Question 1

Country A has a higher GDP than country B.What does this mean?

Accepted Answer

A)  It means that on a per-capita basis the residents of country A are relatively better off (in terms of the goods and services they have available to them)than the residents of country B. 
B)  It means that on a per-capita basis the residents of country A are richer than the residents of country B. 
C)  It means that more goods and services were produced in country A than country B. 
D)  It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B. 
E)  a and d 
A)  It means that on a per-capita basis the residents of country A are relatively better off (in terms of the goods and services they have available to them)than the residents of country B. 
B)  It means that on a per-capita basis the residents of country A are richer than the residents of country B. 
C)  It means that more goods and services were produced in country A than country B. 
D)  It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B. 
E)  a and d

Question 2

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract

Accepted Answer

A)  depreciation or capital consumption allowance from GDP. 
B)  gross private domestic investment from GDP. 
C)  imports from GDP. 
D)  inventory investment from GDP. 
E)  the statistical discrepancy from GDP. 
A)  depreciation or capital consumption allowance from GDP. 
B)  gross private domestic investment from GDP. 
C)  imports from GDP. 
D)  inventory investment from GDP. 
E)  the statistical discrepancy from GDP.

Question 3

The sum of durable goods,nondurable goods,and services equals

Accepted Answer

A)  investment. 
B)  fixed investment. 
C)  government purchases. 
D)  consumption. 
E)  net exports. 
A)  investment. 
B)  fixed investment. 
C)  government purchases. 
D)  consumption. 
E)  net exports.

Question 4

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations.Explain why these transactions are not included in GDP and give an example of each to help support your answer.

Accepted Answer

Certain nonmarket goods and services are

Question 5

Suppose that consumption spending is $4,200 billion,spending on durable goods is $1,200 billion,and spending on services is $2,000 billion.What does spending on nondurable goods equal?

Accepted Answer

A)  $7,200 billion 
B)  $1,000 billion 
C)  $2,200 billion 
D)  $3,200 billion 
E)  There is not enough information to answer this question. 
A)  $7,200 billion 
B)  $1,000 billion 
C)  $2,200 billion 
D)  $3,200 billion 
E)  There is not enough information to answer this question.

Question 6

Capital consumption allowance refers to

Accepted Answer

A)  capital goods being used up in production through natural wear,obsolescence,and accidental destruction. 
B)  people sending money between countries. 
C)  the purchase of used factories. 
D)  the purchase of goods that allow households to consume more services. 
A)  capital goods being used up in production through natural wear,obsolescence,and accidental destruction. 
B)  people sending money between countries. 
C)  the purchase of used factories. 
D)  the purchase of goods that allow households to consume more services.

Question 7

GDP includes some nonmarket goods.

Accepted Answer

A) True 
 B)False

Question 8

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

Accepted Answer

The recovery phase is the period when Re

Question 9

In the definition of GDP,the words "total market value" refer to total

Accepted Answer

A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d 
A)  dollar value at base prices. 
B)  dollar value at current prices. 
C)  subjective value. 
D)  objective value. 
E)  a and d

Question 10

Exhibit 7-5
Economic Data for Country Z
  
-Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 1 and year 2?

Accepted Answer

A)  7.3% 
B)  8.3% 
C)  5.3% 
D)  6.8% 
A)  7.3% 
B)  8.3% 
C)  5.3% 
D)  6.8%

Question 11

Exhibit 7-5
Economic Data for Country Z
  
-Refer to Exhibit 7-5.During year 3,Country Z experienced economic _____________ and _________________.

Accepted Answer

A)  decline;deflation (falling price level) 
B)  growth;inflation (rising price level) 
C)  growth;deflation (falling price level) 
D)  decline;inflation (rising price level) 
A)  decline;deflation (falling price level) 
B)  growth;inflation (rising price level) 
C)  growth;deflation (falling price level) 
D)  decline;inflation (rising price level)

Question 12

Exhibit 7-2
  
-Refer to Exhibit 7-2.Assuming that 1990 is the base year,Real GDP in 2012 is

Accepted Answer

A)  $49. 
B)  $51. 
C)  $86. 
D)  $92. 
E)  not possible to calculate without the CPI. 
A)  $49. 
B)  $51. 
C)  $86. 
D)  $92. 
E)  not possible to calculate without the CPI.

Question 13

Which of the following statements is false?

