ECO 3203 Chapter 2 Problem Set

question

Two equivalent ways to view GDP are as the:

answer

Total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

question

The amount of capital in an economy is a ... variable and the amount of investment is a ... variable

answer

Stock, Flow

question

The market value of all final goods and services produced within an economy in a given period of time is called:

answer

Gross domestic product

question

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

answer

2001 Jeep Cherokee

question

To avoid double counting in the computation of GDP, only the value of ... goods and services are included.

answer

Final

question

Imputed values included in GDP are the:

answer

Estimated value of goods and services that are not sold in the marketplace.

question

Real GDP is measured in ... prices .... time

answer

Constant, per unit of

question

The national income accounts identity for an open economy is:

answer

Y=C+I+G+NX

question

In the national income accounts, all of the following are classified as government purchases except...

answer

Payments made to social security recipients

question

GNP equals GDP ... income earned domestically by foreigners ... income that nationals earn abroad

answer

Minus; plus

question

Which of the following is a flow variable?

answer

Income

question

To compute the value of GDP:

answer

Goods and services are valued at market prices

question

When a firm sells a product out of inventory, investment expenditures ... and consumption expenditures ...

answer

Decrease, increase

question

Assume that a bakery hires more workers and pays them wages and that the workers produce more bread. GDP in all of the following cases except when the bread:

answer

Grows stale and is thrown away

question

Assume a tire company sells 4 tires to an automobile company for $400, another company sells a CD player for $500 and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount of these transactions that should be counted in GDP is:

answer

$20,000

question

An example of an imputed value in the GDP is the:

answer

Housing services enjoyed by homeowners

question

If nominal GDP in 2009 equals $14 trillion and real GDP in 2009 equals $11 trillion, what is the value of the GDP deflator?

answer

1.27

question

If nominal GDP grew by 5% and real GDP grew by 3% then the GDP deflator grew by approximately ...

answer

question

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

answer

Measures changes in the quantity of goods and services produced by holding prices constant.

question

Chain-weighted measures of real GDP make use of prices from:

answer

A continuously changing base year.

question

If real GDP grew by 6% and the population grew by 2% then real GDP per person grew by:

answer

question

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

answer

Consumption

question

All of the following are classified as government purchases except:

answer

Payments made to Social Security recipients

question

Government purchases are goods and services purchased by:

answer

Federal, state and local governments

question

All of the following actions are investments in the sense of the term used by macroeconomists except:

answer

Sandra Santiago's buying 100 shares of IBM stock

question

In 2013, GDP per person in the United States was approximately:

answer

53,000

question

Net national product equals GNP:

answer

Minus depreciation

question

The largest component of national income is:

answer

Compensation of employees

question

Disposable personal income:

answer

Is computed by subtracting personal tax from personal income

question

According to the usual seasonal pattern of the US economy, GDP is highest in the quarter containing the months of:

answer

October, November, December

question

The CPI is determined by computing:

answer

The price of a fixed basket of goods and services, relative to the price of the same basket in a base year

question

The core inflation rate:

answer

Excludes food and energy prices

question

An increase in the price of goods bought by firms and the government will show up in:

answer

The GDP deflator but not the CPI

question

An increase in the price of imported goods will show up in:

answer

The CPI but not the GDP Deflator

question

The number of households interviewed in the monthly employment survey of the US BLS is approximately

answer

60,000

question

According to the definition used by the US BLS, people are considered to be unemployed if they:

answer

Do not have a job, but have looked for work in the past 4 weeks.

question

The labor force equals the:

answer

Number of employed and unemployed individuals

question

Assume the adult population is 191.6 million, total employment is 117.6 million and 9.4 million are unemployed. What is the unemployment rate?

answer

7.4%

question

The labor force participation rate is the percentage of the:

answer

Adult population that is in the labor force

question

If an increasing portion of the adult population is retired, then the labor force participation rate:

answer

Will decrease

question

Employment statistics computed from the establishment survey do not include:

answer

The self-employed

question

A worker with two jobs is counted:

answer

Once in the household survey, but twice in the establishment survey

question

In principle, the GDP accounts should- but do not- have an imputation for:

answer

Rental services of automobiles driven by owners.

