Question 1

Which of the following is included in GDP?

Accepted Answer

A)  the purchase of 100 shares of Microsoft stock 
B)  the purchase of a 1965 Ford Mustang 
C)  Social Security payments from the U.S. government to retired people 
D)  the purchase of a ticket to a Lady Gaga concert 
A)  the purchase of 100 shares of Microsoft stock 
B)  the purchase of a 1965 Ford Mustang 
C)  Social Security payments from the U.S. government to retired people 
D)  the purchase of a ticket to a Lady Gaga concert

Question 2

Disposable income in a particular period is:

Accepted Answer

A)  total earned income. 
B)  earned income plus government transfer payments. 
C)  earned income plus government transfer payments less taxes. 
D)  earned income plus government transfer payments less taxes and savings. 
A)  total earned income. 
B)  earned income plus government transfer payments. 
C)  earned income plus government transfer payments less taxes. 
D)  earned income plus government transfer payments less taxes and savings.

Question 3

GDP is the sum of:

Accepted Answer

A)  personal consumption, investment, government purchases of goods and services, exports, and imports. 
B)  personal consumption, investment, government purchases of goods and services, and net exports. 
C)  personal consumption, investment, government purchases of goods and services, and net imports. 
D)  value added, net imports, and government purchases of goods and services. 
A)  personal consumption, investment, government purchases of goods and services, exports, and imports. 
B)  personal consumption, investment, government purchases of goods and services, and net exports. 
C)  personal consumption, investment, government purchases of goods and services, and net imports. 
D)  value added, net imports, and government purchases of goods and services.

Question 4

If nominal GDP of 2012 was higher than nominal GDP of 2011:

Accepted Answer

A)  production in 2012 was higher than production in 2011, while prices remained unchanged. 
B)  production or prices or both were higher in 2012 than in 2011. 
C)  prices in 2012 were higher than prices in 2011, while production remained unchanged. 
D)  production in 2012 went down and prices increased. 
A)  production in 2012 was higher than production in 2011, while prices remained unchanged. 
B)  production or prices or both were higher in 2012 than in 2011. 
C)  prices in 2012 were higher than prices in 2011, while production remained unchanged. 
D)  production in 2012 went down and prices increased.

Question 5

Use the following to answer questions 
Figure: Expanded Circular-Flow Model  
-(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of households is:

Accepted Answer

A)  $1,020. 
B)  $1,000. 
C)  $850. 
D)  $700. 
A)  $1,020. 
B)  $1,000. 
C)  $850. 
D)  $700.

Question 6

Which of the following would accurately characterize the portion of a firm's profit paid to the owner of one share of its stock?

Accepted Answer

A)  interest 
B)  dividend 
C)  stock 
D)  bond 
A)  interest 
B)  dividend 
C)  stock 
D)  bond

Question 7

In the circular-flow diagram, the places where goods and services are bought and sold are the:

Accepted Answer

A)  product markets. 
B)  factor markets. 
C)  households. 
D)  firms. 
A)  product markets. 
B)  factor markets. 
C)  households. 
D)  firms.

Question 8

The national income and product accounts keep track of:

Accepted Answer

A)  consumer spending. 
B)  interest rates. 
C)  rates of inflation. 
D)  exchange rates. 
A)  consumer spending. 
B)  interest rates. 
C)  rates of inflation. 
D)  exchange rates.

Question 9

Use the following to answer questions 
Figure: Circular-Flow Model  
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. How does the government finance its purchases of goods and services?

Accepted Answer

A)  by printing money 
B)  by taxes 
C)  by borrowing 
D)  by taxes and borrowing 
A)  by printing money 
B)  by taxes 
C)  by borrowing 
D)  by taxes and borrowing

Question 10

Assume that the real GDP of the United States is approximately $12 trillion and the population of the United States is approximately 300 million. What is per capita real GDP?

Accepted Answer

A)  $4,000 
B)  $36,000 
C)  $40,000 
D)  Real per capita GDP can't be determined without more information. 
A)  $4,000 
B)  $36,000 
C)  $40,000 
D)  Real per capita GDP can't be determined without more information.

