Question 1

Approximately how many prices are used to calculate the consumer price index each month?

Accepted Answer

A) 9 
B) 1,000 
C) 80,000 
D) 1 million 
A) 9 
B) 1,000 
C) 80,000 
D) 1 million

Question 2

An example of a government transfer is a(n):

Accepted Answer

A) expenditure on an interstate highway. 
B) bequest from a deceased relative. 
C) Social Security payment. 
D) salary for a member of the armed forces. 
A) expenditure on an interstate highway. 
B) bequest from a deceased relative. 
C) Social Security payment. 
D) salary for a member of the armed forces.

Question 3

Real GDP per capita is:

Accepted Answer

A) a perfect measure of a country's standard of living. 
B) the only way to measure living standards among different countries. 
C) an incomplete measure of a country's standard of living. 
D) used by the United Nations to compare nations based on measures of welfare. 
A) a perfect measure of a country's standard of living. 
B) the only way to measure living standards among different countries. 
C) an incomplete measure of a country's standard of living. 
D) used by the United Nations to compare nations based on measures of welfare.

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

A) $500 billion. 
B) $850 billion. 
C) $995 billion. 
D) $1,000 billion. 
A) $500 billion. 
B) $850 billion. 
C) $995 billion. 
D) $1,000 billion.

Question 6

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. The growth of nominal GDP from 2013 to 2014 was due to approximately a _____ increase in prices and approximately a _____ increase in aggregate output.

Accepted Answer

A) 11.25%; 0% 
B) 0%; 45% 
C) 5%; 11.25% 
D) 6.25%; 5% 
A) 11.25%; 0% 
B) 0%; 45% 
C) 5%; 11.25% 
D) 6.25%; 5%

Question 7

If the consumer price index is 180 in year 1 and 190 in year 2, the inflation rate between year 1 and year 2 is about:

Accepted Answer

A) 5.26%. 
B) 5.56%. 
C) 6.5%. 
D) 10%. 
A) 5.26%. 
B) 5.56%. 
C) 6.5%. 
D) 10%.

Question 8

The aggregate price level is a measure of the overall level of prices in the economy.

Accepted Answer

A) True 
 B)False

Question 9

GDP in the United States was $5,803 billion in 1994 and $11,734 billion in 2008, so we can conclude that aggregate output roughly doubled over the 14-year period in the United States.

Accepted Answer

A) True 
 B)False

Question 10

If nominal GDP decreases from one year to the next, _____ must have fallen.

Accepted Answer

A) prices 
B) real GDP 
C) prices and real GDP 
D) output or prices or both 
A) prices 
B) real GDP 
C) prices and real GDP 
D) output or prices or both

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 a decrease in exports, which of the following is likely to happen?

Accepted Answer

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

Question 12

Nominal GDP is:

Accepted Answer

A) inflation-adjusted GDP. 
B) real GDP minus depreciation. 
C) current-dollar GDP. 
D) constant-dollar GDP. 
A) inflation-adjusted GDP. 
B) real GDP minus depreciation. 
C) current-dollar GDP. 
D) constant-dollar GDP.

Question 13

If the cost of the market basket in the base year is $5,000 and the cost of the market basket in the current year is $5,100, the price index for the current year is 102.

Accepted Answer

A) True 
 B)False

Question 14

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. What is the value of the market basket in 2013?

Accepted Answer

A) $3.35 
B) $40 
C) $42 
D) $44.50 
A) $3.35 
B) $40 
C) $42 
D) $44.50

Question 15

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. What is the value of the market basket in 2012?

Accepted Answer

A) $3 
B) $40 
C) $42 
D) $44.50 
A) $3 
B) $40 
C) $42 
D) $44.50

Question 16

Suppose that the market basket for the university student price index (USPI) consists of 4 textbooks and 100 gallons of gasoline. In 2010, the base year for this index, textbooks cost $50 each and gas costs $1 per gallon. In 2011, textbooks still cost $50 each and gasoline costs $4 per gallon. The USPI for 2011 is:

Accepted Answer

A) 250. 
B) 200. 
C) 150. 
D) 100. 
A) 250. 
B) 200. 
C) 150. 
D) 100.

Question 17

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 a decrease in government spending, which of the following is likely to happen?

Accepted Answer

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

Question 18

Which of the following causes an outflow of funds from a domestic economy?

Accepted Answer

A) household savings 
B) government tax collections 
C) government transfer payments 
D) imports 
A) household savings 
B) government tax collections 
C) government transfer payments 
D) imports

Question 19

Use the following to answer questions:
Table: Real and Nominal Output  
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. The price index in year 1, using year 4 as the base period, is:

Accepted Answer

A) 25 
B) 50. 
C) 100. 
D) 150. 
A) 25 
B) 50. 
C) 100. 
D) 150.

Question 20

An intermediate good would be:

Accepted Answer

A) a new boat to be used for vacations. 
B) lumber used to build a house. 
C) payments to military personnel. 
D) a professor's salary. 
A) a new boat to be used for vacations. 
B) lumber used to build a house. 
C) payments to military personnel. 
D) a professor's salary.

Approximately how many prices are used to calculate the consumer price index each month?

An example of a government transfer is a(n):

Real GDP per capita is:

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

If the consumer price index is 180 in year 1 and 190 in year 2, the inflation rate between year 1 and year 2 is about:

The aggregate price level is a measure of the overall level of prices in the economy.

GDP in the United States was $5,803 billion in 1994 and $11,734 billion in 2008, so we can conclude that aggregate output roughly doubled over the 14-year period in the United States.

If nominal GDP decreases from one year to the next, _____ must have fallen.

Nominal GDP is:

If the cost of the market basket in the base year is $5,000 and the cost of the market basket in the current year is $5,100, the price index for the current year is 102.

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. What is the value of the market basket in 2013?

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. What is the value of the market basket in 2012?

Which of the following causes an outflow of funds from a domestic economy?

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. The price index in year 1, using year 4 as the base period, is:

An intermediate good would be:

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

Approximately how many prices are used to calculate the consumer price index each month?

An example of a government transfer is a(n):

Real GDP per capita is:

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

If the consumer price index is 180 in year 1 and 190 in year 2, the inflation rate between year 1 and year 2 is about:

The aggregate price level is a measure of the overall level of prices in the economy.

GDP in the United States was $5,803 billion in 1994 and $11,734 billion in 2008, so we can conclude that aggregate output roughly doubled over the 14-year period in the United States.

If nominal GDP decreases from one year to the next, _____ must have fallen.

Nominal GDP is:

If the cost of the market basket in the base year is $5,000 and the cost of the market basket in the current year is $5,100, the price index for the current year is 102.

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. What is the value of the market basket in 2013?

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. What is the value of the market basket in 2012?

Which of the following causes an outflow of funds from a domestic economy?

Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. The price index in year 1, using year 4 as the base period, is:

An intermediate good would be:

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