question

A fixed weight price index like the CPI ... the change in the cost of living because it ... take into account that people can substitute less expensive goods for ones that have become more expensive

answer

Overestimates; does not

1 of 44

question

Two equivalent ways to view GDP are as the:

answer

Total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

question

The amount of capital in an economy is a ... variable and the amount of investment is a ... variable

answer

Stock, Flow

question

The market value of all final goods and services produced within an economy in a given period of time is called:

answer

Gross domestic product

question

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

answer

2001 Jeep Cherokee

question

To avoid double counting in the computation of GDP, only the value of ... goods and services are included.

answer

Final

question

Imputed values included in GDP are the:

answer

Estimated value of goods and services that are not sold in the marketplace.

question

Real GDP is measured in ... prices .... time

answer

Constant, per unit of

question

The national income accounts identity for an open economy is:

answer

Y=C+I+G+NX

question

In the national income accounts, all of the following are classified as government purchases except...

answer

Payments made to social security recipients

question

GNP equals GDP ... income earned domestically by foreigners ... income that nationals earn abroad

answer

Minus; plus

question

Which of the following is a flow variable?

answer

Income

question

To compute the value of GDP:

answer

Goods and services are valued at market prices

question

When a firm sells a product out of inventory, investment expenditures ... and consumption expenditures ...

answer

Decrease, increase

question

Assume that a bakery hires more workers and pays them wages and that the workers produce more bread. GDP in all of the following cases except when the bread:

answer

Grows stale and is thrown away

question

answer

$20,000

question

An example of an imputed value in the GDP is the:

answer

Housing services enjoyed by homeowners

question

If nominal GDP in 2009 equals $14 trillion and real GDP in 2009 equals $11 trillion, what is the value of the GDP deflator?

answer

1.27

question

If nominal GDP grew by 5% and real GDP grew by 3% then the GDP deflator grew by approximately ...

answer

question

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

answer

Measures changes in the quantity of goods and services produced by holding prices constant.

question

Chain-weighted measures of real GDP make use of prices from:

answer

A continuously changing base year.

question

If real GDP grew by 6% and the population grew by 2% then real GDP per person grew by:

answer

question

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

answer

Consumption

question

All of the following are classified as government purchases except:

answer

Payments made to Social Security recipients

question

Government purchases are goods and services purchased by:

answer

Federal, state and local governments

question

All of the following actions are investments in the sense of the term used by macroeconomists except:

answer

Sandra Santiago's buying 100 shares of IBM stock

question

In 2013, GDP per person in the United States was approximately:

answer

53,000

question

Net national product equals GNP:

answer

Minus depreciation

question

The largest component of national income is:

answer

Compensation of employees

question

Disposable personal income:

answer

Is computed by subtracting personal tax from personal income

question

According to the usual seasonal pattern of the US economy, GDP is highest in the quarter containing the months of:

answer

October, November, December

question

The CPI is determined by computing:

answer

The price of a fixed basket of goods and services, relative to the price of the same basket in a base year

question

The core inflation rate:

answer

Excludes food and energy prices

question

An increase in the price of goods bought by firms and the government will show up in:

answer

The GDP deflator but not the CPI

question

An increase in the price of imported goods will show up in:

answer

The CPI but not the GDP Deflator

question

The number of households interviewed in the monthly employment survey of the US BLS is approximately

answer

60,000

question

According to the definition used by the US BLS, people are considered to be unemployed if they:

answer

Do not have a job, but have looked for work in the past 4 weeks.

question

The labor force equals the:

answer

Number of employed and unemployed individuals

question

Assume the adult population is 191.6 million, total employment is 117.6 million and 9.4 million are unemployed. What is the unemployment rate?

answer

7.4%

question

The labor force participation rate is the percentage of the:

answer

Adult population that is in the labor force

question

If an increasing portion of the adult population is retired, then the labor force participation rate:

answer

Will decrease

question

Employment statistics computed from the establishment survey do not include:

answer

The self-employed

question

A worker with two jobs is counted:

answer

Once in the household survey, but twice in the establishment survey

question

In principle, the GDP accounts should- but do not- have an imputation for:

answer

Rental services of automobiles driven by owners.

question

A fixed weight price index like the CPI ... the change in the cost of living because it ... take into account that people can substitute less expensive goods for ones that have become more expensive

answer

Overestimates; does not

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