Question 1

Over the past half-century, government transfer payments have increased. As a result ________.

Accepted Answer

A)  interest payments on government debt have declined 
B)  government expenditures have become a larger portion of GDP 
C)  the volatility of investment expenditures has declined 
D)  net exports have been positive in most years 
E)  none of the above 
A)  interest payments on government debt have declined 
B)  government expenditures have become a larger portion of GDP 
C)  the volatility of investment expenditures has declined 
D)  net exports have been positive in most years 
E)  none of the above

Question 2

The unemployment rate that is typically reported in the media is ________.

Accepted Answer

A)  based on a survey from 150,000 business establishments on weekly earnings, number of workers and hours worked 
B)  reported on a monthly basis by the Bureau of Labor Statistics (BLS) 
C)  based on a survey of 150,000 households 
D)  reported by the Federal Reserve 
E)  none of the above 
A)  based on a survey from 150,000 business establishments on weekly earnings, number of workers and hours worked 
B)  reported on a monthly basis by the Bureau of Labor Statistics (BLS) 
C)  based on a survey of 150,000 households 
D)  reported by the Federal Reserve 
E)  none of the above

Question 3

Assume that a high proportion of recent college graduates decides to stay in school seeking advanced degrees, rather than confront the challenge of landing a good job in the midst of generally high unemployment. What is the direct impact of this behavior on (a) the labor force participation rate, (b) the employment ratio, and (c) the unemployment rate?

Accepted Answer

The decision to stay in school makes the

Question 4

State the fundamental identity of national income accounting. Why is it not possible for this identity to be violated?

Accepted Answer

Total production = Total expenditure = T

Question 5

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

Accepted Answer

A)  the establishment survey counts a worker who holds two jobs twice and the household survey does not 
B)  the establishment survey only counts employees of a company and the household survey also counts the self employed 
C)  the establishment survey covers more workers than the household survey 
D)  all of the above 
E)  none of the above 
A)  the establishment survey counts a worker who holds two jobs twice and the household survey does not 
B)  the establishment survey only counts employees of a company and the household survey also counts the self employed 
C)  the establishment survey covers more workers than the household survey 
D)  all of the above 
E)  none of the above

Question 6

A few economies have the interesting characteristic that exports are more than 100 percent of the economy's GDP. How is this possible?

Accepted Answer

An economy's exports and imports can var

Question 7

Real GDP =________ where the price level is the ________.

Accepted Answer

A)  Nominal GDP × Price level; GDP deflator 
B)  Nominal GDP ÷ Price level; GDP deflator 
C)  Nominal GDP ÷ Price level; CPI 
D)  Nominal GDP × Price level; CPI 
E)  none of the above 
A)  Nominal GDP × Price level; GDP deflator 
B)  Nominal GDP ÷ Price level; GDP deflator 
C)  Nominal GDP ÷ Price level; CPI 
D)  Nominal GDP × Price level; CPI 
E)  none of the above

Question 8

An increase in the actual rate of inflation is most likely to cause a decrease in ________.

Accepted Answer

A)  the ex post real interest rate 
B)  the ex ante real interest rate 
C)  the nominal interest rate 
D)  the expected real interest rate 
E)  none of the above 
A)  the ex post real interest rate 
B)  the ex ante real interest rate 
C)  the nominal interest rate 
D)  the expected real interest rate 
E)  none of the above

Question 9

Which of the following will be counted as an expenditure in the measurement of GDP? (Assume that none of the transactions is concealed from the relevant authorities.)

Accepted Answer

A)  the value of a used automobile that remains unsold on the dealer's lot 
B)  purchase of a lamp at a neighborhood garage sale 
C)  purchase, using foodstamps, of a loaf of bread 
D)  payment by a parent to her child for doing household laundry 
E)  purchase of flour by a bakery 
A)  the value of a used automobile that remains unsold on the dealer's lot 
B)  purchase of a lamp at a neighborhood garage sale 
C)  purchase, using foodstamps, of a loaf of bread 
D)  payment by a parent to her child for doing household laundry 
E)  purchase of flour by a bakery

Question 10

Which of the following will be counted as an investment expenditure in the measurement of GDP?