Accepted Answer

A)  The market value of all nonmarket goods is omitted from GDP. 
B)  The sale of used goods is omitted from GDP. 
C)  The market value of a person mowing his or her own lawn is omitted from GDP. 
D)  If a good is produced but not sold,it is included in GDP. 
A)  The market value of all nonmarket goods is omitted from GDP. 
B)  The sale of used goods is omitted from GDP. 
C)  The market value of a person mowing his or her own lawn is omitted from GDP. 
D)  If a good is produced but not sold,it is included in GDP.

Question 14

Exhibit 7-3
  
-Refer to Exhibit 7-3.GDP is equal to

Accepted Answer

A)  $13,050. 
B)  $11,550. 
C)  $8,600. 
D)  $11,450. 
E)  $14,000. 
A)  $13,050. 
B)  $11,550. 
C)  $8,600. 
D)  $11,450. 
E)  $14,000.

Question 15

In the United States,which is the largest dollar figure?

Accepted Answer

A)  national income 
B)  gross domestic product 
C)  net domestic product 
D)  personal income 
A)  national income 
B)  gross domestic product 
C)  net domestic product 
D)  personal income

Question 16

Which of the following is always a characteristic of the contraction phase of the business cycle?

Accepted Answer

A)  lower unemployment rates 
B)  a decline in Real GDP 
C)  higher inflation rates 
D)  a decline in GDP 
E)  all of the above 
A)  lower unemployment rates 
B)  a decline in Real GDP 
C)  higher inflation rates 
D)  a decline in GDP 
E)  all of the above

Question 17

An example of income earned but not received is

Accepted Answer

A)  welfare payments. 
B)  Social Security payments. 
C)  undistributed profits. 
D)  a and b 
E)  a,b,and c 
A)  welfare payments. 
B)  Social Security payments. 
C)  undistributed profits. 
D)  a and b 
E)  a,b,and c

Question 18

Suppose that fixed investment is $550 billion and (total)investment is $630 billion.What does inventory investment equal?

Accepted Answer

A)  $80 billion 
B)  $550 billion 
C)  $630 billion 
D)  $1,180 billion 
E)  There is not enough information to answer this question. 
A)  $80 billion 
B)  $550 billion 
C)  $630 billion 
D)  $1,180 billion 
E)  There is not enough information to answer this question.

Question 19

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

Accepted Answer

A)  9.73 percent 
B)  2.67 percent 
C)  3.58 percent 
D)  2.74 percent 
A)  9.73 percent 
B)  2.67 percent 
C)  3.58 percent 
D)  2.74 percent

Question 20

National income equals

Accepted Answer

A)  wages + salaries + corporate profits + net income. 
B)  compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C)  compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D)  the monetary value of fringe benefits + tips + wages + profits + salaries. 
E)  none of the above 
A)  wages + salaries + corporate profits + net income. 
B)  compensation of employees + proprietors' income + corporate profits + rental income + net interest. 
C)  compensation of employees + proprietors' income + indirect business taxes + rental income + net interest. 
D)  the monetary value of fringe benefits + tips + wages + profits + salaries. 
E)  none of the above

Exam 7: Macroeconomic Measurements, Gdp and Real Gdp

Country A has a higher GDP than country B.What does this mean?

To derive net domestic product (NDP)from gross domestic product (GDP),we must subtract

The sum of durable goods,nondurable goods,and services equals

List and describe four of the six categories of economic exchanges that are omitted from GDP calculations.Explain why these transactions are not included in GDP and give an example of each to help support your answer.

Suppose that consumption spending is $4,200 billion,spending on durable goods is $1,200 billion,and spending on services is $2,000 billion.What does spending on nondurable goods equal?

Capital consumption allowance refers to

GDP includes some nonmarket goods.

With respect to the business cycle,describe the difference between the expansion phase and the recovery phase.

In the definition of GDP,the words "total market value" refer to total

Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5.What was Country Z's economic growth rate between year 1 and year 2?

Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5.During year 3,Country Z experienced economic _____________ and _________________.

Exhibit 7-2 -Refer to Exhibit 7-2.Assuming that 1990 is the base year,Real GDP in 2012 is

Which of the following statements is false?

Exhibit 7-3 -Refer to Exhibit 7-3.GDP is equal to

In the United States,which is the largest dollar figure?

Which of the following is always a characteristic of the contraction phase of the business cycle?

An example of income earned but not received is

Suppose that fixed investment is $550 billion and (total)investment is $630 billion.What does inventory investment equal?

If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1,what was the approximate economic growth rate during this time period?

National income equals

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

Exhibit 7-5 Economic Data for Country Z -Refer to Exhibit 7-5.During year 3,Country Z experienced economic _ and _____.