Question 1

Variables measured at current market prices are nominal, rather than real. In what sense are nominal variables unreal?

Accepted Answer

Nominal variables combine a thing being

Question 2

A discouraged worker might ________.

Accepted Answer

A)  be counted as unemployed 
B)  have tried to find a job during the month prior to the household survey, but without success 
C)  have been prevented from working during the week prior to the household survey, due to illness or other temporary circumstances 
D)  be waiting to return to a job from which he or she has been laid off 
E)  none of the above 
A)  be counted as unemployed 
B)  have tried to find a job during the month prior to the household survey, but without success 
C)  have been prevented from working during the week prior to the household survey, due to illness or other temporary circumstances 
D)  be waiting to return to a job from which he or she has been laid off 
E)  none of the above

Question 3

An example of a nominal variable is ________.

Accepted Answer

A)  income measured at current market prices 
B)  expenditures in terms of the quantities of actual goods 
C)  the chain weighted measure of GDP 
D)  all of the above 
E)  none of the above 
A)  income measured at current market prices 
B)  expenditures in terms of the quantities of actual goods 
C)  the chain weighted measure of GDP 
D)  all of the above 
E)  none of the above

Question 4

Describe how the investment component of GDP is distinct from the other components.

Accepted Answer

Investment is distinct from consumption

Question 5

Figure 2.5  
-According to Figure 2.5, the United States civilian labor force participation rate in April 2010 was ________.

Accepted Answer

A)  6.4% 
B)  18.5% 
C)  9.9% 
D)  65.2% 
E)  none of the above 
A)  6.4% 
B)  18.5% 
C)  9.9% 
D)  65.2% 
E)  none of the above

Question 6

The Bureau of Labor Statistics (BLS) calculates the PCE deflator ________.

Accepted Answer

A)  every month 
B)  every two months 
C)  every three months 
D)  every year 
E)  twice each month 
A)  every month 
B)  every two months 
C)  every three months 
D)  every year 
E)  twice each month

Question 7

The Bureau of Labor Statistics (BLS) reports the CPI ________.

Accepted Answer

A)  every month 
B)  every two months 
C)  every three months 
D)  every year 
E)  twice each month 
A)  every month 
B)  every two months 
C)  every three months 
D)  every year 
E)  twice each month

Question 8

In relatively poor economies, modest expenditures on public health (immunization of children) can produce large improvements. What does this imply about the accuracy of the growth rate of real GDP as a measure of national well-being? How is the situation different in rich economies?

Accepted Answer

Expenditures on public health are includ

Question 9

The Fisher equation implies ________.

Accepted Answer

A)  the nominal interest rate equals the real rate of inflation plus expected inflation 
B)  the real interest rate equals expected inflation 
C)  expected inflation equals current inflation 
D)  the growth rate of inflation equals the real minus the nominal rates of interest 
E)  none of the above 
A)  the nominal interest rate equals the real rate of inflation plus expected inflation 
B)  the real interest rate equals expected inflation 
C)  expected inflation equals current inflation 
D)  the growth rate of inflation equals the real minus the nominal rates of interest 
E)  none of the above

Question 10

The inflation rate can be obtained by ________.

Accepted Answer

A)  dividing the nominal GDP by the GDP deflator 
B)  subtracting the real GDP from the nominal GDP 
C)  multiplying the CPI by GDP 
D)  subtracting the growth in real GDP from the growth in nominal GDP 
E)  none of the above 
A)  dividing the nominal GDP by the GDP deflator 
B)  subtracting the real GDP from the nominal GDP 
C)  multiplying the CPI by GDP 
D)  subtracting the growth in real GDP from the growth in nominal GDP 
E)  none of the above

Question 11

The most frequently reported price index is ________.

Accepted Answer

A)  the consumer price index (CPI) 
B)  the gross domestic product (GDP) deflator 
C)  the personal consumption expenditure (PC
E)  deflator 
D)  chain weighted GDP 
E)  the interest income deflator 
A)  the consumer price index (CPI) 
B)  the gross domestic product (GDP) deflator 
C)  the personal consumption expenditure (PC
E)  deflator 
D)  chain weighted GDP 
E)  the interest income deflator

Question 12

Which is the largest category of income in the United States?

Accepted Answer

A)  self-employment income 
B)  corporate profits 
C)  employee compensation 
D)  net interest income 
E)  none of the above 
A)  self-employment income 
B)  corporate profits 
C)  employee compensation 
D)  net interest income 
E)  none of the above

Question 13

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

Accepted Answer

A)  95.5 
B)  123.5 
C)  118 
D)  104.7 
E)  116.6 
A)  95.5 
B)  123.5 
C)  118 
D)  104.7 
E)  116.6

Question 14

Which of the following is a good indicator of short-term interest rates in international markets?