Question 11

In the United States:

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 and GDP are about equal. 
A)  GNP is about twice GDP. 
B)  GDP is about twice GNP. 
C)  GDP exceeds GNP by depreciation plus indirect business taxes. 
D)  GNP and GDP are about equal.

Question 12

Consider an economy that produces only DVDs and DVD players. Last year, 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Real GDP this year using last year as the base year is:

Accepted Answer

A)  $100. 
B)  $700. 
C)  $1,300. 
D)  $300 
A)  $100. 
B)  $700. 
C)  $1,300. 
D)  $300

Question 13

In the United States, government spending accounts for approximately_____ of GDP.

Accepted Answer

A)  5% 
B)  10% 
C)  20% 
D)  30% 
A)  5% 
B)  10% 
C)  20% 
D)  30%

Question 14

If both aggregate output and the aggregate price level increase:

Accepted Answer

A)  real GDP will increase faster than nominal GDP. 
B)  nominal GDP will increase faster than real GDP. 
C)  it makes no difference to real or nominal GDP. 
D)  real GDP and nominal GDP will increase faster than the price level. 
A)  real GDP will increase faster than nominal GDP. 
B)  nominal GDP will increase faster than real GDP. 
C)  it makes no difference to real or nominal GDP. 
D)  real GDP and nominal GDP will increase faster than the price level.

Question 15

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

Accepted Answer

A)  5%. 
B)  10%. 
C)  11.25%. 
D)  20%. 
A)  5%. 
B)  10%. 
C)  11.25%. 
D)  20%.

Question 16

An example of investment spending is the purchase of a:

Accepted Answer

A)  bond by a banker. 
B)  loaf of bread by a restaurant. 
C)  new tractor by a farmer. 
D)  ticket to a football game by a student. 
A)  bond by a banker. 
B)  loaf of bread by a restaurant. 
C)  new tractor by a farmer. 
D)  ticket to a football game by a student.

Question 17

Purchases of foreign-produced goods and services are:

Accepted Answer

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

Question 18

Which of the following would NOT be a part of GDP?

Accepted Answer

A)  used car sales 
B)  new residential construction 
C)  a new truck purchased by a building contractor 
D)  cable TV service purchased for a home 
A)  used car sales 
B)  new residential construction 
C)  a new truck purchased by a building contractor 
D)  cable TV service purchased for a home

Question 19

Use the following to answer questions 
Scenario: Real GDP
Suppose that in year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.
-(Scenario: Real GDP) Look at the scenario Real GDP. Using year 1 as the base year, real GDP in year 2 is:

Accepted Answer

A)  $900. 
B)  $970. 
C)  $1,000. 
D)  $1,077.50. 
A)  $900. 
B)  $970. 
C)  $1,000. 
D)  $1,077.50.

Question 20

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2013 was:

Accepted Answer

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

Exam 21: Gdp and the Consumer Price Index

Which of the following is included in GDP?

Disposable income in a particular period is:

GDP is the sum of:

If nominal GDP of 2012 was higher than nominal GDP of 2011:

Use the following to answer questions Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of households is:

Which of the following would accurately characterize the portion of a firm's profit paid to the owner of one share of its stock?

In the circular-flow diagram, the places where goods and services are bought and sold are the:

The national income and product accounts keep track of:

Use the following to answer questions Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. How does the government finance its purchases of goods and services?

Assume that the real GDP of the United States is approximately $12 trillion and the population of the United States is approximately 300 million. What is per capita real GDP?

In the United States:

Consider an economy that produces only DVDs and DVD players. Last year, 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Real GDP this year using last year as the base year is:

In the United States, government spending accounts for approximately_____ of GDP.

If both aggregate output and the aggregate price level increase:

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

An example of investment spending is the purchase of a:

Purchases of foreign-produced goods and services are:

Which of the following would NOT be a part of GDP?

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2013 was:

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

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