Question 1

The difference between economic profits and normal profits is that:

Accepted Answer

A)  normal profits are earnings based on the normal competitive return to one's own labor; economic profits are the above-normal returns associated with prices that exceed competitive prices 
B)  economic profits are earnings based on the normal competitive return to one's own labor; normal profits are the above-normal returns associated with prices that exceed competitive prices 
C)  normal profits are earnings based on the normal competitive return to one's own labor; economic profits are the above-normal returns associated with prices that exceed monopolistic prices 
D)  economic profits are earnings based on the noncompetitive return to one's own labor; normal profits are the above-normal returns associated with prices that exceed competitive prices 
E)  None of these answers are correct. 
A)  normal profits are earnings based on the normal competitive return to one's own labor; economic profits are the above-normal returns associated with prices that exceed competitive prices 
B)  economic profits are earnings based on the normal competitive return to one's own labor; normal profits are the above-normal returns associated with prices that exceed competitive prices 
C)  normal profits are earnings based on the normal competitive return to one's own labor; economic profits are the above-normal returns associated with prices that exceed monopolistic prices 
D)  economic profits are earnings based on the noncompetitive return to one's own labor; normal profits are the above-normal returns associated with prices that exceed competitive prices 
E)  None of these answers are correct.

Question 2

Prior to the late 1970s, the United States ________ about as much as it ________.

Accepted Answer

A)  exported; consumed 
B)  exported; imported 
C)  imported; consumed 
D)  invested; exported 
E)  imported; invested 
A)  exported; consumed 
B)  exported; imported 
C)  imported; consumed 
D)  invested; exported 
E)  imported; invested

Question 3

When calculating the real GDP using the Laspeyres index, we use the final period's prices.

Accepted Answer

A) True 
 B)False

Question 4

In 2012, government transfer payments accounted for about ________ of government spending.

Accepted Answer

A)  one-third 
B)  half 
C)  74 percent 
D)  three-fifths 
E)  100 percent 
A)  one-third 
B)  half 
C)  74 percent 
D)  three-fifths 
E)  100 percent

Question 5

If NGDP is nominal GDP and P is the price level, which of the following can be used to calculate the growth of the real GDP?

Accepted Answer

A)  percent change in NGDP - percent change in P 
B)  percent change in NGDP + percent change in P 
C)  percent change in NGDP $\times$ percent change in P 
D)  percent change in P + percent change in NGDP 
E)  percent change in P - percent change in NGDP 
A)  percent change in NGDP - percent change in P 
B)  percent change in NGDP + percent change in P 
C)  percent change in NGDP $\times$ percent change in P 
D)  percent change in P + percent change in NGDP 
E)  percent change in P - percent change in NGDP

Question 6

If the nominal GDP rises by 5 percent and the price level falls by 2 percent, the real GDP falls by 7 percent.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following does NOT count toward changes in the current GDP?

Accepted Answer

A)  A student buys another year of tuition. 
B)  You buy a used car from your parents. 
C)  The local police station buys new squad cars. 
D)  The Pentagon buys gasoline. 
E)  None of these answers are correct. 
A)  A student buys another year of tuition. 
B)  You buy a used car from your parents. 
C)  The local police station buys new squad cars. 
D)  The Pentagon buys gasoline. 
E)  None of these answers are correct.

Question 8

Real gross domestic product is defined as:

Accepted Answer

A)  the value of all goods and services produced by an economy, within its borders, over a period of time, at base-year prices 
B)  the value of all goods and services produced by an economy, within its borders, over a period of time, at current prices 
C)  the value of all goods produced by an economy, within its borders, over a period of time, at current prices 
D)  the value of all goods and services produced by an economy's citizens, regardless of where they live, over a period of time, at current prices 
E)  the value of all goods and services produced by an economy's citizens, regardless of where they live, over a period of time, at base-year prices 
A)  the value of all goods and services produced by an economy, within its borders, over a period of time, at base-year prices 
B)  the value of all goods and services produced by an economy, within its borders, over a period of time, at current prices 
C)  the value of all goods produced by an economy, within its borders, over a period of time, at current prices 
D)  the value of all goods and services produced by an economy's citizens, regardless of where they live, over a period of time, at current prices 
E)  the value of all goods and services produced by an economy's citizens, regardless of where they live, over a period of time, at base-year prices

Question 9

By how much does GDP change between 2010 and 2011 in the following scenario? In 2010, a rich woman has a chef and pays him $50,000 to cook for her. In 2010, she marries the chef and he continues to cook.

