Question 1

Real GDP is always measured in

Accepted Answer

A)  cheaper dollars. 
B)  quality of goods produced. 
C)  base-year dollars. 
D)  nominal dollars. 
E)  current dollars. 
A)  cheaper dollars. 
B)  quality of goods produced. 
C)  base-year dollars. 
D)  nominal dollars. 
E)  current dollars.

Question 2

Suppose that net exports are -$300 billion and exports are $500 billion.Imports equals

Accepted Answer

A)  $800 billion. 
B)  $400 billion. 
C)  $200 billion. 
D)  -$200 billion. 
E)  There is not enough information to answer this question. 
A)  $800 billion. 
B)  $400 billion. 
C)  $200 billion. 
D)  -$200 billion. 
E)  There is not enough information to answer this question.

Question 3

If a person receives a (stock)dividend check,in the calculation of national income this is part of

Accepted Answer

A)  compensation of employees. 
B)  proprietors' income. 
C)  rental income. 
D)  net interest. 
E)  corporate profits. 
A)  compensation of employees. 
B)  proprietors' income. 
C)  rental income. 
D)  net interest. 
E)  corporate profits.

Question 4

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Accepted Answer

A)  federal government only. 
B)  state governments only. 
C)  local governments only. 
D)  state and local governments. 
E)  federal,state,and local governments. 
A)  federal government only. 
B)  state governments only. 
C)  local governments only. 
D)  state and local governments. 
E)  federal,state,and local governments.

Question 5

Which of the following would not be included in the calculation of this year's GDP?

Accepted Answer

A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co.from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above,i.e. ,all would be included 
A)  a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car 
B)  a headlight bulb purchased by Ford Motor Co.from a supplier 
C)  a headlight bulb produced but not sold this year and thus ending up as inventory 
D)  none of the above,i.e. ,all would be included

Question 6

Exhibit 7-1
  
-Refer to Exhibit 7-1.What is the value of national income?

Accepted Answer

A)  $4,351 
B)  $4,252 
C)  $4,403 
D)  $2,996 
E)  $4,542 
A)  $4,351 
B)  $4,252 
C)  $4,403 
D)  $2,996 
E)  $4,542

Question 7

Which of the following statements is true?

Accepted Answer

A)  Government purchases is the largest component of GDP. 
B)  Net exports are equal to exports plus imports. 
C)  U.S.imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States. 
D)  Government purchases includes the spending on goods and services by all levels of government (federal,state,and local). 
E)  c and d 
A)  Government purchases is the largest component of GDP. 
B)  Net exports are equal to exports plus imports. 
C)  U.S.imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States. 
D)  Government purchases includes the spending on goods and services by all levels of government (federal,state,and local). 
E)  c and d

Question 8

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

Accepted Answer

A)  $850. 
B)  $1,250. 
C)  $200. 
D)  $2,200. 
E)  $1,050. 
A)  $850. 
B)  $1,250. 
C)  $200. 
D)  $2,200. 
E)  $1,050.

Question 9

Suppose that nondurable goods spending is $200 billion,durable goods spending is $400 billion,new residential housing spending is $500 billion,and spending on services is $700 billion.What does consumption equal?

Accepted Answer

A)  $600 billion 
B)  $1,100 billion 
C)  $1,800 billion 
D)  $1,300 billion 
E)  There is not enough information to answer this question. 
A)  $600 billion 
B)  $1,100 billion 
C)  $1,800 billion 
D)  $1,300 billion 
E)  There is not enough information to answer this question.

Question 10

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

Accepted Answer

A)  Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher. 
B)  Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher. 
C)  Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures. 
D)  Because Real GDP is easier to compute than GDP. 
E)  Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher. 
A)  Because when GDP in one year is higher than in another year,there is no way to tell why it is higher.Is it because output is higher,prices are higher,etc.? This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because output is higher. 
B)  Because when GDP in one year is higher than in another year,there is no way of knowing if the quality of goods produced is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of the goods produced is higher. 
C)  Actually the question is incorrect.Economists prefer to compare GDP figures instead of Real GDP figures. 
D)  Because Real GDP is easier to compute than GDP. 
E)  Because when GDP in one year is higher than in another year,there is no way to tell if the quality of life is higher in one year than the other.This is not the case with Real GDP.If Real GDP is higher in one year than in another year,it is because the quality of life is higher.

Question 11

Which of the following is a nonmarket good?

Accepted Answer

A)  the corn you grow in your home garden and consume 
B)  the clothes you sew and sell to a neighbor who pays you by writing you a check 
C)  the self-portrait hanging in your den 
D)  a and c 
E)  a,b,and c 
A)  the corn you grow in your home garden and consume 
B)  the clothes you sew and sell to a neighbor who pays you by writing you a check 
C)  the self-portrait hanging in your den 
D)  a and c 
E)  a,b,and c

Question 12

Exhibit 7-1
  
-Refer to Exhibit 7-1.What is the value of disposable income?

