Question 1

According to the income approach to GDP, the largest portion of GDP is compensation to employees.

Accepted Answer

A) True 
 B)False

Question 2

By how much does GDP change between 2014 and 2015 in the following scenario? In 2014, a rich woman has a chef and pays him $50,000 to cook for her. In 2015, 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 3

Net exports are also called:

Accepted Answer

A)  capital outflows. 
B)  the trade balance. 
C)  the current account. 
D)  foreign aid. 
E)  government transfers. 
A)  capital outflows. 
B)  the trade balance. 
C)  the current account. 
D)  foreign aid. 
E)  government transfers.

Question 4

If the percent change in prices is greater than the percent change in the nominal GDP, the real GDP rises.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  A student pays for 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 is correct. 
A)  A student pays for 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 is correct.

Question 6

When you buy a car from your brother, which he bought new in 2000, the purchase adds to current GDP.

Accepted Answer

A) True 
 B)False

Question 7

An economy's ________ is/are equal to its ________.

Accepted Answer

A)  consumption; income 
B)  expenditure on goods and services; output 
C)  expenditure on goods; expenditure on services 
D)  investment; government expenditures 
E)  taxes; net exports 
A)  consumption; income 
B)  expenditure on goods and services; output 
C)  expenditure on goods; expenditure on services 
D)  investment; government expenditures 
E)  taxes; net exports

Question 8

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

Accepted Answer

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

Question 9

In 2015, investment expenditures accounted for about ________ percent of total GDP.

Accepted Answer

A)  71 
B) -3.5 
C)  17 
D)  10 
E)  15 
A)  71 
B) -3.5 
C)  17 
D)  10 
E)  15

Question 10

Nominal GDP is the ________ of all goods and services produced in a period of time using ________ prices.

Accepted Answer

A)  value; 1945 
B)  summation; current 
C)  value; a previous year's 
D)  value; current 
E)  summation; base-year 
A)  value; 1945 
B)  summation; current 
C)  value; a previous year's 
D)  value; current 
E)  summation; base-year

Question 11

Refer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios.
Table 2.3: National Income Accounting  
-Consider Table 2.3. Using the Laspeyres index, the real GDP in 2018 is:

Accepted Answer

A)  $9,025. 
B)  $8,500. 
C)  $8,600. 
D)  $9,150. 
E)  $8,475. 
A)  $9,025. 
B)  $8,500. 
C)  $8,600. 
D)  $9,150. 
E)  $8,475.

Question 12

GDP measures the value of all economic activity.

Accepted Answer

A) True 
 B)False

Question 13

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

Accepted Answer

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

Question 14

What are the components that make up the income approach to calculating GDP? What are the components that make up the expenditure approach to calculating GDP?

Accepted Answer

(a) Income approach: compensation to emp

Question 15

If the percent change in the price level is ________ than the percent change in ________ GDP, ________.

Accepted Answer

A)  smaller; nominal; real GDP shrinks 
B)  greater; nominal; real GDP shrinks 
C)  greater; real; nominal GDP shrinks 
D)  greater; real; nominal GDP always stays the same 
E)  Not enough information is given. 
A)  smaller; nominal; real GDP shrinks 
B)  greater; nominal; real GDP shrinks 
C)  greater; real; nominal GDP shrinks 
D)  greater; real; nominal GDP always stays the same 
E)  Not enough information is given.

Question 16

The National Income and Product Accounts provides a system for aggregating the production of:

Accepted Answer

A)  all goods and services into a single measure of economic activity. 
B)  all goods into a single measure of economic activity. 
C)  all services into a single measure of economic activity. 
D)  most goods and services into a single measure of economic activity. 
E)  all goods and services into two measures of economic activity. 
A)  all goods and services into a single measure of economic activity. 
B)  all goods into a single measure of economic activity. 
C)  all services into a single measure of economic activity. 
D)  most goods and services into a single measure of economic activity. 
E)  all goods and services into two measures of economic activity.

Question 17

Using the expenditure approach, investment includes:

Accepted Answer

A)  household residential expenditures. 
B)  firm structures, equipment, and inventories. 
C)  fixed firm and household structures, equipment, and inventories. 
D)  government and firm equipment expenditures. 
E)  government defense and firm equipment expenditures. 
A)  household residential expenditures. 
B)  firm structures, equipment, and inventories. 
C)  fixed firm and household structures, equipment, and inventories. 
D)  government and firm equipment expenditures. 
E)  government defense and firm equipment expenditures.

Question 18

When the city of Los Angeles hires more police officers, ________ may rise, but it may be due to the ________ associated with crime.

Accepted Answer

A)  GDP; costs 
B)  revenues; costs 
C)  taxes; benefits 
D)  interest rates; costs 
E)  prices; costs 
A)  GDP; costs 
B)  revenues; costs 
C)  taxes; benefits 
D)  interest rates; costs 
E)  prices; costs

Question 19

Refer to the following table when answering the following questions.
Table 2.1: U.S. 2010 and 2015 Expenditures ($ billions)  
-Consider Table 2.1. The household's share of total investment in 2010 was about ________ percent, and in 2015 it was ________ percent.

Accepted Answer

A)  18; 21 
B)  97; 98 
C)  79; 81 
D)  4; 4 
E)  Not enough information is given. 
A)  18; 21 
B)  97; 98 
C)  79; 81 
D)  4; 4 
E)  Not enough information is given.

Question 20

You are a staff economist for your local bank and the bank manager claims that in 2014 the Chinese economy was bigger than that of the United States. To prove him wrong you decide to put your economics training to work for you and decide to show him China's GDP in U.S. dollars; to show him how smart you are, you also decide to calculate the real GDP of China in U.S. dollars and prices and compare that to the United States as well. You have the following data: in 2014, China's nominal GDP was CY 63.6 trillion (CY = Chinese yuan); the yuan-dollar exchange rate was CY 6.14/$1; nominal GDP in the United States was $17.3 trillion; the price level in the United States was 1.0 and the price level in China was 0.6. How big is China's economy?

Accepted Answer

The first part of the question is straig

According to the income approach to GDP, the largest portion of GDP is compensation to employees.

By how much does GDP change between 2014 and 2015 in the following scenario? In 2014, a rich woman has a chef and pays him $50,000 to cook for her. In 2015, she marries the chef and he continues to cook.

Net exports are also called:

If the percent change in prices is greater than the percent change in the nominal GDP, the real GDP rises.

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

When you buy a car from your brother, which he bought new in 2000, the purchase adds to current GDP.

An economy's is/are equal to its .

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

In 2015, investment expenditures accounted for about ________ percent of total GDP.

Nominal GDP is the of all goods and services produced in a period of time using prices.

Refer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios. Table 2.3: National Income Accounting -Consider Table 2.3. Using the Laspeyres index, the real GDP in 2018 is:

GDP measures the value of all economic activity.

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

What are the components that make up the income approach to calculating GDP? What are the components that make up the expenditure approach to calculating GDP?

If the percent change in the price level is than the percent change in GDP, .

The National Income and Product Accounts provides a system for aggregating the production of:

Using the expenditure approach, investment includes:

When the city of Los Angeles hires more police officers, may rise, but it may be due to the associated with crime.

Refer to the following table when answering the following questions. Table 2.1: U.S. 2010 and 2015 Expenditures ($ billions) -Consider Table 2.1. The household's share of total investment in 2010 was about percent, and in 2015 it was percent.

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

According to the income approach to GDP, the largest portion of GDP is compensation to employees.

By how much does GDP change between 2014 and 2015 in the following scenario? In 2014, a rich woman has a chef and pays him $50,000 to cook for her. In 2015, she marries the chef and he continues to cook.

Net exports are also called:

If the percent change in prices is greater than the percent change in the nominal GDP, the real GDP rises.

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

When you buy a car from your brother, which he bought new in 2000, the purchase adds to current GDP.

An economy's ________ is/are equal to its ________.

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

In 2015, investment expenditures accounted for about ________ percent of total GDP.

Nominal GDP is the ________ of all goods and services produced in a period of time using ________ prices.

Refer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios. Table 2.3: National Income Accounting -Consider Table 2.3. Using the Laspeyres index, the real GDP in 2018 is:

GDP measures the value of all economic activity.

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

What are the components that make up the income approach to calculating GDP? What are the components that make up the expenditure approach to calculating GDP?

If the percent change in the price level is ________ than the percent change in ________ GDP, ________.

The National Income and Product Accounts provides a system for aggregating the production of:

Using the expenditure approach, investment includes:

When the city of Los Angeles hires more police officers, ________ may rise, but it may be due to the ________ associated with crime.

Refer to the following table when answering the following questions. Table 2.1: U.S. 2010 and 2015 Expenditures ($ billions) -Consider Table 2.1. The household's share of total investment in 2010 was about ________ percent, and in 2015 it was ________ percent.

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

An economy's is/are equal to its .

Nominal GDP is the of all goods and services produced in a period of time using prices.

If the percent change in the price level is than the percent change in GDP, .

When the city of Los Angeles hires more police officers, may rise, but it may be due to the associated with crime.

Refer to the following table when answering the following questions. Table 2.1: U.S. 2010 and 2015 Expenditures ($ billions) -Consider Table 2.1. The household's share of total investment in 2010 was about percent, and in 2015 it was percent.