Question 1

-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 goods consumption as we do on services 
B)  consumption of durable goods is twice that of nondurables 
C)  government purchases is the largest main component of GDP 
D)  all of the above 
E)  none of the above 
A)  we spend twice as much on goods consumption as we do on services 
B)  consumption of durable goods is twice that of nondurables 
C)  government purchases is the largest main component of GDP 
D)  all of the above 
E)  none of the above

Question 2

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

Accepted Answer

A)  China has the highest share of investment among the eight countries 
B)  India has the smallest government share of output 
C)  the U.S. is the largest consumer as a share of GDP 
D)  all of the above 
E)  none of the above 
A)  China has the highest share of investment among the eight countries 
B)  India has the smallest government share of output 
C)  the U.S. is the largest consumer as a share of GDP 
D)  all of the above 
E)  none of the above

Question 3

The difference between inventories and inventory investment is that typically ________.

Accepted Answer

A)  the first one is a stock of unfinished or unsold goods; the second one is a flow that indicates productive activity 
B)  the first one denotes the change in holdings of capital; the second one includes most final goods 
C)  the first one is measured at the beginning of the year; the second one is measured at the end of the year 
D)  all of the above 
E)  none of the above 
A)  the first one is a stock of unfinished or unsold goods; the second one is a flow that indicates productive activity 
B)  the first one denotes the change in holdings of capital; the second one includes most final goods 
C)  the first one is measured at the beginning of the year; the second one is measured at the end of the year 
D)  all of the above 
E)  none of the above

Question 4

Computing the CPI is important because ________.

Accepted Answer

A)  it is a very accurate and error-free measure of the cost of living 
B)  it helps predict spending patterns for particular goods and services 
C)  government uses it to index entitlements, such as social security benefits, so that beneficiaries do not lose purchasing power in periods of inflation 
D)  all of the above 
E)  none of the above 
A)  it is a very accurate and error-free measure of the cost of living 
B)  it helps predict spending patterns for particular goods and services 
C)  government uses it to index entitlements, such as social security benefits, so that beneficiaries do not lose purchasing power in periods of inflation 
D)  all of the above 
E)  none of the above

Question 5

Which component of employee compensation has grown most rapidly in recent decades?

Accepted Answer

A)  net interest income 
B)  benefits 
C)  transfer payments 
D)  wages and salaries 
E)  net factor income 
A)  net interest income 
B)  benefits 
C)  transfer payments 
D)  wages and salaries 
E)  net factor income

Question 6

If a large number of people were to leave their civilian jobs in order to join the military, which of the following would increase?

Accepted Answer

A)  the civilian labor force 
B)  the civilian employment ratio 
C)  the civilian unemployment rate 
D)  the civilian labor-force participation rate 
E)  none of the above 
A)  the civilian labor force 
B)  the civilian employment ratio 
C)  the civilian unemployment rate 
D)  the civilian labor-force participation rate 
E)  none of the above

Question 7

Which of the following is included in net government income?

Accepted Answer

A)  social security benefits 
B)  factor income 
C)  taxes 
D)  all of the above 
E)  none of the above 
A)  social security benefits 
B)  factor income 
C)  taxes 
D)  all of the above 
E)  none of the above

Question 8

The Federal Funds Rate is ________.

Accepted Answer

A)  the rate charged on overnight loans of deposits (held by the Federal Reserve) between banks 
B)  the rate charged on corporate bank loans to healthy "prime" borrowers 
C)  the rate charged on U.S. Treasury bonds by the Federal Reserve 
D)  the rate charged on U.S securities with maturities of less than a year 
E)  none of the above 
A)  the rate charged on overnight loans of deposits (held by the Federal Reserve) between banks 
B)  the rate charged on corporate bank loans to healthy "prime" borrowers 
C)  the rate charged on U.S. Treasury bonds by the Federal Reserve 
D)  the rate charged on U.S securities with maturities of less than a year 
E)  none of the above

Question 9

Which of these represents an example of citizens who would not typically be counted as unemployed?

Accepted Answer

A)  when your economics professor loses his job and gets a new one at McDonald's 
B)  when your fourteen-year-old cousin loses her summer job in September 
C)  when your neighbor has been out of work for so long that he decides to stay at home and write a novel 
D)  all of the above 
E)  none of the above 
A)  when your economics professor loses his job and gets a new one at McDonald's 
B)  when your fourteen-year-old cousin loses her summer job in September 
C)  when your neighbor has been out of work for so long that he decides to stay at home and write a novel 
D)  all of the above 
E)  none of the above

Question 10

Which government entity calculates GDP in the United States on a quarterly basis?

