Question 1

Which of the following are NOT included in the expenditure approach to national income accounting?

Accepted Answer

A)  defense expenditures 
B)  firm expenditures on equipment 
C)  residential expenditures 
D)  household service expenditures 
E)  All of these answers are correct. 
A)  defense expenditures 
B)  firm expenditures on equipment 
C)  residential expenditures 
D)  household service expenditures 
E)  All of these answers are correct.

Question 2

The price level can be derived as ________ and is called the ________.

Accepted Answer

A)  Price level = Nominal GDP ÷ Real GDP; CPI 
B)  Price level = Nominal GDP $\times$Real GDP; CPI 
C)  Price level = Real GDP $\times$ Nominal GDP; GDP deflator 
D)  Price level = Real GDP ÷ Nominal GDP; Paasche deflator 
E)  Price level = Nominal GDP ÷ Real GDP; GDP deflator 
A)  Price level = Nominal GDP ÷ Real GDP; CPI 
B)  Price level = Nominal GDP $\times$Real GDP; CPI 
C)  Price level = Real GDP $\times$ Nominal GDP; GDP deflator 
D)  Price level = Real GDP ÷ Nominal GDP; Paasche deflator 
E)  Price level = Nominal GDP ÷ Real GDP; GDP deflator

Question 3

In 2012, net exports accounted for about ________ of total GDP.

Accepted Answer

A)  -4 percent 
B)  13 percent 
C)  20 percent 
D)  100 percent 
E)  -14 percent 
A)  -4 percent 
B)  13 percent 
C)  20 percent 
D)  100 percent 
E)  -14 percent

Question 4

In the past 60 years or so, labor's share of GDP in the United States ________.

Accepted Answer

A)  is roughly two-thirds 
B)  is exactly 50 percent 
C)  is roughly one-third 
D)  is equal to capital's income share 
E)  has risen sharply 
A)  is roughly two-thirds 
B)  is exactly 50 percent 
C)  is roughly one-third 
D)  is equal to capital's income share 
E)  has risen sharply

Question 5

Using the expenditure approach, government expenditures include:

Accepted Answer

A)  defense and nondefense federal, state, and local government expenditures 
B)  only nondefense federal government expenditures 
C)  federal government expenditures and transfer payments 
D)  only state and local government expenditures 
E)  residential investment and state and local government expenditures 
A)  defense and nondefense federal, state, and local government expenditures 
B)  only nondefense federal government expenditures 
C)  federal government expenditures and transfer payments 
D)  only state and local government expenditures 
E)  residential investment and state and local government expenditures

Question 6

If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP ________ by ________.

Accepted Answer

A)  falls; 3 percent 
B)  rises; 9 percent 
C)  rises; 3 percent 
D)  falls; 9 percent 
E)  None of these answers are correct. 
A)  falls; 3 percent 
B)  rises; 9 percent 
C)  rises; 3 percent 
D)  falls; 9 percent 
E)  None of these answers are correct.

Question 7

Nominal GDP means that the value of all goods and services is measured in ________ prices.

Accepted Answer

A)  average 
B)  last year's 
C)  the base year's 
D)  current 
E)  constant 
A)  average 
B)  last year's 
C)  the base year's 
D)  current 
E)  constant

Question 8

When a state builds a new penitentiary, ________ rise(s), but that does not imply that ________ improve(s).

Accepted Answer

A)  income; welfare 
B)  GDP; taxes 
C)  GDP; transfers 
D)  GDP; welfare 
E)  taxes; costs 
A)  income; welfare 
B)  GDP; taxes 
C)  GDP; transfers 
D)  GDP; welfare 
E)  taxes; costs

Question 9

Using the expenditure approach to national income accounting, when discussing government expenditures, do we include transfer payments? Why or why not?

Accepted Answer

No. The expenditure approach concentrate

Question 10

If the percent change in the price level is ________ than the percent change in ________, ________.