Accepted Answer

A)  GDP rises by $50,000. 
B)  GDP is unchanged. 
C)  GDP falls by $50,000. 
D)  GDP rises by $25,000. 
E)  Not enough information is given. 
A)  GDP rises by $50,000. 
B)  GDP is unchanged. 
C)  GDP falls by $50,000. 
D)  GDP rises by $25,000. 
E)  Not enough information is given.

Question 10

Refer to the following table when answering  
Table 2.2: U.S. 2011-2012 Domestic Income ($ billions)
 $$\begin{array} { l | r r } 
& { 2011 } & 2012 \
\hline \text { Compensation of employees, paid } & 8,303 & 8,600 \
\text { Wage and salary accruals } & 6,669 & 6,914 \
\text { Supplements to wages and salaries } & 1,634 & 1,687 \
\text { Taxes on production and imports } & 1,098 & 1,130 \
\text { Subsidies } & 62 & 61 \
\text { Net operating surplus } & 3,768 & 3,963 \
\text { Private enterprises } & 3,794 & 3,997 \
\text { Current surplus of government enterprises } & - 27 & - 34 \
\text { Depreciati on of fixed capital } & 1,937 & 2,012 \
\text { Private } & 1,587 & 1,648 \
\text { Government } & 349 & 364 \
\hline
\end{array}$$
-Consider Table 2.2, National Income Accounts for 2011 and 2012. From this data, total net domestic product in 2012 was about ________ billion.

Accepted Answer

A)  $13,632 
B)  $13,708 
C)  $15,645 
D)  $14,576 
E)  $11,743 
A)  $13,632 
B)  $13,708 
C)  $15,645 
D)  $14,576 
E)  $11,743

Question 11

In 2012, U.S. national output per person was equal to about:

Accepted Answer

A)  $15.7 billion 
B)  $43,000 
C)  $50,000 
D)  $12,000 
E)  $80,000 
A)  $15.7 billion 
B)  $43,000 
C)  $50,000 
D)  $12,000 
E)  $80,000

The difference between economic profits and normal profits is that:

Prior to the late 1970s, the United States about as much as it .

When calculating the real GDP using the Laspeyres index, we use the final period's prices.

In 2012, government transfer payments accounted for about ________ of government spending.

If NGDP is nominal GDP and P is the price level, which of the following can be used to calculate the growth of the real GDP?

If the nominal GDP rises by 5 percent and the price level falls by 2 percent, the real GDP falls by 7 percent.

Which of the following does NOT count toward changes in the current GDP?

Real gross domestic product is defined as:

By how much does GDP change between 2010 and 2011 in the following scenario? In 2010, a rich woman has a chef and pays him $50,000 to cook for her. In 2010, she marries the chef and he continues to cook.

In 2012, U.S. national output per person was equal to about:

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

The difference between economic profits and normal profits is that:

Prior to the late 1970s, the United States ________ about as much as it ________.

When calculating the real GDP using the Laspeyres index, we use the final period's prices.

In 2012, government transfer payments accounted for about ________ of government spending.

If NGDP is nominal GDP and P is the price level, which of the following can be used to calculate the growth of the real GDP?

If the nominal GDP rises by 5 percent and the price level falls by 2 percent, the real GDP falls by 7 percent.

Which of the following does NOT count toward changes in the current GDP?

Real gross domestic product is defined as:

By how much does GDP change between 2010 and 2011 in the following scenario? In 2010, a rich woman has a chef and pays him $50,000 to cook for her. In 2010, she marries the chef and he continues to cook.

In 2012, U.S. national output per person was equal to about:

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

Prior to the late 1970s, the United States about as much as it .