Question 1

Inflation is a(n):

Accepted Answer

A) rising aggregate price level. 
B) expansion of output. 
C) rise in wages. 
D) rise in the unemployment rate. 
A) rising aggregate price level. 
B) expansion of output. 
C) rise in wages. 
D) rise in the unemployment rate.

Question 2

The inflation-adjusted measure of aggregate output typically used by economists is called:

Accepted Answer

A) aggregate output. 
B) nominal gross national product. 
C) net domestic product. 
D) real gross domestic product. 
A) aggregate output. 
B) nominal gross national product. 
C) net domestic product. 
D) real gross domestic product.

Question 3

Nominal GDP:

Accepted Answer

A) has not been adjusted for changes in prices over time. 
B) has been adjusted for changes in prices over time. 
C) is a small or nominal amount of output. 
D) excludes the international sector. 
A) has not been adjusted for changes in prices over time. 
B) has been adjusted for changes in prices over time. 
C) is a small or nominal amount of output. 
D) excludes the international sector.

Question 4

Firms demand goods and services in the product markets.

Accepted Answer

A) True 
 B)False

Question 5

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 2013 was:

Accepted Answer

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

Question 6

The value, at current market prices, of the final goods and services produced during a particular period is:

Accepted Answer

A) disposable personal product. 
B) gross foreign factor output. 
C) gross personal product. 
D) gross domestic product. 
A) disposable personal product. 
B) gross foreign factor output. 
C) gross personal product. 
D) gross domestic product.

Question 7

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 4's output in nominal dollars is:

Accepted Answer

A) $6. 
B) $24. 
C) $30. 
D) $36. 
A) $6. 
B) $24. 
C) $30. 
D) $36.

Question 8

If both aggregate output and the aggregate price level increase:

Accepted Answer

A) real GDP will increase faster than nominal GDP. 
B) nominal GDP will increase faster than real GDP. 
C) it makes no difference to real or nominal GDP. 
D) real GDP and nominal GDP will increase faster than the price level. 
A) real GDP will increase faster than nominal GDP. 
B) nominal GDP will increase faster than real GDP. 
C) it makes no difference to real or nominal GDP. 
D) real GDP and nominal GDP will increase faster than the price level.

Question 9

The total volume of business sales in the economy is much larger than GDP because:

Accepted Answer

A) GDP understates the value of total output. 
B) the output approach to measuring GDP excludes intermediate transactions. 
C) GDP includes transfer payments. 
D) GDP excludes exports. 
A) GDP understates the value of total output. 
B) the output approach to measuring GDP excludes intermediate transactions. 
C) GDP includes transfer payments. 
D) GDP excludes exports.

Question 10

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. In 2010, nominal GDP was _____ nominal GDP in _____.

Accepted Answer

A) greater than; 2011 
B) greater than; 2009 
C) equal to; 2011 
D) equal to; 2009 
A) greater than; 2011 
B) greater than; 2009 
C) equal to; 2011 
D) equal to; 2009

Question 11

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 investment spending, which of the following is likely to happen?

Accepted Answer

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

Question 12

The circular-flow diagram illustrates the growth of income inequality in the United States.

Accepted Answer

A) True 
 B)False

Question 13

The most important use of GDP is to measure of the size of the economy, which can be used to compare economic performance over time or between countries.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer questions :  
-(Table: Price Index) Look at the table Price Index. What is the inflation rate between 2010 and 2011?

Accepted Answer

A) 6.8% 
B) 4% 
C) 7% 
D) 6% 
A) 6.8% 
B) 4% 
C) 7% 
D) 6%

Question 15

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 2's output in real dollars is:

Accepted Answer

A) $4. 
B) $12. 
C) $15. 
D) $16. 
A) $4. 
B) $12. 
C) $15. 
D) $16.

Question 16

In the product markets:

Accepted Answer

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

Question 17

Use the following to answer questions :
Table: Measuring GDP  
-(Table: Measuring GDP) Look at the table Measuring GDP. Exports are:

Accepted Answer

A) -$5 billion. 
B) zero. 
C) $5 billion. 
D) $10 billion. 
A) -$5 billion. 
B) zero. 
C) $5 billion. 
D) $10 billion.

Question 18

Use the following to answer questions:
Figure: Expanded Circular-Flow Model  
-(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of financial markets is:

Accepted Answer

A) $70. 
B) $110. 
C) $170. 
D) $300. 
A) $70. 
B) $110. 
C) $170. 
D) $300.

Question 19

Enchanté Inc., a designer clothing company, buys $400 worth of silk and $30 worth of accessories to produce each dress. If the value added by Enchanté is equal to $200, then according to the value-added approach, the price of the designer dress should be:

Accepted Answer

A) $630. 
B) $230. 
C) $200. 
D) $830. 
A) $630. 
B) $230. 
C) $200. 
D) $830.

Question 20

Purchases of _____ are included in GDP.

Accepted Answer

A) used goods 
B) newly issued stocks 
C) new foreign-produced investment goods 
D) new capital goods 
A) used goods 
B) newly issued stocks 
C) new foreign-produced investment goods 
D) new capital goods

Inflation is a(n):

The inflation-adjusted measure of aggregate output typically used by economists is called:

Nominal GDP:

Firms demand goods and services in the product 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 2013 is the base year, real GDP in 2013 was:

The value, at current market prices, of the final goods and services produced during a particular period is:

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 4's output in nominal dollars is:

If both aggregate output and the aggregate price level increase:

The total volume of business sales in the economy is much larger than GDP because:

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. In 2010, nominal GDP was _ nominal GDP in _.

The circular-flow diagram illustrates the growth of income inequality in the United States.

The most important use of GDP is to measure of the size of the economy, which can be used to compare economic performance over time or between countries.

Use the following to answer questions : -(Table: Price Index) Look at the table Price Index. What is the inflation rate between 2010 and 2011?

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 2's output in real dollars is:

In the product markets:

Use the following to answer questions : Table: Measuring GDP -(Table: Measuring GDP) Look at the table Measuring GDP. Exports are:

Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of financial markets is:

Enchanté Inc., a designer clothing company, buys $400 worth of silk and $30 worth of accessories to produce each dress. If the value added by Enchanté is equal to $200, then according to the value-added approach, the price of the designer dress should be:

Purchases of _____ are included in 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

Inflation is a(n):

The inflation-adjusted measure of aggregate output typically used by economists is called:

Nominal GDP:

Firms demand goods and services in the product 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 2013 is the base year, real GDP in 2013 was:

The value, at current market prices, of the final goods and services produced during a particular period is:

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 4's output in nominal dollars is:

If both aggregate output and the aggregate price level increase:

The total volume of business sales in the economy is much larger than GDP because:

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. In 2010, nominal GDP was _____ nominal GDP in _____.

The circular-flow diagram illustrates the growth of income inequality in the United States.

The most important use of GDP is to measure of the size of the economy, which can be used to compare economic performance over time or between countries.

Use the following to answer questions : -(Table: Price Index) Look at the table Price Index. What is the inflation rate between 2010 and 2011?

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 2's output in real dollars is:

In the product markets:

Use the following to answer questions : Table: Measuring GDP -(Table: Measuring GDP) Look at the table Measuring GDP. Exports are:

Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of financial markets is:

Enchanté Inc., a designer clothing company, buys $400 worth of silk and $30 worth of accessories to produce each dress. If the value added by Enchanté is equal to $200, then according to the value-added approach, the price of the designer dress should be:

Purchases of _____ are included in 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

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. In 2010, nominal GDP was _ nominal GDP in _.