Question 1

Gross domestic product is the economy's total production of _____ for a given period.

Accepted Answer

A)  goods and services 
B)  final goods and services 
C)  intermediate goods and services 
D)  consumer goods and services 
A)  goods and services 
B)  final goods and services 
C)  intermediate goods and services 
D)  consumer goods and services

Question 2

If we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's:

Accepted Answer

A)  disposable income. 
B)  gross domestic product. 
C)  trade deficit. 
D)  budget deficit. 
A)  disposable income. 
B)  gross domestic product. 
C)  trade deficit. 
D)  budget deficit.

Question 3

The equation that breaks GDP down by the four sources of aggregate spending is:

Accepted Answer

A)  GDP = C + I + G + X + IM. 
B)  GDP = C + I + G - X - IM. 
C)  GDP = C - I - G - X + IM. 
D)  GDP = C + I + G + X - IM. 
A)  GDP = C + I + G + X + IM. 
B)  GDP = C + I + G - X - IM. 
C)  GDP = C - I - G - X + IM. 
D)  GDP = C + I + G + X - IM.

Question 4

Dividing real GDP by the population:

Accepted Answer

A)  results in consumption per capita. 
B)  results in nominal GDP per person. 
C)  gives real GDP per capita. 
D)  is a measure of happiness. 
A)  results in consumption per capita. 
B)  results in nominal GDP per person. 
C)  gives real GDP per capita. 
D)  is a measure of happiness.

Question 5

GDP may be calculated as the sum of:

Accepted Answer

A)  consumer spending, investment spending, government purchases of goods and services, and exports minus imports. 
B)  consumer spending, investment spending, government transfer payments, and exports minus imports. 
C)  consumer spending, investment spending, government purchases of goods and services, and exports. 
D)  exports and imports only. 
A)  consumer spending, investment spending, government purchases of goods and services, and exports minus imports. 
B)  consumer spending, investment spending, government transfer payments, and exports minus imports. 
C)  consumer spending, investment spending, government purchases of goods and services, and exports. 
D)  exports and imports only.

Question 6

Use the following to answer questions  
-(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. In 2011, nominal GDP was ____ and real GDP was _____.

Accepted Answer

A)  $450; $400 
B)  $525; $450 
C)  $525; $400 
D)  $450; $575 
A)  $450; $400 
B)  $525; $450 
C)  $525; $400 
D)  $450; $575

Question 7

The largest component of U.S. GDP is value added in:

Accepted Answer

A)  household production. 
B)  business production. 
C)  government production. 
D)  production of goods sold overseas. 
A)  household production. 
B)  business production. 
C)  government production. 
D)  production of goods sold overseas.

Question 8

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 9

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 10

Which of the following is the best equation for GDP?

Accepted Answer

A)  GDP = C+ I + G - X + IM 
B)  GDP = C + I + G + X - IM 
C)  GDP = C + I + G + taxes - value added 
D)  GDP = C + I + G + taxes + X + IM 
A)  GDP = C+ I + G - X + IM 
B)  GDP = C + I + G + X - IM 
C)  GDP = C + I + G + taxes - value added 
D)  GDP = C + I + G + taxes + X + IM

Question 11

Government borrowing is:

Accepted Answer

A)  the amount of funds raised by government in financial markets. 
B)  government spending on goods and services. 
C)  government tax revenues. 
D)  the amount of funds raised by government in the financial markets, government spending on goods and services, and government tax revenues. 
A)  the amount of funds raised by government in financial markets. 
B)  government spending on goods and services. 
C)  government tax revenues. 
D)  the amount of funds raised by government in the financial markets, government spending on goods and services, and government tax revenues.

Question 12

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 13

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 14

In the factor markets:

Accepted Answer

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

Question 15

Use the following to answer questions 
Figure: Expanded Circular-Flow Model  
-(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. What is the value of disposable income?

Accepted Answer

A)  $1,020 
B)  $1,000 
C)  $870 
D)  $850 
A)  $1,020 
B)  $1,000 
C)  $870 
D)  $850

Question 16

Intermediate goods are not counted in GDP because:

Accepted Answer

A)  to do so would result in double counting. 
B)  these goods are not produced for the market. 
C)  these goods are produced in the underground economy. 
D)  these goods involve financial transactions. 
A)  to do so would result in double counting. 
B)  these goods are not produced for the market. 
C)  these goods are produced in the underground economy. 
D)  these goods involve financial transactions.

Question 17

The total value of all final goods and services produced in a given year, calculated with the prices current in the year in which the output is produced is:

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  net exports. 
D)  consumption spending. 
A)  real GDP. 
B)  nominal GDP. 
C)  net exports. 
D)  consumption spending.

Question 18

If during 2011, the Republic of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2011 in Sildavia were:

Accepted Answer

A)  $36 billion. 
B)  $38 billion. 
C)  $51 billion. 
D)  $64 billion. 
A)  $36 billion. 
B)  $38 billion. 
C)  $51 billion. 
D)  $64 billion.

Question 19

An increase in the value of GDP over time:

Accepted Answer

A)  is always due to an increase in prices. 
B)  is always due to an increase in the production of goods and services. 
C)  may be due to an increase in prices, in the production of goods and services, or both. 
D)  may be due to a decrease in prices, in the production of goods and services, or both. 
A)  is always due to an increase in prices. 
B)  is always due to an increase in the production of goods and services. 
C)  may be due to an increase in prices, in the production of goods and services, or both. 
D)  may be due to a decrease in prices, in the production of goods and services, or both.

Question 20

Don has built an addition to his house. This transaction will be:

Accepted Answer

A)  not included in GDP because it is not produced for the marketplace. 
B)  included in GDP because Don is a professional builder. 
C)  not included in GDP because it is an intermediate good. 
D)  included in GDP because building is Don's hobby. 
A)  not included in GDP because it is not produced for the marketplace. 
B)  included in GDP because Don is a professional builder. 
C)  not included in GDP because it is an intermediate good. 
D)  included in GDP because building is Don's hobby.

Exam 21: Gdp and the Consumer Price Index

Gross domestic product is the economy's total production of _____ for a given period.

If we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's:

The equation that breaks GDP down by the four sources of aggregate spending is:

Dividing real GDP by the population:

GDP may be calculated as the sum of:

Use the following to answer questions -(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. In 2011, nominal GDP was ____ and real GDP was _____.

The largest component of U.S. GDP is value added in:

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

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

Which of the following is the best equation for GDP?

Government borrowing is:

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

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

In the factor markets:

Use the following to answer questions Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. What is the value of disposable income?

Intermediate goods are not counted in GDP because:

The total value of all final goods and services produced in a given year, calculated with the prices current in the year in which the output is produced is:

If during 2011, the Republic of Sildavia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2011 in Sildavia were:

An increase in the value of GDP over time:

Don has built an addition to his house. This transaction will be:

First Principles

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Consumer Preferences and Consumer Choice

Indifference Curve Analysis of Labor Supply

Filters

Use the following to answer questions -(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. In 2011, nominal GDP was and real GDP was _.