Question 1

When John buys new tires for his car it _______, and when Ford buys tires to put on new cars it ____________.

Accepted Answer

A)  does not count toward GDP; does not count toward GDP 
B)  does not count toward GDP; counts toward investment 
C)  counts toward consumption; counts toward investment 
D)  counts toward consumption; does not count toward GDP 
E)  counts toward investment; counts toward investment 
A)  does not count toward GDP; does not count toward GDP 
B)  does not count toward GDP; counts toward investment 
C)  counts toward consumption; counts toward investment 
D)  counts toward consumption; does not count toward GDP 
E)  counts toward investment; counts toward investment

Question 2

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions:  
-The market value of cell phones is:

Accepted Answer

A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million. 
A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million.

Question 3

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next  questions: Assume that the base year is 2012.  
-What was the rate of inflation between the two years?

Accepted Answer

A)  19.44% 
B)  8.57% 
C)  6.67% 
D)  2.38% 
E)  16.67% 
A)  19.44% 
B)  8.57% 
C)  6.67% 
D)  2.38% 
E)  16.67%

Question 4

Explain why intermediate goods and used goods do not count in GDP.

Accepted Answer

Used goods do not count because they wer

Question 5

Consider the following figure to answer the next  questions:  
-In which year was the economy growing at the long-run average growth rate?

Accepted Answer

A)  2001 
B)  2004 
C)  2005 
D)  2009 
E)  2013 
A)  2001 
B)  2004 
C)  2005 
D)  2009 
E)  2013

Question 6

A country's nominal GDP has declined over the last year. Are the people in the country necessarily worse off, on average? Please explain.

Accepted Answer

The people are not necessarily worse off

Question 7

Nominal GDP is equal to:

Accepted Answer

A)  current prices * base year output. 
B)  current prices * current output. 
C)  base prices * base year output. 
D)  base year prices * current output. 
E)  current output √ base year prices. 
A)  current prices * base year output. 
B)  current prices * current output. 
C)  base prices * base year output. 
D)  base year prices * current output. 
E)  current output √ base year prices.

Question 8

Nominal GDP increased from $15.62 trillion to $16.09 trillion, and the price level increased from 120.0 to 122.4. The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Accepted Answer

A)  2.92%. 
B)  3.01%. 
C)  1.87%. 
D)  1.00%. 
E)  2.00%. 
A)  2.92%. 
B)  3.01%. 
C)  1.87%. 
D)  1.00%. 
E)  2.00%.

Question 9

Country A has a GDP of $200,000 and a population of 1,000. Country B has a GDP of $400,000 and a population of 4,000. Which of the following is true?

Accepted Answer

A)  The value of output is higher in country A. 
B)  The value of income is higher in country A. 
C)  The value of GDP per capita is higher in country A. 
D)  The value of GDP per capita is higher in country B. 
E)  The average living standard is higher in country B. 
A)  The value of output is higher in country A. 
B)  The value of income is higher in country A. 
C)  The value of GDP per capita is higher in country A. 
D)  The value of GDP per capita is higher in country B. 
E)  The average living standard is higher in country B.

Question 10

If nominal GDP is declining, then it must be the case that:

Accepted Answer

A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling. 
A)  fewer goods and services are being produced. 
B)  prices must be lower on average. 
C)  prices must be increasing more rapidly than production. 
D)  prices are falling at a greater rate than production is rising. 
E)  production is rising at a greater rate than prices are falling.

Question 11

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Accepted Answer

A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs. 
A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs.

Question 12

Nominal GDP increased from $14.0 trillion to $14.7 trillion, and the price level increased from 120 to 126. Which of the following is true?

Accepted Answer

A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP. 
A)  Output grew faster than the price level. 
B)  Output grew slower than the price level. 
C)  Real GDP grew faster than nominal GDP. 
D)  Output grew at the same rate as the price level. 
E)  Real GDP grew at the same rate as nominal GDP.

Question 13

When GDP increases, national income ________ and national output __________.

Accepted Answer

A)  is unaffected; is unaffected 
B)  increases; increases 
C)  decreases; decreases 
D)  increases; is unaffected 
E)  is unaffected; decreases 
A)  is unaffected; is unaffected 
B)  increases; increases 
C)  decreases; decreases 
D)  increases; is unaffected 
E)  is unaffected; decreases

Question 14

The GDP deflator is a measure of the price level that includes prices of:

Accepted Answer

A)  consumer goods and services only. 
B)  producer goods and services only. 
C)  final and intermediate goods and services. 
D)  final goods and services. 
E)  final services only. 
A)  consumer goods and services only. 
B)  producer goods and services only. 
C)  final and intermediate goods and services. 
D)  final goods and services. 
E)  final services only.

