Question 1

All of the following are a stock except:

Accepted Answer

A)  a consumer's wealth. 
B)  the government budget deficit. 
C)  the number of unemployed people. 
D)  the amount of capital in the economy. 
A)  a consumer's wealth. 
B)  the government budget deficit. 
C)  the number of unemployed people. 
D)  the amount of capital in the economy. B

Question 2

Nominal GDP means the value of goods and services is measured in ______ prices.

Accepted Answer

A)  current 
B)  real 
C)  constant 
D)  average 
A)  current 
B)  real 
C)  constant 
D)  average A

Question 3

Assume that a bakery hires more workers and pays them wages and that the workers produce more bread.GDP increases in all of the following cases except when the bread:

Accepted Answer

A)  is sold to households. 
B)  is stored away for later sale. 
C)  grows stale and is thrown away. 
D)  is sold to other firms. 
A)  is sold to households. 
B)  is stored away for later sale. 
C)  grows stale and is thrown away. 
D)  is sold to other firms. C

Question 4

National income equals net national product:

Accepted Answer

A)  minus depreciation. 
B)  plus depreciation. 
C)  minus indirect business taxes. 
D)  plus indirect business taxes. 
A)  minus depreciation. 
B)  plus depreciation. 
C)  minus indirect business taxes. 
D)  plus indirect business taxes.

Question 5

The best measure of the economic satisfaction of the members of a society is:

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  the rate of inflation. 
D)  the value of corporate profits. 
A)  nominal GDP. 
B)  real GDP. 
C)  the rate of inflation. 
D)  the value of corporate profits.

Question 6

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s)per year.

Accepted Answer

A)  overestimates; 0.5 
B)  overestimates; 2.0 
C)  underestimates; 0.5 
D)  underestimates; 2.0 
A)  overestimates; 0.5 
B)  overestimates; 2.0 
C)  underestimates; 0.5 
D)  underestimates; 2.0

Question 7

Okun's Law is the _______ relationship between real GDP and the _________.

Accepted Answer

A)  negative; unemployment rate 
B)  negative; inflation rate 
C)  positive; unemployment rate 
D)  positive; inflation rate 
A)  negative; unemployment rate 
B)  negative; inflation rate 
C)  positive; unemployment rate 
D)  positive; inflation rate

Question 8

When a firm sells a product out of inventory,GDP:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  is not changed. 
D)  increases or decreases,depending on the year the product was produced. 
A)  increases. 
B)  decreases. 
C)  is not changed. 
D)  increases or decreases,depending on the year the product was produced.

Question 9

In the national income accounts,net exports equal:

Accepted Answer

A)  exported goods minus imported goods. 
B)  exported goods and services minus imported goods and services. 
C)  exported goods minus imported services. 
D)  exported goods and services plus imported goods and services. 
A)  exported goods minus imported goods. 
B)  exported goods and services minus imported goods and services. 
C)  exported goods minus imported services. 
D)  exported goods and services plus imported goods and services.

Question 10

To avoid double counting in the computation of GDP,only the value of ______ goods are included.

Accepted Answer

A)  final 
B)  used 
C)  intermediate 
D)  investment 
A)  final 
B)  used 
C)  intermediate 
D)  investment

Question 11

The GDP deflator is a:

Accepted Answer

A)  Laspeyres price index. 
B)  Paasche price index. 
C)  Laspeyres quantity index. 
D)  Paasche quantity index. 
A)  Laspeyres price index. 
B)  Paasche price index. 
C)  Laspeyres quantity index. 
D)  Paasche quantity index.

Question 12

In principle,the GDP accounts should-but do not-have an imputation for:

Accepted Answer

A)  housing services enjoyed by homeowners. 
B)  rental services of automobiles driven by owners. 
C)  meals cooked in restaurants. 
D)  housing services enjoyed by renters. 
A)  housing services enjoyed by homeowners. 
B)  rental services of automobiles driven by owners. 
C)  meals cooked in restaurants. 
D)  housing services enjoyed by renters.

Question 13

There are a number of measures of aggregate economic activity,such as GDP,GNP,national income,personal income,and disposable personal income.Each of these measures can be a good indicator depending on the issue under consideration.For each of the following issues,give your reasons for selecting one of the measures just mentioned as the best indicator to use in studying the issue:
a.The proportion of income households save
b.The relative share of earnings going to labour versus capital
c.The total output of new final goods and services.