Accepted Answer

A)  smaller; nominal GDP; real GDP shrinks 
B)  greater; nominal GDP; real GDP shrinks 
C)  greater; real GDP; nominal GDP shrinks 
D)  greater; real GDP; nominal GDP always stays the same 
E)  Not enough information is given. 
A)  smaller; nominal GDP; real GDP shrinks 
B)  greater; nominal GDP; real GDP shrinks 
C)  greater; real GDP; nominal GDP shrinks 
D)  greater; real GDP; nominal GDP always stays the same 
E)  Not enough information is given.

Question 11

To get a more accurate view of the size of countries' economies, we first need to convert each country's GDP to the dollar using ________ and then adjust for ________.

Accepted Answer

A)  the interest rate; the exchange rate 
B)  the exchange rate; price level differences 
C)  price level differences; the interest rate 
D)  the exchange rate; fiscal policy 
E)  fiscal policy; the exchange rate 
A)  the interest rate; the exchange rate 
B)  the exchange rate; price level differences 
C)  price level differences; the interest rate 
D)  the exchange rate; fiscal policy 
E)  fiscal policy; the exchange rate

Question 12

If we calculate the real GDP using the initial period's prices, we are using a ________ index. If, instead, we use the final period's prices, we are using a ________ index.

Accepted Answer

A)  Paasche; chain-weighted 
B)  Laspeyres; chain-weighted 
C)  Laspeyres; Paasche 
D)  Paasche; Laspeyres 
E)  chain-weighted; Fisher 
A)  Paasche; chain-weighted 
B)  Laspeyres; chain-weighted 
C)  Laspeyres; Paasche 
D)  Paasche; Laspeyres 
E)  chain-weighted; Fisher

Question 13

The statistic used by economists to measure the value of economic output is:

Accepted Answer

A)  the unemployment rate 
B)  GDP 
C)  the CPI 
D)  the GDP deflator 
E)  the federal funds rate 
A)  the unemployment rate 
B)  GDP 
C)  the CPI 
D)  the GDP deflator 
E)  the federal funds rate

Question 14

The percent change in the nominal GDP is given as:

Accepted Answer

A)  percent change in the price level + percent change in real GDP 
B)  percent change in the price level - percent change in real GDP 
C)  percent change in the price level $\times$ percent change in real GDP 
D)  percent change in the price level ÷ percent change in real GDP 
E)  price level $\times$ percent change in real GDP 
A)  percent change in the price level + percent change in real GDP 
B)  percent change in the price level - percent change in real GDP 
C)  percent change in the price level $\times$ percent change in real GDP 
D)  percent change in the price level ÷ percent change in real GDP 
E)  price level $\times$ percent change in real GDP

Question 15

What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?

Accepted Answer

Real GDP is the value of all goods and s

Question 16

Refer to the following table when answering  .
 In this economy, only two goods are produced: video games and pistachios.

Table 2.3: National Income Accounting
 $$\begin{array} { l | r r } 
\hline & 2017 & 2018 \
\hline \text { Quantity of pistachios } & 1,000 & 1,100 \
\text { Quantity of video games } & 500 & 500 \
\text { Price of pistachios } & \$ 1.00 & \$ 1.50 \
\text { Price of video games } & \$ 15.00 & \$ 14.75 \
\hline
\end{array}$$
-Consider Table 2.3. Using the Laspeyres index, inflation between 2017 and 2018 was about:

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  6 percent 
E)  Not enough information is given. 
A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  6 percent 
E)  Not enough information is given.

Question 17

The National Income and Product Accounts identity states:

Accepted Answer

A)  $\text { Expenditure = Production } + \text { Income }$ 
B)  $\text { Production } = \text { Expenditure } - \text { Income }$ 
C)  $\text { Production = Expenditure + Income }$ 
D)  $\text { Expenditure = Production } - \text { Income }$ 
E)  $\text { Production } = \text { Expenditure } = \text { Income }$ 
A)  $\text { Expenditure = Production } + \text { Income }$ 
B)  $\text { Production } = \text { Expenditure } - \text { Income }$ 
C)  $\text { Production = Expenditure + Income }$ 
D)  $\text { Expenditure = Production } - \text { Income }$ 
E)  $\text { Production } = \text { Expenditure } = \text { Income }$

Question 18

The National Income and Product Accounts allows us to relate ________ to ________ to ________.

