Question 1

During the 1940s, ________ increased sharply as a percentage of U.S. GDP because of ________.

Accepted Answer

A)  government expenditure; World War II 
B)  residential investment; the war on poverty 
C)  nonresidential investment; the space program 
D)  durable consumption expenditures; rationing of nondurable goods 
E)  transfer payments; the New Deal

Question 2

Identify which of the following goods are part of the current year's U.S. GDP and which are considered the current year's U.S. gross national product (GNP); explain. (Note: Ford is a company owned by U.S. citizens and Toyota is a company owned by Japanese citizens.)
(a) a Ford produced in Mexico
(b) a Toyota produced in California
(c) a meal you make for a dinner party
(d) an American-made vintage T-shirt from Led Zeppelin's 1971 North American tour you bought online last week

Accepted Answer

The answer of Identify which of the following goods are...

Question 3

In 2015, household expenditures accounted for about ________ percent of total GDP.

Accepted Answer

A)  50 
B)  68 
C)  45 
D)  76 
E)  13

Question 4

In 2015, net exports accounted for about ________ percent of total GDP.

Accepted Answer

A)  -3 
B)  13 
C)  20 
D)  100 
E)  -14

Question 5

Real GDP is given by ________, where the price level is the ________.

Accepted Answer

A)  Real GDP =Nominal GDP ｴ Price level; CPI 
B)  Real GDP = Nominal GDP ｸ Price level; GDP deflator 
C)  Real GDP= Nominal GDP -Price level; GDP deflator 
D)  Real GDP = Nominal GDP -Price level; GDP deflator 
E)  Real GDP =Nominal GDP ｸ Price level; CPI

Question 6

Refer to the following table when answering the following questions.
Table 2.4: U.S. and Eurozone (18 Economies) Nominal GDP in 2015 
-Consider Table 2.4. The value of eurozone nominal GDP in U.S. dollars is ________ billion.

Accepted Answer

A)  $13,531 
B)  $9,505 
C)  $11,501 
D)  $16,396 
E)  $21,219

Question 7

Nominal GDP is given by ________, where the price level is the ________.

Accepted Answer

A)  Nominal GDP =Price level ｴ Real GDP; GDP deflator 
B)  Nominal GDP = Price level ｸ Real GDP; GDP deflator 
C)  Nominal GDP = Price level +Real GDP; CPI 
D)  Nominal GDP = Price level- Real GDP; GDP deflator 
E)  Nominal GDP = Price level ｴ Real GDP; CPI

Question 8

When calculating the real GDP using the Laspeyres index, we use the final period's prices.

Accepted Answer

A) True 
 B)False

Question 9

In the income approach to GDP, fixed capital depreciation is defined as the after-tax profits of a firm.

Accepted Answer

A) True 
 B)False

Question 10

If the nominal GDP rises by 5 percent and the price level falls by 2 percent, the real GDP falls by 7 percent.

Accepted Answer

A) True 
 B)False

Question 11

The statistic used by economists to measure the value of economic output is:

Accepted Answer

A)  the unemployment rate. 
B)  GDP. 
C)  the CPI. 
D)  the GDP deflator. 
E)  the federal funds rate.

Question 12

In 2015, government transfer payments accounted for about ________ of government spending.

Accepted Answer

A)  one-half 
B)  one-third 
C)  68 percent 
D)  three-fifths 
E)  100 percent

Question 13

Refer to the following table when answering the following questions.
Table 2.2: U.S. 2014-2015 Domestic Income ($ billions) 
-Consider Table 2.2. From this data, total net domestic product in 2014 was about ________ billion.

Accepted Answer

A)  $14,906 
B)  $10,384 
C)  $17,651 
D)  $9,207 
E)  $14,754

Question 14

To get an accurate view of how GDPs differ across countries, we simply need to convert all countries' GDPs into dollars using the prevailing exchange rate.

Accepted Answer

A) True 
 B)False

Question 15

The percent change in the nominal GDP is given as:

Accepted Answer

A)  percent change in the price level + percent change in real GDP. 
B)  percent change in the price level -percent change in real GDP. 
C)  percent change in the price level ｴ percent change in real GDP. 
D)  percent change in the price level ｸ percent change in real GDP. 
E)  price level ｴ percent change in real GDP.

Question 16

What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?

Accepted Answer

The answer of What is real GDP? Why do we...

Question 17

Refer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios.
Table 2.3: National Income Accounting 
-Consider Table 2.3. Using the Laspeyres index, the percent change in real GDP was about:

Accepted Answer

A)  6 percent. 
B)  5 percent. 
C)  0 percent. 
D)  1 percent. 
E)  Not enough information is given.

Question 18

Refer to the following table when answering the following questions.
Table 2.4: U.S. and Eurozone (18 Economies) Nominal GDP in 2015 
-Consider Table 2.4. The value of the eurozone nominal GDP in U.S. dollars adjusted for price differences is ________ billion.

Accepted Answer

A)  $9,775 
B)  $13,530 
C)  $11,182 
D)  $8,079 
E)  $16,863

Question 19

Since about ________, U.S. expenditure shares by households, firms, and the government have been relatively ________.

Accepted Answer

A)  1939; constant 
B)  the Great Depression era; constant 
C)  1950; variable 
D)  1950; constant 
E)  1945; constant

Question 20

If we calculate the real GDP using the initial period's prices, we are using a ________ index. If, instead, we use the final period's prices, we are using a ________ index.

Accepted Answer

A)  Paasche; chain-weighted 
B)  Laspeyres; chain-weighted 
C)  Laspeyres; Paasche 
D)  Paasche; Laspeyres 
E)  chain-weighted; Fisher

Exam 2: Measuring the Macroeconomy

During the 1940s, increased sharply as a percentage of U.S. GDP because of .

In 2015, household expenditures accounted for about ________ percent of total GDP.

In 2015, net exports accounted for about ________ percent of total GDP.

Real GDP is given by , where the price level is the .

Refer to the following table when answering the following questions. Table 2.4: U.S. and Eurozone (18 Economies) Nominal GDP in 2015 -Consider Table 2.4. The value of eurozone nominal GDP in U.S. dollars is ________ billion.

Nominal GDP is given by , where the price level is the .

When calculating the real GDP using the Laspeyres index, we use the final period's prices.

In the income approach to GDP, fixed capital depreciation is defined as the after-tax profits of a firm.

If the nominal GDP rises by 5 percent and the price level falls by 2 percent, the real GDP falls by 7 percent.

The statistic used by economists to measure the value of economic output is:

In 2015, government transfer payments accounted for about ________ of government spending.

Refer to the following table when answering the following questions. Table 2.2: U.S. 2014-2015 Domestic Income ($ billions) -Consider Table 2.2. From this data, total net domestic product in 2014 was about ________ billion.

To get an accurate view of how GDPs differ across countries, we simply need to convert all countries' GDPs into dollars using the prevailing exchange rate.

The percent change in the nominal GDP is given as:

What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?

Refer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios. Table 2.3: National Income Accounting -Consider Table 2.3. Using the Laspeyres index, the percent change in real GDP was about:

Refer to the following table when answering the following questions. Table 2.4: U.S. and Eurozone (18 Economies) Nominal GDP in 2015 -Consider Table 2.4. The value of the eurozone nominal GDP in U.S. dollars adjusted for price differences is ________ billion.

Since about , U.S. expenditure shares by households, firms, and the government have been relatively .

If we calculate the real GDP using the initial period's prices, we are using a index. If, instead, we use the final period's prices, we are using a index.