Question 1

A student had the following expenditures last month: rent-$500,food expense-$200,cost of a used textbook from the bookstore-$50,cost of new shoes-$100,and cost of gas for the car-$100.Which of these items are included in GDP?

Accepted Answer

The answer of A student had the following expenditures last...

Question 2

To evaluate the change in average living standards over time,it is best to use:

Accepted Answer

A)  the inflation rate. 
B)  GDP. 
C)  GDP per capita. 
D)  real GDP per capita. 
E)  real GDP.

Question 3

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions:
 
-Which of the following is a service?

Accepted Answer

A)  a visit to your local beach 
B)  a visit to your doctor 
C)  a trip to the store to buy a T-shirt 
D)  a trip to your favorite restaurant for dinner 
E)  having to write a check to pay your taxes

Question 4

The business cycle measures:

Accepted Answer

A)  fluctuations in the long-run trend growth rate of GDP. 
B)  fluctuations in the profit of businesses. 
C)  fluctuations in consumption. 
D)  short-run fluctuations in economic activity. 
E)  fluctuations in the average tax rate paid by businesses.

Question 5

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.
 
-Real GDP increases if:

Accepted Answer

A)  current prices increase. 
B)  current quantities increase. 
C)  current prices are constant. 
D)  nominal GDP increases. 
E)  nominal GDP decreases.

Question 6

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next six questions: Assume that the base year is 2012.
 
-What was the GDP deflator in 2013?

Accepted Answer

A)  116.67 
B)  108.57 
C)  100 
D)  119.44 
E)  102.38

Question 7

Does the value of cleaning your house count toward the value of GDP?

Accepted Answer

A)  Yes, this value counts in GDP. 
B)  No, cleaning your house is not a market activity. 
C)  Yes, if you pay a person or company to clean your house. 
D)  No, because people who clean houses for a living do not pay taxes. 
E)  No, this is a leisure activity.

Question 8

Consider the following data, where GDP values are measured in millions of dollars, to answer the next seven questions:
 
-What is the value of real GDP in 2010? Round to the nearest second decimal.

Accepted Answer

A)  $58,427.20 million 
B)  $584.27 million 
C)  $520.00 million 
D)  $445.20 million 
E)  $657.20 million

Question 9

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.
 
-Real GDP is equal to:

Accepted Answer

A)  current prices * base year output. 
B)  current prices * current output. 
C)  base year prices * base year output. 
D)  base year prices * current output. 
E)  current output 2 base year prices.

Question 10

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.
 
-Assuming the price level increased,real GDP is greater than nominal GDP if the current year is ________ the base year,and real GDP is less than nominal GDP if the current year is ________ the base year.

Accepted Answer

A)  before; before 
B)  before; after 
C)  after; after 
D)  after; before 
E)  equal to; equal to

Question 11

Company X sells paper to company Y for $100,000.Company Y uses the paper to make textbooks,selling them to consumers for $500,000.The total contribution to GDP is:

Accepted Answer

A)  $500,000. 
B)  $400,000. 
C)  $600,000. 
D)  $550,000. 
E)  $450,000.

Question 12

Explain why intermediate goods and used goods do not count in GDP.

Accepted Answer

The answer of Explain why intermediate goods and used goods...

Question 13

Joe has a full-time construction job and also does odd jobs for people on the weekends.You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence.Does the payment to Joe count toward the value of GDP?

Accepted Answer

A)  Yes, the fence increases the value of your house. 
B)  Yes, all income earned counts in GDP. 
C)  No, his is a non-market activity. 
D)  No, if this income is not likely to be reported to the government. 
E)  No, this is a leisure activity.

Question 14

The GDP deflator is a measure of:

Accepted Answer

A)  price level. 
B)  the growth rate of nominal GDP. 
C)  the growth rate of real GDP. 
D)  the growth rate of long-run trend GDP. 
E)  how much the economy contracts during a recession.

Question 15

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012.
 
-What was the inflation rate between the two years?

Accepted Answer

A)  1% 
B)  3.2% 
C)  2% 
D)  3.8% 
E)  8.3%

Question 16

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions:
 
-The market value of cell phones is:

Accepted Answer

A)  $5 million. 
B)  $100 million. 
C)  $500 million. 
D)  $20 million. 
E)  $750 million.

Question 17

Nominal GDP increased from $15.62 trillion to $16.09 trillion,and the price level increased from 120.0 to 122.4.The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Accepted Answer

A)  2.92%. 
B)  3.01%. 
C)  1.87%. 
D)  1.00%. 
E)  2.00%.

Question 18

Draw a graph to illustrate the phases of the business cycle.Be sure to identify the length of a contraction and an expansion.Identify a peak and a trough.

Accepted Answer

The answer of Draw a graph to illustrate the phases...

Question 19

Net exports can be defined as:

Accepted Answer

A)  exports plus imports. 
B)  exports minus imports. 
C)  exports divided by imports. 
D)  imports minus exports. 
E)  imports divided by exports.

Question 20

Nominal GDP is equal to:

Accepted Answer

A)  current prices * base year output. 
B)  current prices * current output. 
C)  base prices * base year output. 
D)  base year prices * current output. 
E)  current output √ base year prices.

Exam 6: Introduction to Macroeconomics and Gross Domestic Product

A student had the following expenditures last month: rent-$500,food expense-$200,cost of a used textbook from the bookstore-$50,cost of new shoes-$100,and cost of gas for the car-$100.Which of these items are included in GDP?

To evaluate the change in average living standards over time,it is best to use:

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions: -Which of the following is a service?

The business cycle measures:

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012. -Real GDP increases if:

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next six questions: Assume that the base year is 2012. -What was the GDP deflator in 2013?

Does the value of cleaning your house count toward the value of GDP?

Consider the following data, where GDP values are measured in millions of dollars, to answer the next seven questions: -What is the value of real GDP in 2010? Round to the nearest second decimal.

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next five questions: Assume that the base year is 2012. -Real GDP is equal to: