Question 1

An example of investment spending is the purchase of a:

Accepted Answer

A) bond by a banker. 
B) loaf of bread by a restaurant. 
C) new tractor by a farmer. 
D) ticket to a football game by a student. 
A) bond by a banker. 
B) loaf of bread by a restaurant. 
C) new tractor by a farmer. 
D) ticket to a football game by a student.

Question 2

Use the following to answer questions :
Scenario: Good A and Good B
  
-(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP was greatest in:

Accepted Answer

A) 2009 
B) 2010. 
C) 2011. 
D) its base year always. 
A) 2009 
B) 2010. 
C) 2011. 
D) its base year always.

Question 3

A laptop computer that is purchased by an accounting firm is considered to be:

Accepted Answer

A) consumption spending. 
B) investment spending. 
C) private saving. 
D) a pretax dividend. 
A) consumption spending. 
B) investment spending. 
C) private saving. 
D) a pretax dividend.

Question 4

If real GDP rises while nominal GDP falls, then prices on average have:

Accepted Answer

A) risen. 
B) fallen. 
C) stayed the same. 
D) decreased and then been offset by an equal increase. 
A) risen. 
B) fallen. 
C) stayed the same. 
D) decreased and then been offset by an equal increase.

Question 5

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.
-(Scenario: Price Index) Look at the scenario Price Index. The price index for the second month is:

Accepted Answer

A) 94. 
B) 106.4. 
C) 100. 
D) 101.1. 
A) 94. 
B) 106.4. 
C) 100. 
D) 101.1.

Question 6

The construction of new housing is considered part of:

Accepted Answer

A) investment spending. 
B) consumption. 
C) government purchases of goods and services. 
D) private saving. 
A) investment spending. 
B) consumption. 
C) government purchases of goods and services. 
D) private saving.

Question 7

Use the following to answer questions :  
-(Table: GDP II) Look at the table GDP II. Calculate the GDP deflator for 2011.

Accepted Answer

A) 111 
B) 104 
C) 90 
D) 96 
A) 111 
B) 104 
C) 90 
D) 96

Question 8

GDP per capita measures the value of all intermediate goods and services produced in the economy.

Accepted Answer

A) True 
 B)False

Question 9

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 hybrid truck 
C) the hiring of a new schoolteacher 
D) your purchase of your neighbor's house, which was built in 1994 
A) the production of a television show 
B) the purchase of a new hybrid truck 
C) the hiring of a new schoolteacher 
D) your purchase of your neighbor's house, which was built in 1994

Question 10

A single woman attorney hires a local firm to mow the grass, rake the leaves, and trim the rose bushes. After several years she and the owner of the lawn service fall madly in love and get married. After the honeymoon, her new husband takes care of the yard maintenance, and she no longer pays his company the monthly fee. What has happened to GDP?

Accepted Answer

Official GDP accounts would fall. While

Question 11

Disposable income in a particular period is:

Accepted Answer

A) total earned income. 
B) earned income plus government transfer payments. 
C) earned income plus government transfer payments less taxes. 
D) earned income plus government transfer payments less taxes and savings. 
A) total earned income. 
B) earned income plus government transfer payments. 
C) earned income plus government transfer payments less taxes. 
D) earned income plus government transfer payments less taxes and savings.

Question 12

In the United States, government spending accounts for approximately_____ of GDP.

Accepted Answer

A) 5% 
B) 10% 
C) 20% 
D) 30% 
A) 5% 
B) 10% 
C) 20% 
D) 30%

Question 13

Most households derive the bulk of their income from:

Accepted Answer

A) wages. 
B) interest. 
C) profit. 
D) rent. 
A) wages. 
B) interest. 
C) profit. 
D) rent.

Question 14

Aggregate output is:

Accepted Answer

A) equal to consumer spending on goods and services. 
B) the value of new construction, changes in inventories, and the purchase of physical capital by businesses. 
C) the total quantity of intermediate goods produced by an economy. 
D) the total quantity of final goods and services produced by an economy. 
A) equal to consumer spending on goods and services. 
B) the value of new construction, changes in inventories, and the purchase of physical capital by businesses. 
C) the total quantity of intermediate goods produced by an economy. 
D) the total quantity of final goods and services produced by an economy.