Accepted Answer

A)  $3,618 
B)  $4,795 
C)  $3,727 
D)  $4,207 
E)  $4,017 
A)  $3,618 
B)  $4,795 
C)  $3,727 
D)  $4,207 
E)  $4,017

Question 13

The expenditure approach to measuring GDP sums

Accepted Answer

A)  consumption,investment,government purchases,and net exports. 
B)  sales,revenues,income,and wages. 
C)  profits,compensation of employees,consumption,and investment. 
D)  net exports,consumption,wages,and salaries. 
E)  consumption,interest,net exports,and federal government purchases 
A)  consumption,investment,government purchases,and net exports. 
B)  sales,revenues,income,and wages. 
C)  profits,compensation of employees,consumption,and investment. 
D)  net exports,consumption,wages,and salaries. 
E)  consumption,interest,net exports,and federal government purchases

Question 14

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

Accepted Answer

A)  $3,700. 
B)  $9,000. 
C)  $10,150. 
D)  $8,200. 
E)  $9,700. 
A)  $3,700. 
B)  $9,000. 
C)  $10,150. 
D)  $8,200. 
E)  $9,700.

Question 15

Gross Domestic Product (GDP)is the total market value of all

Accepted Answer

A)  final goods and services produced annually within a country's borders. 
B)  final and intermediate goods and services produced annually within a country's borders. 
C)  intermediate goods and services produced annually within a country's borders. 
D)  final goods and services produced every month within a country's borders. 
A)  final goods and services produced annually within a country's borders. 
B)  final and intermediate goods and services produced annually within a country's borders. 
C)  intermediate goods and services produced annually within a country's borders. 
D)  final goods and services produced every month within a country's borders.

Question 16

Compensation of employees is the largest spending component of GDP.

Accepted Answer

A) True 
 B)False

Question 17

The standard definition of "recession" is

Accepted Answer

A)  a period of a positive frictional unemployment rate. 
B)  two consecutive quarters of falling Real GDP. 
C)  the lowest point in a business cycle. 
D)  a period of negative inflation. 
A)  a period of a positive frictional unemployment rate. 
B)  two consecutive quarters of falling Real GDP. 
C)  the lowest point in a business cycle. 
D)  a period of negative inflation.

Question 18

Exhibit 7-1
  
-Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

Accepted Answer

A)  $4,150 + $751 + $850 + $300 
B)  $4,150 + $751 + $850 - $331 + $300 
C)  $4,150 + $751 + $850 + $331 + $300 
D)  $4,150 + $751 + $850 + $331 + $300 - $320 
E)  $4,150 + $751 + $850 + $331 + $300 - $320 + $111 
A)  $4,150 + $751 + $850 + $300 
B)  $4,150 + $751 + $850 - $331 + $300 
C)  $4,150 + $751 + $850 + $331 + $300 
D)  $4,150 + $751 + $850 + $331 + $300 - $320 
E)  $4,150 + $751 + $850 + $331 + $300 - $320 + $111

Question 19

The best reason economists take only final goods and services into account when calculating GDP is that

Accepted Answer

A)  this is the way things have always been done. 
B)  they want to avoid the problem of final counting. 
C)  they want to avoid the problem of double counting. 
D)  this is the only way things can be done. 
A)  this is the way things have always been done. 
B)  they want to avoid the problem of final counting. 
C)  they want to avoid the problem of double counting. 
D)  this is the only way things can be done.

Question 20

Countries with a large GDP must also have a large per-capita GDP.

Accepted Answer

A) True 
 B)False

Exam 7: Macroeconomic Measurements, Gdp and Real Gdp

Real GDP is always measured in

Suppose that net exports are -$300 billion and exports are $500 billion.Imports equals

If a person receives a (stock)dividend check,in the calculation of national income this is part of

Government purchases consist of the total dollar amount(s)spent on goods and services by the

Which of the following would not be included in the calculation of this year's GDP?

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of national income?

Which of the following statements is true?

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

Suppose that nondurable goods spending is $200 billion,durable goods spending is $400 billion,new residential housing spending is $500 billion,and spending on services is $700 billion.What does consumption equal?

Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?

Which of the following is a nonmarket good?

Exhibit 7-1 -Refer to Exhibit 7-1.What is the value of disposable income?

The expenditure approach to measuring GDP sums

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

Gross Domestic Product (GDP)is the total market value of all

Compensation of employees is the largest spending component of GDP.

The standard definition of "recession" is

Exhibit 7-1 -Refer to Exhibit 7-1.Which of the following summations represents GDP using the expenditure approach?

The best reason economists take only final goods and services into account when calculating GDP is that

Countries with a large GDP must also have a large per-capita GDP.

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

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