Accepted Answer

A)  household income; government income; firm income 
B)  total output; total spending; inflation 
C)  total output; inflation; total income 
D)  household income; household expenditure; total output 
E)  total output; total spending; total income 
A)  household income; government income; firm income 
B)  total output; total spending; inflation 
C)  total output; inflation; total income 
D)  household income; household expenditure; total output 
E)  total output; total spending; total income

Question 19

Which of the following is/are NOT included in the expenditure approach to national income accounting?

Accepted Answer

A)  transfer payments 
B)  taxes 
C)  Social Security 
D)  changes in stock prices 
E)  None of these answers are correct. 
A)  transfer payments 
B)  taxes 
C)  Social Security 
D)  changes in stock prices 
E)  None of these answers are correct.

Question 20

Goods that are produced in a different year than they are sold are called:

Accepted Answer

A)  inventory 
B)  output adjustment 
C)  capital depreciation 
D)  a loss 
E)  net national product 
A)  inventory 
B)  output adjustment 
C)  capital depreciation 
D)  a loss 
E)  net national product

Which of the following are NOT included in the expenditure approach to national income accounting?

The price level can be derived as and is called the .

In 2012, net exports accounted for about ________ of total GDP.

In the past 60 years or so, labor's share of GDP in the United States ________.

Using the expenditure approach, government expenditures include:

If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP by .

Nominal GDP means that the value of all goods and services is measured in ________ prices.

When a state builds a new penitentiary, rise(s), but that does not imply that improve(s).

Using the expenditure approach to national income accounting, when discussing government expenditures, do we include transfer payments? Why or why not?

If the percent change in the price level is than the percent change in , .

To get a more accurate view of the size of countries' economies, we first need to convert each country's GDP to the dollar using and then adjust for .

If we calculate the real GDP using the initial period's prices, we are using a index. If, instead, we use the final period's prices, we are using a index.

The statistic used by economists to measure the value of economic output is:

The percent change in the nominal GDP is given as:

What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?

The National Income and Product Accounts identity states:

The National Income and Product Accounts allows us to relate to to .

Which of the following is/are NOT included in the expenditure approach to national income accounting?

Goods that are produced in a different year than they are sold are called:

Introduction to Macroeconomics

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 2: Measuring the Macroeconomy

Which of the following are NOT included in the expenditure approach to national income accounting?

The price level can be derived as ________ and is called the ________.

In 2012, net exports accounted for about ________ of total GDP.

In the past 60 years or so, labor's share of GDP in the United States ________.

Using the expenditure approach, government expenditures include:

If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP ________ by ________.

Nominal GDP means that the value of all goods and services is measured in ________ prices.

When a state builds a new penitentiary, ________ rise(s), but that does not imply that ________ improve(s).

Using the expenditure approach to national income accounting, when discussing government expenditures, do we include transfer payments? Why or why not?

If the percent change in the price level is ________ than the percent change in ________, ________.

To get a more accurate view of the size of countries' economies, we first need to convert each country's GDP to the dollar using ________ and then adjust for ________.

If we calculate the real GDP using the initial period's prices, we are using a ________ index. If, instead, we use the final period's prices, we are using a ________ index.

The statistic used by economists to measure the value of economic output is:

The percent change in the nominal GDP is given as:

What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?

The National Income and Product Accounts identity states:

The National Income and Product Accounts allows us to relate ________ to ________ to ________.

Which of the following is/are NOT included in the expenditure approach to national income accounting?

Goods that are produced in a different year than they are sold are called:

Introduction to Macroeconomics

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

The price level can be derived as and is called the .

If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP by .

When a state builds a new penitentiary, rise(s), but that does not imply that improve(s).

If the percent change in the price level is than the percent change in , .

To get a more accurate view of the size of countries' economies, we first need to convert each country's GDP to the dollar using and then adjust for .

If we calculate the real GDP using the initial period's prices, we are using a index. If, instead, we use the final period's prices, we are using a index.

The National Income and Product Accounts allows us to relate to to .