Accepted Answer

A)  purchase of a tractor by a farmer from his neighbor 
B)  purchase of preferred stock in ABC Corporation 
C)  purchase of a newly built tractor by a college fraternity for hay rides at their charity fair 
D)  purchase of an apartment in a newly-built building 
E)  purchase of newly built computers by a municipal government 
A)  purchase of a tractor by a farmer from his neighbor 
B)  purchase of preferred stock in ABC Corporation 
C)  purchase of a newly built tractor by a college fraternity for hay rides at their charity fair 
D)  purchase of an apartment in a newly-built building 
E)  purchase of newly built computers by a municipal government

Question 11

Examples of deflators are the ________ and ________ deflator

Accepted Answer

A)  real; nominal 
B)  private disposable income; gross national product 
C)  personal consumption expenditure; gross domestic product 
D)  gross domestic product; rental income 
E)  private disposable income; personal consumption expenditure 
A)  real; nominal 
B)  private disposable income; gross national product 
C)  personal consumption expenditure; gross domestic product 
D)  gross domestic product; rental income 
E)  private disposable income; personal consumption expenditure

Question 12

A small business owner has a line of credit from a bank with a nominal interest rate of seven percent. For several years, the price level has been rising at an annual rate of two percent, but the owner has just read in the newspaper that economists expect next year's inflation rate to be four percent or more. Assume that this owner may either continue the line of credit at seven percent, or renegotiate to alter both the size of the credit and the interest rate. What reason might there be for the owner to keep the credit terms as is? What argument might justify changing the credit agreement?

Accepted Answer

The expected increase in the inflation r

Question 13

Private disposable income equals GDP ________.

Accepted Answer

A)  minus corporate profits and net factor income 
B)  plus transfer payments and net exports 
C)  plus depreciation, transfer payments, and interest payments on government debt 
D)  plus net factor income minus net government income 
E)  none of the above 
A)  minus corporate profits and net factor income 
B)  plus transfer payments and net exports 
C)  plus depreciation, transfer payments, and interest payments on government debt 
D)  plus net factor income minus net government income 
E)  none of the above

Question 14

If C is consumption, I is investment, G is government purchases and NX is net exports, according to the expenditure approach, Y would stand for ________; and the national income identity could be written as ________.

Accepted Answer

A)  transfers; Y = C + I + G - NX 
B)  CPI; Y = C + I + G + NX 
C)  GDP; Y - C - I = G + NX 
D)  income; Y = C - I - G + NX 
E)  the real interest rate; Y = C + I + G + NX 
A)  transfers; Y = C + I + G - NX 
B)  CPI; Y = C + I + G + NX 
C)  GDP; Y - C - I = G + NX 
D)  income; Y = C - I - G + NX 
E)  the real interest rate; Y = C + I + G + NX

Question 15

The unemployment rate is computed by ________.

Accepted Answer

A)  dividing labor force by the adult population 
B)  dividing the number of unemployed by the adult population 
C)  multiplying the employment ratio by the adult population 
D)  dividing the labor force by the number of unemployed 
E)  none of the above 
A)  dividing labor force by the adult population 
B)  dividing the number of unemployed by the adult population 
C)  multiplying the employment ratio by the adult population 
D)  dividing the labor force by the number of unemployed 
E)  none of the above

Question 16

Which of the following is typically not counted in GDP?

Accepted Answer

A)  any nonmarket good and services 
B)  income generated from apartment rentals 
C)  illegal drug sales 
D)  all of the above 
E)  none of the above 
A)  any nonmarket good and services 
B)  income generated from apartment rentals 
C)  illegal drug sales 
D)  all of the above 
E)  none of the above

Question 17

Real and Nominal GDP
  
-Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year two, is ________.

Accepted Answer

A)  5000 
B)  5250 
C)  5900 
D)  6175 
E)  none of the above 
A)  5000 
B)  5250 
C)  5900 
D)  6175 
E)  none of the above

Question 18

The nominal interest rate ________.

Accepted Answer

A)  makes no allowance for inflation 
B)  is a percentage of the amount borrowed 
C)  is the rate that most banks advertise 
D)  all of the above 
E)  none of the above 
A)  makes no allowance for inflation 
B)  is a percentage of the amount borrowed 
C)  is the rate that most banks advertise 
D)  all of the above 
E)  none of the above

Question 19

Real and Nominal GDP
  
-Based on the table "Real and Nominal GDP," if year three is the base year, then the real GDP in year two is ________.

Accepted Answer

A)  8250 
B)  5900 
C)  7500 
D)  6775 
E)  none of the above 
A)  8250 
B)  5900 
C)  7500 
D)  6775 
E)  none of the above

Question 20

The fundamental identity of national income accounting implies ________.

Accepted Answer

A)  Expenditure = Production + Income 
B)  Expenditure = Production = Income 
C)  Income =Expenditure - Production 
D)  Income =Expenditure/ Production 
E)  None of the above 
A)  Expenditure = Production + Income 
B)  Expenditure = Production = Income 
C)  Income =Expenditure - Production 
D)  Income =Expenditure/ Production 
E)  None of the above

Over the past half-century, government transfer payments have increased. As a result ________.

The unemployment rate that is typically reported in the media is ________.

State the fundamental identity of national income accounting. Why is it not possible for this identity to be violated?

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

A few economies have the interesting characteristic that exports are more than 100 percent of the economy's GDP. How is this possible?

Real GDP = where the price level is the .

An increase in the actual rate of inflation is most likely to cause a decrease in ________.

Which of the following will be counted as an expenditure in the measurement of GDP? (Assume that none of the transactions is concealed from the relevant authorities.)

Which of the following will be counted as an investment expenditure in the measurement of GDP?

Examples of deflators are the and deflator

Private disposable income equals GDP ________.

If C is consumption, I is investment, G is government purchases and NX is net exports, according to the expenditure approach, Y would stand for ; and the national income identity could be written as .

The unemployment rate is computed by ________.

Which of the following is typically not counted in GDP?

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year two, is ________.

The nominal interest rate ________.

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year three is the base year, then the real GDP in year two is ________.

The fundamental identity of national income accounting implies ________.

The Policy and Practice of Macroeconomics

Aggregate Production and Productivity

Saving and Investment in Closed and Open Economies

Money and Inflation

The Sources of Growth and the Solow Model

Drivers of Growth: Technology, Policy, and Institutions

Business Cycles: an Introduction

The Is Curve

Monetary Policy and Aggregate Demand

Aggregate Supply and the Phillips Curve

The Aggregate Demand and Supply Model

Macroeconomic Policy and Aggregate Demand and Supply Analysis

The Financial System and Economic Growth

Financial Crises and the Economy

Fiscal Policy and the Government Budget

Exchange Rates and International Economic Policy

Consumption and Saving

Investment

The Labor Market, Employment, and Unemployment

The Role of Expectations in Macroeconomic Policy

Modern Business Cycle Theory

Filters

Exam 2: Measuring Macroeconomic Data

Over the past half-century, government transfer payments have increased. As a result ________.

The unemployment rate that is typically reported in the media is ________.

State the fundamental identity of national income accounting. Why is it not possible for this identity to be violated?

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

A few economies have the interesting characteristic that exports are more than 100 percent of the economy's GDP. How is this possible?

Real GDP =________ where the price level is the ________.

An increase in the actual rate of inflation is most likely to cause a decrease in ________.

Which of the following will be counted as an expenditure in the measurement of GDP? (Assume that none of the transactions is concealed from the relevant authorities.)

Which of the following will be counted as an investment expenditure in the measurement of GDP?

Examples of deflators are the ________ and ________ deflator

Private disposable income equals GDP ________.

If C is consumption, I is investment, G is government purchases and NX is net exports, according to the expenditure approach, Y would stand for ________; and the national income identity could be written as ________.

The unemployment rate is computed by ________.

Which of the following is typically not counted in GDP?

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year two, is ________.

The nominal interest rate ________.

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year three is the base year, then the real GDP in year two is ________.

The fundamental identity of national income accounting implies ________.

The Policy and Practice of Macroeconomics

Aggregate Production and Productivity

Saving and Investment in Closed and Open Economies

Money and Inflation

The Sources of Growth and the Solow Model

Drivers of Growth: Technology, Policy, and Institutions

Business Cycles: an Introduction

The Is Curve

Monetary Policy and Aggregate Demand

Aggregate Supply and the Phillips Curve

The Aggregate Demand and Supply Model

Macroeconomic Policy and Aggregate Demand and Supply Analysis

The Financial System and Economic Growth

Financial Crises and the Economy

Fiscal Policy and the Government Budget

Exchange Rates and International Economic Policy

Consumption and Saving

Investment

The Labor Market, Employment, and Unemployment

The Role of Expectations in Macroeconomic Policy

Modern Business Cycle Theory

Filters

Real GDP = where the price level is the .

Examples of deflators are the and deflator

If C is consumption, I is investment, G is government purchases and NX is net exports, according to the expenditure approach, Y would stand for ; and the national income identity could be written as .