Accepted Answer

a. Disposable personal income provides a

Question 14

An increase in the price of goods bought by firms and the government will show up in:

Accepted Answer

A)  the CPI but not in the GDP deflator. 
B)  the GDP deflator but not in the CPI. 
C)  both the CPI and the GDP deflator. 
D)  neither the CPI nor the GDP deflator. 
A)  the CPI but not in the GDP deflator. 
B)  the GDP deflator but not in the CPI. 
C)  both the CPI and the GDP deflator. 
D)  neither the CPI nor the GDP deflator.

Question 15

The largest component of national income is:

Accepted Answer

A)  corporate profits. 
B)  compensation of employees. 
C)  proprietors' incomes. 
D)  net interest. 
A)  corporate profits. 
B)  compensation of employees. 
C)  proprietors' incomes. 
D)  net interest.

Question 16

The value added on an item produced means:

Accepted Answer

A)  a firm's profits on the item sold. 
B)  the value of the labor inputs in the production of an item. 
C)  the value of a firm's output less the value of its costs. 
D)  the value of a firm's output less the value of the intermediate goods that the firm purchases. 
A)  a firm's profits on the item sold. 
B)  the value of the labor inputs in the production of an item. 
C)  the value of a firm's output less the value of its costs. 
D)  the value of a firm's output less the value of the intermediate goods that the firm purchases.

Question 17

The labour force equals the:

Accepted Answer

A)  adult population. 
B)  number of employed individuals. 
C)  number of unemployed individuals. 
D)  number of employed and unemployed individuals. 
A)  adult population. 
B)  number of employed individuals. 
C)  number of unemployed individuals. 
D)  number of employed and unemployed individuals.

Question 18

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Accepted Answer

A)  1.5. 
B)  1.7. 
C)  1.9. 
D)  2.0. 
A)  1.5. 
B)  1.7. 
C)  1.9. 
D)  2.0.

Question 19

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Accepted Answer

Some possible, but not all, explanations

Question 20

As a percentage of GNP (in 2012),depreciation (also called capital consumption allowances)amounts to approximately ______ percent.

Accepted Answer

A)  20 
B)  16 
C)  8 
D)  3 
A)  20 
B)  16 
C)  8 
D)  3

All of the following are a stock except:

Nominal GDP means the value of goods and services is measured in ______ prices.

Assume that a bakery hires more workers and pays them wages and that the workers produce more bread.GDP increases in all of the following cases except when the bread:

National income equals net national product:

The best measure of the economic satisfaction of the members of a society is:

Economists have estimated that the CPI inflation by approximately percentage point(s)per year.

Okun's Law is the _ relationship between real GDP and the ___.

When a firm sells a product out of inventory,GDP:

In the national income accounts,net exports equal:

To avoid double counting in the computation of GDP,only the value of ______ goods are included.

The GDP deflator is a:

In principle,the GDP accounts should-but do not-have an imputation for:

An increase in the price of goods bought by firms and the government will show up in:

The largest component of national income is:

The value added on an item produced means:

The labour force equals the:

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

As a percentage of GNP (in 2012),depreciation (also called capital consumption allowances)amounts to approximately ______ percent.

The Science of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

Filters

Exam 2: The Data of Macroeconomics

All of the following are a stock except:

Nominal GDP means the value of goods and services is measured in ______ prices.

Assume that a bakery hires more workers and pays them wages and that the workers produce more bread.GDP increases in all of the following cases except when the bread:

National income equals net national product:

The best measure of the economic satisfaction of the members of a society is:

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s)per year.

Okun's Law is the _______ relationship between real GDP and the _________.

When a firm sells a product out of inventory,GDP:

In the national income accounts,net exports equal:

To avoid double counting in the computation of GDP,only the value of ______ goods are included.

The GDP deflator is a:

In principle,the GDP accounts should-but do not-have an imputation for:

An increase in the price of goods bought by firms and the government will show up in:

The largest component of national income is:

The value added on an item produced means:

The labour force equals the:

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

As a percentage of GNP (in 2012),depreciation (also called capital consumption allowances)amounts to approximately ______ percent.

The Science of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

Filters

Economists have estimated that the CPI inflation by approximately percentage point(s)per year.

Okun's Law is the _ relationship between real GDP and the ___.