Accepted Answer

A)  prime rate 
B)  Treasury bill rate 
C)  LIBOR 
D)  Federal funds rate 
E)  none of the above 
A)  prime rate 
B)  Treasury bill rate 
C)  LIBOR 
D)  Federal funds rate 
E)  none of the above

Question 15

Net national product + ________=________.

Accepted Answer

A)  net interest; gross domestic product 
B)  depreciation; gross national product 
C)  depreciation; private disposable income 
D)  private disposable income; gross national product 
E)  none of the above 
A)  net interest; gross domestic product 
B)  depreciation; gross national product 
C)  depreciation; private disposable income 
D)  private disposable income; gross national product 
E)  none of the above

Question 16

Which of the following is a valid characteristic of the U.S. economy over the last sixty years?

Accepted Answer

A)  Investment is more volatile than other components of GDP. 
B)  Government spending has remained around 20% of GDP over much of the postwar period. 
C)  The U.S. has, for the most part, been running a trade deficit which has trended upward to over 5% of GDP. 
D)  all of the above 
E)  none of the above 
A)  Investment is more volatile than other components of GDP. 
B)  Government spending has remained around 20% of GDP over much of the postwar period. 
C)  The U.S. has, for the most part, been running a trade deficit which has trended upward to over 5% of GDP. 
D)  all of the above 
E)  none of the above

Question 17

An international comparison of eight major industrialized countries reveals the following about the components of GDP: ________.

Accepted Answer

A)  the U.S. has one of the largest shares of GDP going to investment 
B)  the U.S. has one of the smallest government share of GDP 
C)  the U.S. runs one of the largest trade deficits 
D)  all of the above 
E)  none of the above 
A)  the U.S. has one of the largest shares of GDP going to investment 
B)  the U.S. has one of the smallest government share of GDP 
C)  the U.S. runs one of the largest trade deficits 
D)  all of the above 
E)  none of the above

Question 18

The total income earned by residents of an economy is known as

Accepted Answer

A)  private disposable income 
B)  gross national product 
C)  gross domestic product 
D)  national income 
E)  none of the above 
A)  private disposable income 
B)  gross national product 
C)  gross domestic product 
D)  national income 
E)  none of the above

Question 19

-Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________.

Accepted Answer

A)  we spend twice as much on services as we do on goods consumption 
B)  consumption of nondurable goods is twice that of durables 
C)  private investment is the smallest of the main domestic components of GDP 
D)  all of the above 
E)  none of the above 
A)  we spend twice as much on services as we do on goods consumption 
B)  consumption of nondurable goods is twice that of durables 
C)  private investment is the smallest of the main domestic components of GDP 
D)  all of the above 
E)  none of the above

Question 20

In the 1970s, nominal interest rates in the United States were quite high, while real rates were extremely low. Which group "wins" in this circumstance, lenders or borrowers? What might explain the willingness of the "losers" to accept disadvantageous loan terms?

Accepted Answer

Borrowers "win" when the real interest r

Exam 2: Measuring Macroeconomic Data

Variables measured at current market prices are nominal, rather than real. In what sense are nominal variables unreal?

A discouraged worker might ________.

An example of a nominal variable is ________.

Describe how the investment component of GDP is distinct from the other components.

Figure 2.5 -According to Figure 2.5, the United States civilian labor force participation rate in April 2010 was ________.

The Bureau of Labor Statistics (BLS) calculates the PCE deflator ________.

The Bureau of Labor Statistics (BLS) reports the CPI ________.

In relatively poor economies, modest expenditures on public health (immunization of children) can produce large improvements. What does this imply about the accuracy of the growth rate of real GDP as a measure of national well-being? How is the situation different in rich economies?

The Fisher equation implies ________.

The inflation rate can be obtained by ________.

The most frequently reported price index is ________.

Which is the largest category of income in the United States?

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

Which of the following is a good indicator of short-term interest rates in international markets?

Net national product + ________=________.

Which of the following is a valid characteristic of the U.S. economy over the last sixty years?

An international comparison of eight major industrialized countries reveals the following about the components of GDP: ________.

The total income earned by residents of an economy is known as

-Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________.

In the 1970s, nominal interest rates in the United States were quite high, while real rates were extremely low. Which group "wins" in this circumstance, lenders or borrowers? What might explain the willingness of the "losers" to accept disadvantageous loan terms?

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

Net national product + =.