Question 1

Consumer spending is spending by ________ households on final goods and services produced ________.

Accepted Answer

A) domestic; domestically and abroad 
B) domestic; domestically 
C) domestic and foreign; domestically and abroad 
D) domestic and foreign; domestically

Question 2

Capital goods are

Accepted Answer

A) a type of intermediate good. 
B) final goods, because they are not used up during a given year. 
C) produced in the same year as the related final good, whereas intermediate goods are produced in different years. 
D) produced in one year, whereas final goods are produced over a period of more than one year.

Question 3

The Federal Reserve focuses on the inflation rate based on the ________ rather than the CPI; to measure the underlying trend in inflation,it focuses on the ________.

Accepted Answer

A) GDP deflator; overall GDP deflator 
B) GDP deflator; core GDP deflator 
C) PCE price index; core PCE price index 
D) PCE price index; overall PCE price index

Question 4

Monica grows coconuts and catches fish.Last year she harvested 1500 coconuts and 600 fish.She values one fish as having a worth of three coconuts.She gave Rachel 300 coconuts and 100 fish for helping her to harvest coconuts and catch fish,all of which were consumed by Rachel.Monica consumed the remaining fish and coconuts.In terms of fish,total consumption by both Monica and Rachel would equal

Accepted Answer

A) 700 fish. 
B) 900 fish. 
C) 1100 fish. 
D) 2700 fish.

Question 5

Intermediate goods are

Accepted Answer

A) capital goods, which are used up in the production of other goods but were produced in earlier periods. 
B) final goods that remain in inventories. 
C) goods that are used up in the production of other goods in the same period that they were produced. 
D) either capital goods or inventories.

Question 6

If C = $400,I = $100,G = $50,NX = $30,and NFP = $5,how much is GDP?

Accepted Answer

A) $580 
B) $575 
C) $585 
D) $550

Question 7

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon. 
Between Year 1 and Year 2,nominal GDP grew by

Accepted Answer

A) 60.0%. 
B) 65.5%. 
C) 83.3%. 
D) 190.0%.

Question 8

The fundamental identity of national income accounting is

Accepted Answer

A) total production = total income - total expenditure. 
B) total production = total income + total expenditure. 
C) total production = total income = total expenditure. 
D) total production = total income/total expenditure.

Question 9

If the nominal interest rate on a one-year loan was 7%,the actual inflation rate over the year was 3% and the expected inflation rate over the year was 2.5%,then the expected real interest rate equals

Accepted Answer

A) 4)5%. 
B) 4)0%. 
C) 3)75%. 
D) 3)5%.

Question 10

If real GDP for 2009 is $6400 billion and nominal GDP for 2010 is $6720 billion (in 2010 dollars),then the growth rate of real GDP is

Accepted Answer

A) 0%. 
B) 0)5%. 
C) 5%. 
D) unknown based on the given information.

Exam 2: The Measurement and Structure of the National Economy

Consumer spending is spending by households on final goods and services produced .

Capital goods are

The Federal Reserve focuses on the inflation rate based on the rather than the CPI; to measure the underlying trend in inflation,it focuses on the .

Intermediate goods are

If C = $400,I = $100,G = $50,NX = $30,and NFP = $5,how much is GDP?

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2,nominal GDP grew by

The fundamental identity of national income accounting is

If the nominal interest rate on a one-year loan was 7%,the actual inflation rate over the year was 3% and the expected inflation rate over the year was 2.5%,then the expected real interest rate equals

If real GDP for 2009 is $6400 billion and nominal GDP for 2010 is $6720 billion (in 2010 dollars) ,then the growth rate of real GDP is