Question 1

Which of the following is FALSE? The consumer price index:

Accepted Answer

A) reflects changes in the prices of goods typically purchased by consumers. 
B) contains thousands of goods and services. 
C) is calculated by the Bureau of Labor Statistics. 
D) changes only in the base year, every five to seven years. 
A) reflects changes in the prices of goods typically purchased by consumers. 
B) contains thousands of goods and services. 
C) is calculated by the Bureau of Labor Statistics. 
D) changes only in the base year, every five to seven years.

Question 2

Spending on medical care is the largest portion of the consumer price index.

Accepted Answer

A) True 
 B)False

Question 3

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. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:

Accepted Answer

A) -5%. 
B) 4.7%. 
C) 11.25%. 
D) 20%. 
A) -5%. 
B) 4.7%. 
C) 11.25%. 
D) 20%.

Question 4

The government returns part of the money it raises from taxes in the form of government transfers.

Accepted Answer

A) True 
 B)False

Question 5

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 nominal GDP was:

Accepted Answer

A) 10%. 
B) 20%. 
C) 25%. 
D) 33%. 
A) 10%. 
B) 20%. 
C) 25%. 
D) 33%.

Question 6

Nominal GDP may be used to compare:

Accepted Answer

A) the dollar amount of final goods produced in different years. 
B) the price of final goods times the number of goods produced in one year. 
C) output if prices are increasing. 
D) living standards among different countries. 
A) the dollar amount of final goods produced in different years. 
B) the price of final goods times the number of goods produced in one year. 
C) output if prices are increasing. 
D) living standards among different countries.

Question 7

Use the following to answer questions:
Figure: Expanded Circular-Flow Model  
-(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. What is the value of net exports?

Accepted Answer

A) -$20 
B) $20 
C) $50 
D) $130 
A) -$20 
B) $20 
C) $50 
D) $130

Question 8

Which of the following is the best definition of GDP?

Accepted Answer

A) the total value of all final goods and services produced in the economy during a given year 
B) the total value of all goods and services produced in the economy during a given year 
C) the total value of all primary, intermediate, and final goods and services produced in the economy during a given year 
D) the total value of all goods and services produced and sold in the economy during a given year 
A) the total value of all final goods and services produced in the economy during a given year 
B) the total value of all goods and services produced in the economy during a given year 
C) the total value of all primary, intermediate, and final goods and services produced in the economy during a given year 
D) the total value of all goods and services produced and sold in the economy during a given year

Question 9

Spending on housing is the largest portion of the consumer price index.

Accepted Answer

A) True 
 B)False

Question 10

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that when the rate of inflation increases, the _____ Social Security recipients _____.

Accepted Answer

A) market basket for; increases 
B) market basket for; decreases 
C) payments to; increase 
D) payments to; decrease 
A) market basket for; increases 
B) market basket for; decreases 
C) payments to; increase 
D) payments to; decrease

Question 11

If GDP increases from $10 trillion to $12 trillion in a year, it could mean that aggregate output grew by 20%, that prices increased 20%, or that prices and aggregate output both increased.

Accepted Answer

A) True 
 B)False

Question 12

Firms supply goods and services in the product markets.

Accepted Answer

A) True 
 B)False

Question 13

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 change in prices from the first to the second month is:

Accepted Answer

A) 1.1%. 
B) 94%. 
C) 6.4%. 
D) -6%. 
A) 1.1%. 
B) 94%. 
C) 6.4%. 
D) -6%.

Question 14

Which of the following statements is TRUE?

Accepted Answer

A) The producer price index is just another term for the GDP deflator. 
B) Changes in the producer price index generally follow changes in the consumer price index. 
C) The producer price index measures the cost of a basket of goods typically purchased by producers. 
D) The producer price index shows how the cost of all purchases by urban families changes. 
A) The producer price index is just another term for the GDP deflator. 
B) Changes in the producer price index generally follow changes in the consumer price index. 
C) The producer price index measures the cost of a basket of goods typically purchased by producers. 
D) The producer price index shows how the cost of all purchases by urban families changes.

Question 15

The producer price index measures changes in the cost of a market basket of raw commodities, such as steel, electricity, and coal.

Accepted Answer

A) True 
 B)False

Question 16

Investment spending is spending on:

Accepted Answer

A) productive physical capital. 
B) stocks. 
C) mutual funds. 
D) corporate bonds. 
A) productive physical capital. 
B) stocks. 
C) mutual funds. 
D) corporate bonds.

Question 17

A market basket used to measure the aggregate price level is a group of stocks that the wealthiest investors own.

Accepted Answer

A) True 
 B)False

Question 18

Real GDP will increase if aggregate output increases.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions :
Table: Price and Output Data  
-(Table: Price and Output Data) Look at the table Price and Output Data. The value of year 3's output in nominal dollars is:

Accepted Answer

A) $5. 
B) $5.20. 
C) $20. 
D) $36. 
A) $5. 
B) $5.20. 
C) $20. 
D) $36.

Question 20

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

Accepted Answer

A) $200 
B) $700 
C) $1,000 
D) $1,080 
A) $200 
B) $700 
C) $1,000 
D) $1,080

Which of the following is FALSE? The consumer price index:

Spending on medical care is the largest portion of the consumer price index.

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. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:

The government returns part of the money it raises from taxes in the form of government transfers.

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 nominal GDP was:

Nominal GDP may be used to compare:

Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. What is the value of net exports?

Which of the following is the best definition of GDP?

Spending on housing is the largest portion of the consumer price index.

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that when the rate of inflation increases, the _ Social Security recipients _.

If GDP increases from $10 trillion to $12 trillion in a year, it could mean that aggregate output grew by 20%, that prices increased 20%, or that prices and aggregate output both increased.

Firms supply goods and services in the product markets.

Which of the following statements is TRUE?

The producer price index measures changes in the cost of a market basket of raw commodities, such as steel, electricity, and coal.

Investment spending is spending on:

A market basket used to measure the aggregate price level is a group of stocks that the wealthiest investors own.

Real GDP will increase if aggregate output increases.

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. The value of year 3's output in nominal dollars is:

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

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

Which of the following is FALSE? The consumer price index:

Spending on medical care is the largest portion of the consumer price index.

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. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:

The government returns part of the money it raises from taxes in the form of government transfers.

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 nominal GDP was:

Nominal GDP may be used to compare:

Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. What is the value of net exports?

Which of the following is the best definition of GDP?

Spending on housing is the largest portion of the consumer price index.

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that when the rate of inflation increases, the _____ Social Security recipients _____.

If GDP increases from $10 trillion to $12 trillion in a year, it could mean that aggregate output grew by 20%, that prices increased 20%, or that prices and aggregate output both increased.

Firms supply goods and services in the product markets.

Which of the following statements is TRUE?

The producer price index measures changes in the cost of a market basket of raw commodities, such as steel, electricity, and coal.

Investment spending is spending on:

A market basket used to measure the aggregate price level is a group of stocks that the wealthiest investors own.

Real GDP will increase if aggregate output increases.

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. The value of year 3's output in nominal dollars is:

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

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

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that when the rate of inflation increases, the _ Social Security recipients _.