Question 1

Historical analysis of real interest rates in the United States shows that

Accepted Answer

A) real interest rates were unusually low in both the 1970s and 1980s. 
B) real interest rates were unusually high in both the 1970s and 1980s. 
C) real interest rates were unusually low in the 1970s and unusually high in the 1980s. 
D) real interest rates were unusually low in the 1980s,spurring the economic growth that occurred during the Reagan administration. 
A) real interest rates were unusually low in both the 1970s and 1980s. 
B) real interest rates were unusually high in both the 1970s and 1980s. 
C) real interest rates were unusually low in the 1970s and unusually high in the 1980s. 
D) real interest rates were unusually low in the 1980s,spurring the economic growth that occurred during the Reagan administration.

Question 2

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Accepted Answer

A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater 
A) less; less 
B) less; greater 
C) greater; less 
D) greater; greater

Question 3

Larry's Lathe-makers Limited produces lathes,which are purchased by furniture manufacturers all over the world.The standard lathe depreciates over a twenty-five year period.In the national income accounts,the lathes are classified as

Accepted Answer

A) inventory. 
B) raw materials. 
C) capital goods. 
D) intermediate goods. 
A) inventory. 
B) raw materials. 
C) capital goods. 
D) intermediate goods.

Question 4

The equation total production = total income = total expenditure is called

Accepted Answer

A) the goods-market equilibrium condition. 
B) the total identity. 
C) the fundamental identity of national income accounting. 
D) Say's Law. 
A) the goods-market equilibrium condition. 
B) the total identity. 
C) the fundamental identity of national income accounting. 
D) Say's Law.

Question 5

The income-expenditure identity says that

Accepted Answer

A) Y = C + S + T. 
B) Y = C + I + G. 
C) Y = C + I + G + NX. 
D) Y = C + I + G + NX + CA. 
A) Y = C + S + T. 
B) Y = C + I + G. 
C) Y = C + I + G + NX. 
D) Y = C + I + G + NX + CA.

Question 6

If the nominal interest rate on a one-year loan was 7%,the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%,then the expected real interest rate equals

Accepted Answer

A) 6)5% 
B) 4)0% 
C) 3)75%. 
D) 3)5% 
A) 6)5% 
B) 4)0% 
C) 3)75%. 
D) 3)5%

Question 7

A disadvantage of chain-weighting is that

Accepted Answer

A) past inflation rates change whenever the base year changes. 
B) past growth rates of real GDP change whenever the base year changes. 
C) it causes output growth to slow. 
D) the components of real GDP don't sum to real GDP. 
A) past inflation rates change whenever the base year changes. 
B) past growth rates of real GDP change whenever the base year changes. 
C) it causes output growth to slow. 
D) the components of real GDP don't sum to real GDP.

Question 8

The U.S.inflation rate ________ in the 1960s and 1970s,________ in the 1980s,and ________ in the 1990s and 2000s.

Accepted Answer

A) was steady; rose sharply; fell 
B) was steady; rose sharply; remained high 
C) rose; fell sharply; remained low 
D) rose; fell sharply; rose again 
A) was steady; rose sharply; fell 
B) was steady; rose sharply; remained high 
C) rose; fell sharply; remained low 
D) rose; fell sharply; rose again

Question 9

Capital goods are

Accepted Answer

A) not counted in GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods. 
A) not counted in GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods.

Question 10

Pete the Pizza Man produced $87,000 worth of pizzas in the past year.He paid $39,000 to employees,paid $11,000 for vegetables and other ingredients,and paid $5,000 in taxes.He began the year with ingredient inventories valued at $1,000,and ended the year with inventories valued at $2,000.What was Pete's (and his employees')total contribution to GDP this year?

Accepted Answer

$87,000 - $11,000 pa

Question 11

The uses-of-saving identity says that an economy's private saving is used for

Accepted Answer

A) investment,interest expenses,and the government budget deficit. 
B) investment,the government budget deficit,and the current account. 
C) investment,interest expenses,the government budget deficit,and the current account. 
D) investment,interest expenses,the government budget deficit,transfer payments,and the current account. 
A) investment,interest expenses,and the government budget deficit. 
B) investment,the government budget deficit,and the current account. 
C) investment,interest expenses,the government budget deficit,and the current account. 
D) investment,interest expenses,the government budget deficit,transfer payments,and the current account.

Question 12

Currently,the U.S.national income and product accounts (NIPA)use what type of price index to calculate real GDP?

Accepted Answer

A) Fixed-weight 
B) Variable-weight 
C) Chain-weight 
D) Heavy-weight 
A) Fixed-weight 
B) Variable-weight 
C) Chain-weight 
D) Heavy-weight

Question 13

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

Accepted Answer

A) $285. 
B) $3850. 
C) $2397. 
D) $2112. 
A) $285. 
B) $3850. 
C) $2397. 
D) $2112.

Question 14

If the price index was 100 in 2000 and 120 in 2010,and nominal GDP was $360 billion in 2000 and $480 billion in 2010,then the value of 2010 GDP in terms of 2000 dollars would be

Accepted Answer

A) $300 billion. 
B) $384 billion. 
C) $400 billion. 
D) $424 billion. 
A) $300 billion. 
B) $384 billion. 
C) $400 billion. 
D) $424 billion.