Accepted Answer

A)  the Treasury Department 
B)  the Commerce Department 
C)  the Federal Reserve 
D)  all of the above 
E)  none of the above 
A)  the Treasury Department 
B)  the Commerce Department 
C)  the Federal Reserve 
D)  all of the above 
E)  none of the above

Question 11

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 three is ________.

Accepted Answer

A)  165 
B)  139.8 
C)  85.8 
D)  133.6 
E)  114.6 
A)  165 
B)  139.8 
C)  85.8 
D)  133.6 
E)  114.6

Question 12

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

Accepted Answer

A)  Investment is smoother than most of the other components of GDP, especially consumption. 
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 surplus which has trended upward to over 5% of GDP. 
D)  all of the above 
E)  none of the above 
A)  Investment is smoother than most of the other components of GDP, especially consumption. 
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 surplus which has trended upward to over 5% of GDP. 
D)  all of the above 
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 nominal GDP in year two, is ________.

Accepted Answer

A)  8250 
B)  5000 
C)  7200 
D)  7500 
E)  none of the above 
A)  8250 
B)  5000 
C)  7200 
D)  7500 
E)  none of the above

Question 14

The income approach to measuring GDP involves adding up the following ________.

Accepted Answer

A)  household income and income generated by firms 
B)  private spending, tax revenues and government spending 
C)  transfer payments and income taxes 
D)  interest income, profits and social security benefits 
E)  wages, benefits and interest income 
A)  household income and income generated by firms 
B)  private spending, tax revenues and government spending 
C)  transfer payments and income taxes 
D)  interest income, profits and social security benefits 
E)  wages, benefits and interest income

Question 15

Examples of deflators are the ________ and ________ deflator

Accepted Answer

A)  real; nominal 
B)  private disposable income; gross national product 
C)  personal consumption expenditure; rental income 
D)  gross domestic product; private disposable income 
E)  none of the above 
A)  real; nominal 
B)  private disposable income; gross national product 
C)  personal consumption expenditure; rental income 
D)  gross domestic product; private disposable income 
E)  none of the above

Question 16

Subtraction of ________ from Gross National Product yields Gross Domestic Product.

Accepted Answer

A)  net factor income 
B)  depreciation 
C)  factor income to the rest of the world 
D)  net government income 
E)  none of the above 
A)  net factor income 
B)  depreciation 
C)  factor income to the rest of the world 
D)  net government income 
E)  none of the above

Question 17

In 1995, the Boskin commission identified the following problem(s) with the computation of the CPI

Accepted Answer

A)  it does not account for the fact that consumers can substitute away from products as they get more expensive 
B)  an increase in price could be the result of quality improvements rather than an increase in the cost of living 
C)  it often does not reflect decreases in the cost of living that occur when new goods are introduced 
D)  all of the above 
E)  none of the above 
A)  it does not account for the fact that consumers can substitute away from products as they get more expensive 
B)  an increase in price could be the result of quality improvements rather than an increase in the cost of living 
C)  it often does not reflect decreases in the cost of living that occur when new goods are introduced 
D)  all of the above 
E)  none of the above

Question 18

Figure 2.5  
-According to Figure 2.5, the United States civilian unemployment 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 19

According to the fundamental identity of national income accounting, income and output are identical. Why, then, is national income not equal to GDP?

Accepted Answer

National income is net of depreciation,

Question 20

In a two-good economy, the price of video games is $40 and the price of energy drinks is $2. If the annual output of this economy is 100 video games and 500 drinks, the GDP is ________.

Accepted Answer

A)  $50,080 
B)  $25,200 
C)  $5,000 
D)  $20,200 
E)  none of the above 
A)  $50,080 
B)  $25,200 
C)  $5,000 
D)  $20,200 
E)  none of the above

Exam 2: Measuring Macroeconomic Data

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

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

The difference between inventories and inventory investment is that typically ________.

Computing the CPI is important because ________.

Which component of employee compensation has grown most rapidly in recent decades?

If a large number of people were to leave their civilian jobs in order to join the military, which of the following would increase?

Which of the following is included in net government income?

The Federal Funds Rate is ________.

Which of these represents an example of citizens who would not typically be counted as unemployed?

Which government entity calculates GDP in the United States on a quarterly basis?

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 three is ________.

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

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

The income approach to measuring GDP involves adding up the following ________.

Examples of deflators are the ________ and ________ deflator

Subtraction of ________ from Gross National Product yields Gross Domestic Product.

In 1995, the Boskin commission identified the following problem(s) with the computation of the CPI

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

According to the fundamental identity of national income accounting, income and output are identical. Why, then, is national income not equal to GDP?

In a two-good economy, the price of video games is $40 and the price of energy drinks is $2. If the annual output of this economy is 100 video games and 500 drinks, the GDP is ________.

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

Examples of deflators are the and deflator