Question 15

A firm is an organization that buys goods and/or services and produces resources.

Accepted Answer

A) True 
 B)False

Question 16

If the price index in year 1 is 110 and the price index in year 2 is 115, then the inflation rate is exactly 5% from year 1 to year 2.

Accepted Answer

A) True 
 B)False

Question 17

Gross domestic product is the economy's total production of _____ for a given period.

Accepted Answer

A) goods and services 
B) final goods and services 
C) intermediate goods and services 
D) consumer goods and services 
A) goods and services 
B) final goods and services 
C) intermediate goods and services 
D) consumer goods and services

Question 18

In the circular-flow diagram, government purchases of goods and services are financed by:

Accepted Answer

A) tax revenues. 
B) tax revenues net of transfer payments. 
C) tax revenues net of transfer payments plus government borrowing from financial markets. 
D) tax revenues plus government borrowing from financial markets. 
A) tax revenues. 
B) tax revenues net of transfer payments. 
C) tax revenues net of transfer payments plus government borrowing from financial markets. 
D) tax revenues plus government borrowing from financial markets.

Question 19

The instrument by which a household makes a loan to a firm and the firm pays interest to the household is known as:

Accepted Answer

A) a stock. 
B) a bond. 
C) a transfer payment. 
D) disposable income. 
A) a stock. 
B) a bond. 
C) a transfer payment. 
D) disposable income.

Question 20

Use the following to answer questions :
Table: Pizza Economy III
  
-(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita between 2010 and 2011 grew at a rate of:

Accepted Answer

A) -50%. 
B) -25%. 
C) 50%. 
D) 75%. 
A) -50%. 
B) -25%. 
C) 50%. 
D) 75%.

An example of investment spending is the purchase of a:

Use the following to answer questions : Scenario: Good A and Good B -(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP was greatest in:

A laptop computer that is purchased by an accounting firm is considered to be:

If real GDP rises while nominal GDP falls, then prices on average have:

The construction of new housing is considered part of:

Use the following to answer questions : -(Table: GDP II) Look at the table GDP II. Calculate the GDP deflator for 2011.

GDP per capita measures the value of all intermediate goods and services produced in the economy.

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

Disposable income in a particular period is:

In the United States, government spending accounts for approximately_____ of GDP.

Most households derive the bulk of their income from:

Aggregate output is:

A firm is an organization that buys goods and/or services and produces resources.

If the price index in year 1 is 110 and the price index in year 2 is 115, then the inflation rate is exactly 5% from year 1 to year 2.

Gross domestic product is the economy's total production of _____ for a given period.

In the circular-flow diagram, government purchases of goods and services are financed by:

The instrument by which a household makes a loan to a firm and the firm pays interest to the household is known as:

Use the following to answer questions : Table: Pizza Economy III -(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita between 2010 and 2011 grew at a rate of:

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

An example of investment spending is the purchase of a:

Use the following to answer questions : Scenario: Good A and Good B -(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP was greatest in:

A laptop computer that is purchased by an accounting firm is considered to be:

If real GDP rises while nominal GDP falls, then prices on average have:

The construction of new housing is considered part of:

Use the following to answer questions : -(Table: GDP II) Look at the table GDP II. Calculate the GDP deflator for 2011.

GDP per capita measures the value of all intermediate goods and services produced in the economy.

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

Disposable income in a particular period is:

In the United States, government spending accounts for approximately_____ of GDP.

Most households derive the bulk of their income from:

Aggregate output is:

A firm is an organization that buys goods and/or services and produces resources.

If the price index in year 1 is 110 and the price index in year 2 is 115, then the inflation rate is exactly 5% from year 1 to year 2.

Gross domestic product is the economy's total production of _____ for a given period.

In the circular-flow diagram, government purchases of goods and services are financed by:

The instrument by which a household makes a loan to a firm and the firm pays interest to the household is known as:

Use the following to answer questions : Table: Pizza Economy III -(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,380 in 2011, real GDP per capita between 2010 and 2011 grew at a rate of:

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