Question 15

Carl's Computer Center sells computers to business firms.Businesses then use the computers to produce other goods and services.Over the past year,sales representatives were paid $3.5 million,$0.5 million went for rent on the building,$0.5 million went for taxes,$0.5 million was profit for Carl,and $10 million was paid for computers at the wholesale level.What was the firm's total contribution to GDP?

Accepted Answer

$5 million.Note that the $10 m

Question 16

You are given information on the consumer price index (CPI),where the values given are those for December 31 of each year.
 
In which year was the inflation rate the highest?

Accepted Answer

A) 2006 
B) 2007 
C) 2008 
D) 2009 
A) 2006 
B) 2007 
C) 2008 
D) 2009

Question 17

Consumer spending is spending by ________ households on final goods and services produced ________.

Accepted Answer

A) domestic; domestically and abroad 
B) domestic; domestically 
C) domestic and foreign; domestically and abroad 
D) domestic and foreign; domestically 
A) domestic; domestically and abroad 
B) domestic; domestically 
C) domestic and foreign; domestically and abroad 
D) domestic and foreign; domestically

Question 18

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

Accepted Answer

A) Government payments for goods produced by foreign firms 
B) Government payments for goods produced by firms owned by state or local governments 
C) Government payments for welfare 
D) All government payments are included in GDP. 
A) Government payments for goods produced by foreign firms 
B) Government payments for goods produced by firms owned by state or local governments 
C) Government payments for welfare 
D) All government payments are included in GDP.

Question 19

Government statisticians adjust GDP figures to include estimates of

Accepted Answer

A) the value of homemaking (work done within the home). 
B) the underground economy. 
C) child-rearing services provided by stay-at-home parents. 
D) the costs of pollution to society. 
A) the value of homemaking (work done within the home). 
B) the underground economy. 
C) child-rearing services provided by stay-at-home parents. 
D) the costs of pollution to society.

Question 20

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon.
 
Between Year 1 and Year 2,the GDP deflator (based on Year 1 as a base year)rose

Accepted Answer

A) 60.00%. 
B) 81.25%. 
C) 83.33%. 
D) 123.00%. 
A) 60.00%. 
B) 81.25%. 
C) 83.33%. 
D) 123.00%.

Historical analysis of real interest rates in the United States shows that

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.

Larry's Lathe-makers Limited produces lathes,which are purchased by furniture manufacturers all over the world.The standard lathe depreciates over a twenty-five year period.In the national income accounts,the lathes are classified as

The equation total production = total income = total expenditure is called

The income-expenditure identity says that

If the nominal interest rate on a one-year loan was 7%,the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%,then the expected real interest rate equals

A disadvantage of chain-weighting is that

The U.S.inflation rate in the 1960s and 1970s, in the 1980s,and in the 1990s and 2000s.

Capital goods are

The uses-of-saving identity says that an economy's private saving is used for

Currently,the U.S.national income and product accounts (NIPA)use what type of price index to calculate real GDP?

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

If the price index was 100 in 2000 and 120 in 2010,and nominal GDP was $360 billion in 2000 and $480 billion in 2010,then the value of 2010 GDP in terms of 2000 dollars would be

You are given information on the consumer price index (CPI),where the values given are those for December 31 of each year. In which year was the inflation rate the highest?

Consumer spending is spending by households on final goods and services produced .

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

Government statisticians adjust GDP figures to include estimates of

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2,the GDP deflator (based on Year 1 as a base year)rose

Introduction to Macroeconomics

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 2: The Measurement and Structure of the National Economy

Historical analysis of real interest rates in the United States shows that

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009.

Larry's Lathe-makers Limited produces lathes,which are purchased by furniture manufacturers all over the world.The standard lathe depreciates over a twenty-five year period.In the national income accounts,the lathes are classified as

The equation total production = total income = total expenditure is called

The income-expenditure identity says that

If the nominal interest rate on a one-year loan was 7%,the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%,then the expected real interest rate equals

A disadvantage of chain-weighting is that

The U.S.inflation rate ________ in the 1960s and 1970s,________ in the 1980s,and ________ in the 1990s and 2000s.

Capital goods are

The uses-of-saving identity says that an economy's private saving is used for

Currently,the U.S.national income and product accounts (NIPA)use what type of price index to calculate real GDP?

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

If the price index was 100 in 2000 and 120 in 2010,and nominal GDP was $360 billion in 2000 and $480 billion in 2010,then the value of 2010 GDP in terms of 2000 dollars would be

You are given information on the consumer price index (CPI),where the values given are those for December 31 of each year. In which year was the inflation rate the highest?

Consumer spending is spending by ________ households on final goods and services produced ________.

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

Government statisticians adjust GDP figures to include estimates of

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2,the GDP deflator (based on Year 1 as a base year)rose

Introduction to Macroeconomics

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

In 2008,expected inflation exceeded inflation.In 2009,inflation exceeded expected inflation.Therefore the real interest rate was than the expected real interest rate in 2008 and the real interest rate was than the expected real interest rate in 2009.

The U.S.inflation rate in the 1960s and 1970s, in the 1980s,and in the 1990s and 2000s.

Consumer spending is spending by households on final goods and services produced .