Question 1

The phase of the business cycle where the economy is growing slower than usual is called:

Accepted Answer

A)  an economic trough. 
B)  the long-run trend of GDP. 
C)  an economic expansion. 
D)  an economic contraction. 
E)  an economic peak. 
A)  an economic trough. 
B)  the long-run trend of GDP. 
C)  an economic expansion. 
D)  an economic contraction. 
E)  an economic peak.

Question 2

The consumption category of GDP includes all purchases of final goods and services by households except:

Accepted Answer

A)  new appliances. 
B)  new houses. 
C)  landscaping work. 
D)  new cars. 
E)  food. 
A)  new appliances. 
B)  new houses. 
C)  landscaping work. 
D)  new cars. 
E)  food.

Question 3

Farmer John produces oranges. He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000. Tropicali uses the oranges to make orange juice, which it sells to consumers for $25,000. The impact of these transactions on GDP is:

Accepted Answer

A)  $20,000. 
B)  $45,000. 
C)  $60,000. 
D)  $30,000. 
E)  $25,000. 
A)  $20,000. 
B)  $45,000. 
C)  $60,000. 
D)  $30,000. 
E)  $25,000.

Question 4

If real GDP grew by 4% and nominal GDP grew by 3%, then the inflation rate was:

Accepted Answer

A)  1%. 
B)  -1%. 
C)  7%. 
D)  12%. 
E)  0%. 
A)  1%. 
B)  -1%. 
C)  7%. 
D)  12%. 
E)  0%.

Question 5

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions:  
-What is the value of the GDP deflator in 2011? Round to the nearest decimal.

Accepted Answer

A)  54.6 
B)  154.6 
C)  110.0 
D)  90.9 
E)  112.0 
A)  54.6 
B)  154.6 
C)  110.0 
D)  90.9 
E)  112.0

Question 6

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5% sales commission. This transaction will increase GDP by:

Accepted Answer

A)  $0. 
B)  $50,000. 
C)  $15,000. 
D)  $65,000. 
E)  $300,000. 
A)  $0. 
B)  $50,000. 
C)  $15,000. 
D)  $65,000. 
E)  $300,000.

Question 7

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the next  questions:  
-In what quarter did this economy enter a recession?

Accepted Answer

A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9 
A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9

Question 8

An example of an intermediate good would be:

Accepted Answer

A)  lumber used by a consumer to build a fence in their yard. 
B)  pencils purchased by a restaurant to be used to take orders. 
C)  a new stove purchased by a restaurant. 
D)  an airplane purchased by the government. 
E)  Social Security payments made by the government. 
A)  lumber used by a consumer to build a fence in their yard. 
B)  pencils purchased by a restaurant to be used to take orders. 
C)  a new stove purchased by a restaurant. 
D)  an airplane purchased by the government. 
E)  Social Security payments made by the government.

Question 9

To determine a value for GDP, you would:

Accepted Answer

A)  add up the quantities of the final goods and services produced. 
B)  add up the dollar value of the final goods and services produced. 
C)  add up the dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  add up the dollar value of all goods and services produced. 
E)  add up the quantities of all goods and services produced. 
A)  add up the quantities of the final goods and services produced. 
B)  add up the dollar value of the final goods and services produced. 
C)  add up the dollar value of the final goods and services produced minus the dollar value of the intermediate goods and services produced. 
D)  add up the dollar value of all goods and services produced. 
E)  add up the quantities of all goods and services produced.

Question 10

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions:  
-What is the value of real GDP in 2010? Round to the nearest second decimal.

Accepted Answer

A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million 
A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million

Question 11

When people in the United States buy clothing made in China, this counts as:

Accepted Answer

A)  consumption. 
B)  consumption and exports. 
C)  consumption and imports. 
D)  imports. 
E)  investment. 
A)  consumption. 
B)  consumption and exports. 
C)  consumption and imports. 
D)  imports. 
E)  investment.

Question 12

Consider the following data to answer the next  questions:  
-Which country has the highest level of GDP per capita?

Accepted Answer

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

Question 13

A company produces a computer. They pay $100 for the keyboard and outer case, $200 for the internal hardware, and $100 for the software. They sell it to a consumer for $500. The contribution to GDP is:

Accepted Answer

A)  $400. 
B)  $500. 
C)  $100. 
D)  $900. 
E)  $800. 
A)  $400. 
B)  $500. 
C)  $100. 
D)  $900. 
E)  $800.

Question 14

For the next  questions, suppose a country has the following quarterly growth data for the last three years:  
-The country's long-run average growth rate is 3%. How many quarters were spent in recession?

Accepted Answer

A)  six 
B)  five 
C)  four 
D)  three 
E)  two 
A)  six 
B)  five 
C)  four 
D)  three 
E)  two

Question 15

If real GDP grew by 2% and the inflation rate was 2%, then nominal GDP grew by:

Accepted Answer

A)  2%. 
B)  4%. 
C)  0%. 
D)  1%. 
E)  3%. 
A)  2%. 
B)  4%. 
C)  0%. 
D)  1%. 
E)  3%.

Question 16

When George buys a new computer for his business, it is included in GDP as _______, and when he buys a new computer for use at home, it counts as ________.

Accepted Answer

A)  investment; investment 
B)  consumption; consumption 
C)  consumption; investment 
D)  investment; consumption 
E)  investment; services 
A)  investment; investment 
B)  consumption; consumption 
C)  consumption; investment 
D)  investment; consumption 
E)  investment; services

Question 17

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions:  
-What is the value of nominal GDP in 2009?

