Question 1

If the price index in year 1 is 146 and in year 2 is 163,the rate of inflation between year 1 and year 2 is:

Accepted Answer

A)  8.2%. 
B)  10.43%. 
C)  11.64%. 
D)  17.0%. 
A)  8.2%. 
B)  10.43%. 
C)  11.64%. 
D)  17.0%.

Question 2

Chain linking is a method used to measure the change in real GDP.

Accepted Answer

A) True 
 B)False

Question 3

Inventory is counted as investment because it:

Accepted Answer

A)  is used for future production. 
B)  is a source of future sales. 
C)  has no opportunity cost. 
D)  is tax deductible. 
A)  is used for future production. 
B)  is a source of future sales. 
C)  has no opportunity cost. 
D)  is tax deductible.

Question 4

In the circular-flow model,households:

Accepted Answer

A)  receive transfer payments from the government. 
B)  buy resources in the factor markets. 
C)  sell products in the market for goods and services. 
D)  issue stocks and bonds to raise capital. 
A)  receive transfer payments from the government. 
B)  buy resources in the factor markets. 
C)  sell products in the market for goods and services. 
D)  issue stocks and bonds to raise capital.

Question 5

Households demand goods and services in the product markets.

Accepted Answer

A) True 
 B)False

Question 6

The total income of households after taxes and government transfers is called:

Accepted Answer

A)  disposable income. 
B)  private savings. 
C)  aggregate spending. 
D)  investment. 
A)  disposable income. 
B)  private savings. 
C)  aggregate spending. 
D)  investment.

Question 7

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: 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,holding everything else constant,which outcome is likely to occur?

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 8

Final goods and services are sold to the final or end user.

Accepted Answer

A) True 
 B)False

Question 9

In Ireland:

Accepted Answer

A)  GNP is about twice GDP. 
B)  GDP is about twice GNP. 
C)  GDP exceeds GNP by depreciation plus indirect business taxes. 
D)  GNP is about 80% of GDP. 
A)  GNP is about twice GDP. 
B)  GDP is about twice GNP. 
C)  GDP exceeds GNP by depreciation plus indirect business taxes. 
D)  GNP is about 80% of GDP.

Question 10

The GDP deflator is used to calculate the official estimate of inflation that is used to index employment insurance benefits.

Accepted Answer

A) True 
 B)False

Question 11

Use the following to answer questions:  
-(Table: Per Capita GDP)Use Table: Per Capita GDP.The growth rate of nominal GDP from 2011 to 2014 was _____%.

Accepted Answer

A)  37.5 
B)  60 
C)  62.5 
D)  166.7 
A)  37.5 
B)  60 
C)  62.5 
D)  166.7

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A country's exports minus its imports during a period are:

Accepted Answer

A)  net exports. 
B)  gross exports. 
C)  net imports. 
D)  gross imports. 
A)  net exports. 
B)  gross exports. 
C)  net imports. 
D)  gross imports.

Question 14

Domestically produced goods and services sold to people in other countries are known as:

Accepted Answer

A)  imports. 
B)  investments. 
C)  exports. 
D)  transfer payments. 
A)  imports. 
B)  investments. 
C)  exports. 
D)  transfer payments.

Question 15

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: 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 exports,holding everything else constant,which outcome is likely to occur?

Accepted Answer

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

Question 16

For measuring GDP as spending on domestically produced final goods and services,spending on inputs like steel for manufacturing a car is counted in GDP,but spending on a new factory in which the cars are produced is NOT counted in GDP.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions:  
-(Table: Lemonade and Cookies)Use Table: Lemonade and Cookies.Assume that an economy produces only lemonade and cookies.If 2013 is the base year,real GDP in 2014 was:

Accepted Answer

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

Question 18

Use the following to answer questions:  
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.What is disposable income?

Accepted Answer

A)  $0 
B)  $100 
C)  $400 
D)  $500 
A)  $0 
B)  $100 
C)  $400 
D)  $500

Question 19

A transfer payment is a payment for:

Accepted Answer

A)  a military transfer to a war zone. 
B)  which no services were rendered by the government. 
C)  transfer of a debt to a different person. 
D)  being transferred to a different city by your employer. 
A)  a military transfer to a war zone. 
B)  which no services were rendered by the government. 
C)  transfer of a debt to a different person. 
D)  being transferred to a different city by your employer.

Question 20

Use the following to answer questions:  
-If real GDP falls while nominal GDP rises,then prices on average have:

Accepted Answer

A)  risen. 
B)  fallen. 
C)  stayed the same. 
D)  Real GDP cannot rise when nominal GDP falls. 
A)  risen. 
B)  fallen. 
C)  stayed the same. 
D)  Real GDP cannot rise when nominal GDP falls.

If the price index in year 1 is 146 and in year 2 is 163,the rate of inflation between year 1 and year 2 is:

Chain linking is a method used to measure the change in real GDP.

Inventory is counted as investment because it:

In the circular-flow model,households:

Households demand goods and services in the product markets.

The total income of households after taxes and government transfers is called:

Final goods and services are sold to the final or end user.

In Ireland:

The GDP deflator is used to calculate the official estimate of inflation that is used to index employment insurance benefits.

Use the following to answer questions: -(Table: Per Capita GDP)Use Table: Per Capita GDP.The growth rate of nominal GDP from 2011 to 2014 was _____%.

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

A country's exports minus its imports during a period are:

Domestically produced goods and services sold to people in other countries are known as:

For measuring GDP as spending on domestically produced final goods and services,spending on inputs like steel for manufacturing a car is counted in GDP,but spending on a new factory in which the cars are produced is NOT counted in GDP.

Use the following to answer questions: -(Table: Lemonade and Cookies)Use Table: Lemonade and Cookies.Assume that an economy produces only lemonade and cookies.If 2013 is the base year,real GDP in 2014 was:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.What is disposable income?

A transfer payment is a payment for:

Use the following to answer questions: -If real GDP falls while nominal GDP rises,then prices on average have:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Exam 7: Gdp and the Cpi: Tracking the Macroeconomy

If the price index in year 1 is 146 and in year 2 is 163,the rate of inflation between year 1 and year 2 is:

Chain linking is a method used to measure the change in real GDP.

Inventory is counted as investment because it:

In the circular-flow model,households:

Households demand goods and services in the product markets.

The total income of households after taxes and government transfers is called:

Final goods and services are sold to the final or end user.

In Ireland:

The GDP deflator is used to calculate the official estimate of inflation that is used to index employment insurance benefits.

Use the following to answer questions: -(Table: Per Capita GDP)Use Table: Per Capita GDP.The growth rate of nominal GDP from 2011 to 2014 was _____%.

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

A country's exports minus its imports during a period are:

Domestically produced goods and services sold to people in other countries are known as:

For measuring GDP as spending on domestically produced final goods and services,spending on inputs like steel for manufacturing a car is counted in GDP,but spending on a new factory in which the cars are produced is NOT counted in GDP.

Use the following to answer questions: -(Table: Lemonade and Cookies)Use Table: Lemonade and Cookies.Assume that an economy produces only lemonade and cookies.If 2013 is the base year,real GDP in 2014 was:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.What is disposable income?

A transfer payment is a payment for:

Use the following to answer questions: -If real GDP falls while nominal GDP rises,then prices on average have:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters