Question 1

"GDP as a measurement unit of economic well-being has a flaw which is removed by imputations." Explain with an example.

Accepted Answer

Homeowners basically provide themselves with housing services, but because those services are not being sold in the market place, they can't be counted in GDP (unlike rental property, where the rent paid by tenants is income to the landlord, and therefore shows up in GDP). To remove this accounting error in the GDP, such values are added as imputed value.

Question 2

The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers ______, while the establishment survey provides estimates of the number of workers ______.

Accepted Answer

A)  self-employed; unemployed 
B)  unemployed; self-employed 
C)  with jobs; on firms' payrolls 
D)  on firms' payrolls; with jobs 
A)  self-employed; unemployed 
B)  unemployed; self-employed 
C)  with jobs; on firms' payrolls 
D)  on firms' payrolls; with jobs C

Question 3

Nominal GDP means the value of goods and services is measured in ______ prices.

Accepted Answer

A)  current 
B)  real 
C)  constant 
D)  average 
A)  current 
B)  real 
C)  constant 
D)  average A

Question 4

In 2013 in the United States, the approximate amount of GDP (in current dollars) that was spent on consumption per person was:

Accepted Answer

A)  $36,400. 
B)  $53,100. 
C)  $8, 400. 
D)  $16,800. 
A)  $36,400. 
B)  $53,100. 
C)  $8, 400. 
D)  $16,800.

Question 5

The statistic used by economists to measure the value of economic output is:

Accepted Answer

A)  the CPI. 
B)  GDP. 
C)  the GDP deflator. 
D)  the unemployment rate. 
A)  the CPI. 
B)  GDP. 
C)  the GDP deflator. 
D)  the unemployment rate.

Question 6

According to the usual seasonal pattern of the U.S. economy, GDP is highest in the quarter of the year that includes:

Accepted Answer

A)  January, February, and March. 
B)  April, May, and June. 
C)  July, August, and September. 
D)  October, November, and December. 
A)  January, February, and March. 
B)  April, May, and June. 
C)  July, August, and September. 
D)  October, November, and December.

Question 7

Chain-weighted measures of real GDP make use of prices from:

Accepted Answer

A)  an unchanging base year. 
B)  a continuously changing base year. 
C)  a base year that is changed approximately every 5 years. 
D)  a base year that is changed approximately every 10 years. 
A)  an unchanging base year. 
B)  a continuously changing base year. 
C)  a base year that is changed approximately every 5 years. 
D)  a base year that is changed approximately every 10 years.

Question 8

If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and net exports are -$1,910, then government purchases are:

Accepted Answer

A)  $2,977. 
B)  $1,910. 
C)  -$843. 
D)  $1,067. 
A)  $2,977. 
B)  $1,910. 
C)  -$843. 
D)  $1,067.

Question 9

Assume an economy in which the value of the GDP deflator is 2 and the current inflation rate is 4 percent. Calculate the real and nominal interest rates.

Accepted Answer

Start with the following equations for t

Question 10

According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

Accepted Answer

A)  is going to school full time. 
B)  is temporarily absent from a job because of illness. 
C)  has been temporarily laid off. 
D)  is out of a job and looking for work during the previous four weeks. 
A)  is going to school full time. 
B)  is temporarily absent from a job because of illness. 
C)  has been temporarily laid off. 
D)  is out of a job and looking for work during the previous four weeks.

Question 11

An increase in the price of goods bought by firms and the government will show up in:

Accepted Answer

A)  the CPI but not in the GDP deflator. 
B)  the GDP deflator but not in the CPI. 
C)  both the CPI and the GDP deflator. 
D)  neither the CPI nor the GDP deflator. 
A)  the CPI but not in the GDP deflator. 
B)  the GDP deflator but not in the CPI. 
C)  both the CPI and the GDP deflator. 
D)  neither the CPI nor the GDP deflator.

Question 12

In 2013, the GDP of the United States totaled about:

Accepted Answer

A)  $16.8 billion. 
B)  $168 billion. 
C)  $16.8 trillion. 
D)  $168 trillion. 
A)  $16.8 billion. 
B)  $168 billion. 
C)  $16.8 trillion. 
D)  $168 trillion.

Question 13

To compute the value of GDP:

Accepted Answer

A)  goods and services are valued at market prices. 
B)  the sale of used goods is included. 
C)  production for inventory is not included. 
D)  goods and services are valued by weight. 
A)  goods and services are valued at market prices. 
B)  the sale of used goods is included. 
C)  production for inventory is not included. 
D)  goods and services are valued by weight.

Question 14

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Accepted Answer

Some possible, but not all, explanations

Question 15

The amount of capital in an economy is a ______ and the amount of investment is a ______.

Accepted Answer

A)  flow; stock 
B)  stock; flow 
C)  final good; intermediate good 
D)  intermediate good; final good 
A)  flow; stock 
B)  stock; flow 
C)  final good; intermediate good 
D)  intermediate good; final good

Question 16

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation,

Accepted Answer

A)  provides a real, rather than a nominal, rate of inflation. 
B)  gives a better measure of ongoing, sustained price changes. 
C)  is more consistent with measures of inflation used in other countries. 
D)  fluctuates more than measures of inflation that include food and energy prices. 
A)  provides a real, rather than a nominal, rate of inflation. 
B)  gives a better measure of ongoing, sustained price changes. 
C)  is more consistent with measures of inflation used in other countries. 
D)  fluctuates more than measures of inflation that include food and energy prices.

Question 17

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

Accepted Answer

A)  $10,000. 
B)  $12,000. 
C)  $20,000. 
D)  $22,000. 
A)  $10,000. 
B)  $12,000. 
C)  $20,000. 
D)  $22,000.

Question 18

The number of households interviewed in the monthly employment survey of the U.S. Bureau of Labor Statistics is approximately:

Accepted Answer

A)  6,000. 
B)  60,000. 
C)  600,000. 
D)  6 million. 
A)  6,000. 
B)  60,000. 
C)  600,000. 
D)  6 million.

Question 19

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

Accepted Answer

A)  $5. 
B)  $6.50. 
C)  $9.50. 
D)  $11. 
A)  $5. 
B)  $6.50. 
C)  $9.50. 
D)  $11.

Question 20

Explain why the value of GDP in 2012 would or would not change as a result of each transaction described below: a. In 2012 , the Smith family purchases a new house that was built in 2012 .
b. In 2012 , the Jones family purchases a house that was built in 2001 .
c. In 2012 , a construction company purchases windows to put in the Smith family home that was built in 2012 .
d. In 2012, Mr. Jones paints all of the rooms of the Jones family house purchased in 2009 , using paint and supplies purchased in 2012 .
e. In 2012, Mr. Smith uses an online brokerage service to purchases shares of stock in a construction company.

Accepted Answer

a. GDP in 2012 increases by the purchase

"GDP as a measurement unit of economic well-being has a flaw which is removed by imputations." Explain with an example.

The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers , while the establishment survey provides estimates of the number of workers .

Nominal GDP means the value of goods and services is measured in ______ prices.

In 2013 in the United States, the approximate amount of GDP (in current dollars) that was spent on consumption per person was:

The statistic used by economists to measure the value of economic output is:

According to the usual seasonal pattern of the U.S. economy, GDP is highest in the quarter of the year that includes:

Chain-weighted measures of real GDP make use of prices from:

If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and net exports are -$1,910, then government purchases are:

Assume an economy in which the value of the GDP deflator is 2 and the current inflation rate is 4 percent. Calculate the real and nominal interest rates.

According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

An increase in the price of goods bought by firms and the government will show up in:

In 2013, the GDP of the United States totaled about:

To compute the value of GDP:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

The amount of capital in an economy is a and the amount of investment is a .

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation,

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

The number of households interviewed in the monthly employment survey of the U.S. Bureau of Labor Statistics is approximately:

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

The Science of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labor Market

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

Filters

Exam 2: The Data of Macroeconomics

"GDP as a measurement unit of economic well-being has a flaw which is removed by imputations." Explain with an example.

The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers ______, while the establishment survey provides estimates of the number of workers ______.

Nominal GDP means the value of goods and services is measured in ______ prices.

In 2013 in the United States, the approximate amount of GDP (in current dollars) that was spent on consumption per person was:

The statistic used by economists to measure the value of economic output is:

According to the usual seasonal pattern of the U.S. economy, GDP is highest in the quarter of the year that includes:

Chain-weighted measures of real GDP make use of prices from:

If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and net exports are -$1,910, then government purchases are:

Assume an economy in which the value of the GDP deflator is 2 and the current inflation rate is 4 percent. Calculate the real and nominal interest rates.

According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

An increase in the price of goods bought by firms and the government will show up in:

In 2013, the GDP of the United States totaled about:

To compute the value of GDP:

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules). Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

The amount of capital in an economy is a ______ and the amount of investment is a ______.

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation,

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

The number of households interviewed in the monthly employment survey of the U.S. Bureau of Labor Statistics is approximately:

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

The Science of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labor Market

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

Filters

The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers , while the establishment survey provides estimates of the number of workers .

The amount of capital in an economy is a and the amount of investment is a .