Accepted Answer

A)  $50,000 million 
B)  $500 million 
C)  $400 million 
D)  $600 million 
E)  $100 million 
A)  $50,000 million 
B)  $500 million 
C)  $400 million 
D)  $600 million 
E)  $100 million

Question 18

Joe has a full-time construction job and also does odd jobs for people on the weekends. You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence. Does the payment to Joe count toward the value of GDP?

Accepted Answer

A)  Yes, the fence increases the value of your house. 
B)  Yes, all income earned counts in GDP. 
C)  No, his is a non-market activity. 
D)  No, if this income is not likely to be reported to the government. 
E)  No, this is a leisure activity. 
A)  Yes, the fence increases the value of your house. 
B)  Yes, all income earned counts in GDP. 
C)  No, his is a non-market activity. 
D)  No, if this income is not likely to be reported to the government. 
E)  No, this is a leisure activity.

Question 19

When an unemployed worker receives a payment from the government as a result of being unemployed, it is:

Accepted Answer

A)  included in the consumption category of GDP. 
B)  included in the investment category of GDP. 
C)  included in the government purchases category of GDP. 
D)  included in the net export category of GDP. 
E)  not included in any of the expenditure categories. 
A)  included in the consumption category of GDP. 
B)  included in the investment category of GDP. 
C)  included in the government purchases category of GDP. 
D)  included in the net export category of GDP. 
E)  not included in any of the expenditure categories.

Question 20

Assuming the price level increased, real GDP is greater than nominal GDP if the current year is ________ the base year, and real GDP is less than nominal GDP if the current year is ________ the base year.

Accepted Answer

A)  before; before 
B)  before; after 
C)  after; after 
D)  after; before 
E)  equal to; equal to 
A)  before; before 
B)  before; after 
C)  after; after 
D)  after; before 
E)  equal to; equal to

The phase of the business cycle where the economy is growing slower than usual is called:

The consumption category of GDP includes all purchases of final goods and services by households except:

Farmer John produces oranges. He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000. Tropicali uses the oranges to make orange juice, which it sells to consumers for $25,000. The impact of these transactions on GDP is:

If real GDP grew by 4% and nominal GDP grew by 3%, then the inflation rate was:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of the GDP deflator in 2011? Round to the nearest decimal.

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5% sales commission. This transaction will increase GDP by:

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the next questions: -In what quarter did this economy enter a recession?

An example of an intermediate good would be:

To determine a value for GDP, you would:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of real GDP in 2010? Round to the nearest second decimal.

When people in the United States buy clothing made in China, this counts as:

Consider the following data to answer the next questions: -Which country has the highest level of GDP per capita?

A company produces a computer. They pay $100 for the keyboard and outer case, $200 for the internal hardware, and $100 for the software. They sell it to a consumer for $500. The contribution to GDP is:

For the next questions, suppose a country has the following quarterly growth data for the last three years: -The country's long-run average growth rate is 3%. How many quarters were spent in recession?

If real GDP grew by 2% and the inflation rate was 2%, then nominal GDP grew by:

When George buys a new computer for his business, it is included in GDP as _, and when he buys a new computer for use at home, it counts as __.

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of nominal GDP in 2009?

Joe has a full-time construction job and also does odd jobs for people on the weekends. You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence. Does the payment to Joe count toward the value of GDP?

When an unemployed worker receives a payment from the government as a result of being unemployed, it is:

Assuming the price level increased, real GDP is greater than nominal GDP if the current year is the base year, and real GDP is less than nominal GDP if the current year is the base year.

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

The phase of the business cycle where the economy is growing slower than usual is called:

The consumption category of GDP includes all purchases of final goods and services by households except:

Farmer John produces oranges. He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000. Tropicali uses the oranges to make orange juice, which it sells to consumers for $25,000. The impact of these transactions on GDP is:

If real GDP grew by 4% and nominal GDP grew by 3%, then the inflation rate was:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of the GDP deflator in 2011? Round to the nearest decimal.

Joe sells the house he has lived in for 10 years to the Smith family for $300,000. He receives $50,000 more than his original purchase price 10 years ago. Joe pays his real estate agent a 5% sales commission. This transaction will increase GDP by:

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the next questions: -In what quarter did this economy enter a recession?

An example of an intermediate good would be:

To determine a value for GDP, you would:

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of real GDP in 2010? Round to the nearest second decimal.

When people in the United States buy clothing made in China, this counts as:

Consider the following data to answer the next questions: -Which country has the highest level of GDP per capita?

A company produces a computer. They pay $100 for the keyboard and outer case, $200 for the internal hardware, and $100 for the software. They sell it to a consumer for $500. The contribution to GDP is:

For the next questions, suppose a country has the following quarterly growth data for the last three years: -The country's long-run average growth rate is 3%. How many quarters were spent in recession?

If real GDP grew by 2% and the inflation rate was 2%, then nominal GDP grew by:

When George buys a new computer for his business, it is included in GDP as _______, and when he buys a new computer for use at home, it counts as ________.

Consider the following data, where GDP values are measured in millions of dollars, to answer the next questions: -What is the value of nominal GDP in 2009?

Joe has a full-time construction job and also does odd jobs for people on the weekends. You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence. Does the payment to Joe count toward the value of GDP?

When an unemployed worker receives a payment from the government as a result of being unemployed, it is:

Assuming the price level increased, real GDP is greater than nominal GDP if the current year is ________ the base year, and real GDP is less than nominal GDP if the current year is ________ the base year.

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 George buys a new computer for his business, it is included in GDP as _, and when he buys a new computer for use at home, it counts as __.

Assuming the price level increased, real GDP is greater than nominal GDP if the current year is the base year, and real GDP is less than nominal GDP if the current year is the base year.