spending category in GDP is consumption.

In the product markets:

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

If nominal GDP of 2012 was higher than nominal GDP of 2011:

Most of the value added included in GDP in the United States is added by businesses rather than consumers.

Including intermediate goods in the GDP calculation is:

Which of the following would NOT be included in this year's GDP?

Which one of the following transactions will be included in the official measurement of GDP?

The Dow Jones Industrial Average is likely to respond more quickly to price changes than the other indexes, so it is regarded as a warning sign of inflation.

Dividing real GDP by the population:

Use the following to answer question 134: -(Table: Pizza Economy I) Look at the table Pizza Economy 1. GDP in this economy is:

A laptop computer purchased by a private individual for personal use is considered to be:

If your professor wins the lottery:

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal GDP in year 2 is equal to:

Households indirectly own the physical capital used by firms through:

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. The growth rate of per capita real GDP from 2011 to 2014 was:

In the circular-flow diagram, an organization that produces goods and services for sale is a:

The consumer price index is used to set payments from the U.S. government to individuals. To the extent it is biased upward, this index:

Use the following to answer questions : Table: Per Capita GDP -(Table: Per Capita GDP) Look at the table Per Capita GDP. Per capita nominal GDP in 2011 was:

The largest spending category in GDP is consumption.

In the product markets:

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