Question 15

The percent change in the overall level of prices in the economy is called:

Accepted Answer

A)  the inflation rate. 
B)  the growth rate of GDP. 
C)  GDP. 
D)  GDP per capita. 
E)  the interest rate. 
A)  the inflation rate. 
B)  the growth rate of GDP. 
C)  GDP. 
D)  GDP per capita. 
E)  the interest rate.

Question 16

The expansion phase of a business cycle is best described as:

Accepted Answer

A)  the time elapsed from a trough to a peak. 
B)  the time elapsed from a peak to a trough. 
C)  the time elapsed from a peak to a peak. 
D)  the time elapsed from a trough to a trough. 
E)  the time spent producing above the long-run trend of GDP. 
A)  the time elapsed from a trough to a peak. 
B)  the time elapsed from a peak to a trough. 
C)  the time elapsed from a peak to a peak. 
D)  the time elapsed from a trough to a trough. 
E)  the time spent producing above the long-run trend of GDP.

Question 17

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions:  
-What was the growth rate of real GDP from 2011 to 2012?

Accepted Answer

A)  2% 
B)  1% 
C)  10% 
D)  20% 
E)  5% 
A)  2% 
B)  1% 
C)  10% 
D)  20% 
E)  5%

Question 18

Consider the following data to answer the next  questions:  
-Which country has the lowest average living standard?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 19

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions:  
-What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

Accepted Answer

A)  3.8% 
B)  4.0% 
C)  3.6% 
D)  2.0% 
E)  2.2% 
A)  3.8% 
B)  4.0% 
C)  3.6% 
D)  2.0% 
E)  2.2%

Question 20

The sale of American-grown corn to China is included in the ________ category of GDP.

Accepted Answer

A)  consumption 
B)  investment 
C)  government purchases 
D)  export 
E)  import 
A)  consumption 
B)  investment 
C)  government purchases 
D)  export 
E)  import

When John buys new tires for his car it _, and when Ford buys tires to put on new cars it ______.

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: -The market value of cell phones is:

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next questions: Assume that the base year is 2012. -What was the rate of inflation between the two years?

Explain why intermediate goods and used goods do not count in GDP.

Consider the following figure to answer the next questions: -In which year was the economy growing at the long-run average growth rate?

A country's nominal GDP has declined over the last year. Are the people in the country necessarily worse off, on average? Please explain.

Nominal GDP is equal to:

Nominal GDP increased from $15.62 trillion to $16.09 trillion, and the price level increased from 120.0 to 122.4. The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Country A has a GDP of $200,000 and a population of 1,000. Country B has a GDP of $400,000 and a population of 4,000. Which of the following is true?

If nominal GDP is declining, then it must be the case that:

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Nominal GDP increased from $14.0 trillion to $14.7 trillion, and the price level increased from 120 to 126. Which of the following is true?

When GDP increases, national income and national output __.

The GDP deflator is a measure of the price level that includes prices of:

The percent change in the overall level of prices in the economy is called:

The expansion phase of a business cycle is best described as:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What was the growth rate of real GDP from 2011 to 2012?

Consider the following data to answer the next questions: -Which country has the lowest average living standard?

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

The sale of American-grown corn to China is included in the ________ category of GDP.

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Exam 6: Introduction to Macroeconomics and Gross Domestic Product

When John buys new tires for his car it _______, and when Ford buys tires to put on new cars it ____________.

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: -The market value of cell phones is:

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next questions: Assume that the base year is 2012. -What was the rate of inflation between the two years?

Explain why intermediate goods and used goods do not count in GDP.

Consider the following figure to answer the next questions: -In which year was the economy growing at the long-run average growth rate?

A country's nominal GDP has declined over the last year. Are the people in the country necessarily worse off, on average? Please explain.

Nominal GDP is equal to:

Nominal GDP increased from $15.62 trillion to $16.09 trillion, and the price level increased from 120.0 to 122.4. The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Country A has a GDP of $200,000 and a population of 1,000. Country B has a GDP of $400,000 and a population of 4,000. Which of the following is true?

If nominal GDP is declining, then it must be the case that:

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Nominal GDP increased from $14.0 trillion to $14.7 trillion, and the price level increased from 120 to 126. Which of the following is true?

When GDP increases, national income ________ and national output __________.

The GDP deflator is a measure of the price level that includes prices of:

The percent change in the overall level of prices in the economy is called:

The expansion phase of a business cycle is best described as:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What was the growth rate of real GDP from 2011 to 2012?

Consider the following data to answer the next questions: -Which country has the lowest average living standard?

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

The sale of American-grown corn to China is included in the ________ category of GDP.

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

When John buys new tires for his car it _, and when Ford buys tires to put on new cars it ______.

When GDP increases, national income and national output __.