Question 1

Nominal GDP may be used to compare:

Accepted Answer

A)  the dollar amount of final goods produced in different years. 
B)  the price of final goods times the number of goods produced in one year. 
C)  output if prices are increasing. 
D)  living standards among different countries. 
A)  the dollar amount of final goods produced in different years. 
B)  the price of final goods times the number of goods produced in one year. 
C)  output if prices are increasing. 
D)  living standards among different countries.

Question 2

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 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 3

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 imports, which of the following is likely to happen?

Accepted Answer

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

Question 4

The money spent on domestically produced final goods and services:

Accepted Answer

A)  is equal to GDP. 
B)  is equal to exports minus imports. 
C)  is subtracted in the circular-flow model. 
D)  is equal to GDP, is equal to exports minus imports, and is subtracted in the circular-flow model. 
A)  is equal to GDP. 
B)  is equal to exports minus imports. 
C)  is subtracted in the circular-flow model. 
D)  is equal to GDP, is equal to exports minus imports, and is subtracted in the circular-flow model.

Question 5

Real GDP is:

Accepted Answer

A)  the value of the production of all final goods and services measured in current prices. 
B)  the value of the production of all final goods and services adjusted for price changes. 
C)  the projected future value of GDP. 
D)  calculated by adding up only the real number of all items sold in the United States regardless of their prices. 
A)  the value of the production of all final goods and services measured in current prices. 
B)  the value of the production of all final goods and services adjusted for price changes. 
C)  the projected future value of GDP. 
D)  calculated by adding up only the real number of all items sold in the United States regardless of their prices.

Question 6

GDP is the:

Accepted Answer

A)  total market value of all final goods and services produced in an economy in one year. 
B)  total accumulated wealth of an economy. 
C)  volume of all dollar transactions made in an economy in one year. 
D)  dollar amount of all sales made in the economy in one year. 
A)  total market value of all final goods and services produced in an economy in one year. 
B)  total accumulated wealth of an economy. 
C)  volume of all dollar transactions made in an economy in one year. 
D)  dollar amount of all sales made in the economy in one year.

Question 7

Of the following items, which would NOT be included in GDP?

Accepted Answer

A)  the dollar value of a repair job done by your cousin on her own car 
B)  the dollar value of a lawyer's service 
C)  new car sales by a local dealer 
D)  production of new cars that were not sold in the current year 
A)  the dollar value of a repair job done by your cousin on her own car 
B)  the dollar value of a lawyer's service 
C)  new car sales by a local dealer 
D)  production of new cars that were not sold in the current year

Question 8

Use the following to answer questions 
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

Accepted Answer

A)  $100 
B)  $400 
C)  $500 
D)  $600 
A)  $100 
B)  $400 
C)  $500 
D)  $600

Question 9

Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Accepted Answer

A)  $3.5 million. 
B)  $16.5 million. 
C)  $13 million. 
D)  $15.5 million. 
A)  $3.5 million. 
B)  $16.5 million. 
C)  $13 million. 
D)  $15.5 million.

Question 10

Which of the following would NOT be included in this year's GDP?

Accepted Answer

A)  the production of a television show 
B)  the purchase of a new hybrid truck 
C)  the hiring of a new schoolteacher 
D)  your purchase of your neighbor's house, which was built in 1994 
A)  the production of a television show 
B)  the purchase of a new hybrid truck 
C)  the hiring of a new schoolteacher 
D)  your purchase of your neighbor's house, which was built in 1994

Question 11

Use the following to answer questions 
Figure: Expanded Circular-Flow Model  
-(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. How does the government finance its spending?

Accepted Answer

A)  taxes of $150 plus borrowing of $70 
B)  foreign borrowing and sales of stock of $110 
C)  investment spending of $120 
D)  net exports of $80 
A)  taxes of $150 plus borrowing of $70 
B)  foreign borrowing and sales of stock of $110 
C)  investment spending of $120 
D)  net exports of $80

Question 12

The indirect ownership of physical capital refers to households owning:

Accepted Answer

A)  cash. 
B)  stock. 
C)  savings accounts. 
D)  their house. 
A)  cash. 
B)  stock. 
C)  savings accounts. 
D)  their house.

Question 13

Suppose a consumer buys a Perfect Pizza frozen cheese pizza at the grocery store for $10. Perfect Pizza purchased the dough and tomato sauce from a food processing company for $2 and bought the cheese for $1. It sold the pizza to the store for $5. How much has GDP increased?

Accepted Answer

A)  $2 
B)  $5 
C)  $10 
D)  $18 
A)  $2 
B)  $5 
C)  $10 
D)  $18

Question 14

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. The growth rate of nominal GDP from 2013 to 2014 was:

Accepted Answer

A)  5%. 
B)  10%. 
C)  11.25%. 
D)  45%. 
A)  5%. 
B)  10%. 
C)  11.25%. 
D)  45%.

Question 15

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 16

In the United States, consumer spending accounts for approximately _____ of GDP.

Accepted Answer

A)  50% 
B)  60% 
C)  70% 
D)  80% 
A)  50% 
B)  60% 
C)  70% 
D)  80%

Question 17

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 18

A country's living standard is best measured by:

Accepted Answer

A)  per capita nominal GDP. 
B)  real GDP. 
C)  nominal GDP. 
D)  per capita real GDP. 
A)  per capita nominal GDP. 
B)  real GDP. 
C)  nominal GDP. 
D)  per capita real GDP.

Question 19

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

Accepted Answer

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

Question 20

Which of the following is the best definition of GDP?

Accepted Answer

A)  the total value of all final goods and services produced in the economy during a given year 
B)  the total value of all goods and services produced in the economy during a given year 
C)  the total value of all primary, intermediate, and final goods and services produced in the economy during a given year 
D)  the total value of all goods and services produced and sold in the economy during a given year 
A)  the total value of all final goods and services produced in the economy during a given year 
B)  the total value of all goods and services produced in the economy during a given year 
C)  the total value of all primary, intermediate, and final goods and services produced in the economy during a given year 
D)  the total value of all goods and services produced and sold in the economy during a given year

Exam 21: Gdp and the Consumer Price Index

Nominal GDP may be used to compare:

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2014 was:

The money spent on domestically produced final goods and services:

Real GDP is:

GDP is the:

Of the following items, which would NOT be included in GDP?

Use the following to answer questions Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Which of the following would NOT be included in this year's GDP?

Use the following to answer questions Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. How does the government finance its spending?

The indirect ownership of physical capital refers to households owning:

Suppose a consumer buys a Perfect Pizza frozen cheese pizza at the grocery store for $10. Perfect Pizza purchased the dough and tomato sauce from a food processing company for $2 and bought the cheese for $1. It sold the pizza to the store for $5. How much has GDP increased?

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. The growth rate of nominal GDP from 2013 to 2014 was:

In the United States, consumer spending accounts for approximately _____ of GDP.

Nominal GDP is:

A country's living standard is best measured by:

Which of the following is the best definition of GDP?

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