question
The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household
True
False
True
False
answer
False.
question
In an "underground economy," the production of goods and services
is not measured or included in GDP.
is not measured but is included in GDP.
is measured and included in GDP.
is usually too insignificant to be included in GDP.
is not measured or included in GDP.
is not measured but is included in GDP.
is measured and included in GDP.
is usually too insignificant to be included in GDP.
answer
is not measured or included in GDP.
question
Consumption spending is $4.5 billion, gross private domestic investment is $3 billion, and government expenditures are $2 billion. If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy?
Exports are $4.5 billion, and imports are $2 billion.
Exports are $6 billion, and imports are $8.5 billion.
Exports are $9 billion, and imports are $6 billion.
Exports are $15 billion, and imports are $10.5 billion.
Exports are $4.5 billion, and imports are $2 billion.
Exports are $6 billion, and imports are $8.5 billion.
Exports are $9 billion, and imports are $6 billion.
Exports are $15 billion, and imports are $10.5 billion.
answer
Exports are $15 billion, and imports are $10.5 billion.
question
Macroeconomics seeks to understand
economic growth, business cycles, and inflation.
industry sales, marketing strategies and corporate growth.
product demand, product cost, and profit maximization.
public choices, private choices, and consumer maximization.
economic growth, business cycles, and inflation.
industry sales, marketing strategies and corporate growth.
product demand, product cost, and profit maximization.
public choices, private choices, and consumer maximization.
answer
economic growth, business cycles, and inflation.
question
Which of the following would result in GDP for an economy equal to $10 trillion?
C = $6 trillion
I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion
C = $7 trillion
I = $2 trillion
G = $4 trillion
NX = $3 trillion
C = $5 trillion
I = $5 trillion
G = $2 trillion
NX = -$2 trillion
C = $4 trillion
I = $3 trillion
G = $2 trillion
NX = -$1 trillion
C = $6 trillion
I = $2 trillion
G = $1.5 trillion
NX = -$2 trillion
C = $7 trillion
I = $2 trillion
G = $4 trillion
NX = $3 trillion
C = $5 trillion
I = $5 trillion
G = $2 trillion
NX = -$2 trillion
C = $4 trillion
I = $3 trillion
G = $2 trillion
NX = -$1 trillion
answer
C = $5 trillion
I = $5 trillion
G = $2 trillion
NX = -$2 trillion
I = $5 trillion
G = $2 trillion
NX = -$2 trillion
question
Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. If the inflation rate was 7%, what was the real interest rate you paid?
17 percent
10 percent
7 percent
3 percent
17 percent
10 percent
7 percent
3 percent
answer
3 percent.
question
If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2013, the sale of her car contributes $3,500 to 2013 GDP.
True
False
True
False
answer
False.
question
The real interest rate equals the nominal interest rate ________ the inflation rate.
times
divided by
plus
minus
times
divided by
plus
minus
answer
minus
question
Which of the following are not considered part of government purchases?
welfare benefits
teachers' salaries paid by a local government
a tank purchased by the federal government
a bridge purchased by the state government
welfare benefits
teachers' salaries paid by a local government
a tank purchased by the federal government
a bridge purchased by the state government
answer
Welfare benefits.
question
National income is derived from gross domestic product by
subtracting retained earnings from gross domestic product.
adding personal taxes and depreciation to gross domestic product.
subtracting depreciation from gross domestic product.
adding personal income and transfer payments to gross domestic product.
subtracting retained earnings from gross domestic product.
adding personal taxes and depreciation to gross domestic product.
subtracting depreciation from gross domestic product.
adding personal income and transfer payments to gross domestic product.
answer
subtracting depreciation from gross domestic product.
question
Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population?
unemployment rate
discouraged-worker ratio
labor force participation rate
the ratio of minimum wage to inflation
unemployment rate
discouraged-worker ratio
labor force participation rate
the ratio of minimum wage to inflation
answer
Labor force participation rate.
question
The CPI in 1990 was 131, and the CPI in 2010 was 218. If you earned a salary of $40,000 in 1990, what would be a salary with equivalent purchasing power in 2010?
$45,977
$66,565
$87,200
$143,486
$45,977
$66,565
$87,200
$143,486
answer
$66,565.
question
Refer to Table 9-11. Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2005 is the base year, then what is the CPI for 2013?
40.08
100
180
208
40.08
100
180
208
answer
208.
question
In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA
simply counts the total number of goods produced in the market place and then adds them up.
values goods at their market prices, multiplies them by the quantity produced, and then adds them up.
simply counts the total number of goods and services produced in the marketplace and then adds them up.
values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.
simply counts the total number of goods produced in the market place and then adds them up.
values goods at their market prices, multiplies them by the quantity produced, and then adds them up.
simply counts the total number of goods and services produced in the marketplace and then adds them up.
values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.
answer
values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.
question
Which of the following would decrease the unemployment rate?
an increase in the minimum wage
an increase in the efficiency wage
an increase in labor union membership
government aid to retrain unemployed workers
an increase in the minimum wage
an increase in the efficiency wage
an increase in labor union membership
government aid to retrain unemployed workers
answer
Government aid to retrain unemployed workers.
question
Which of the following is not an example of a transfer payment?
unemployment insurance payments
health insurance payments to an army private
social security payments to retirees
social security payments to disabled persons
unemployment insurance payments
health insurance payments to an army private
social security payments to retirees
social security payments to disabled persons
answer
health insurance payments to an army private
question
Assuming that the United States is the domestic economy, ________ are goods and services produced by ________ and purchased by ________.
exports; foreign countries; the United States
exports; the United States; the United States
imports; foreign countries; foreign countries
imports; foreign countries; the United States
exports; foreign countries; the United States
exports; the United States; the United States
imports; foreign countries; foreign countries
imports; foreign countries; the United States
answer
imports; foreign countries; the United States
question
To calculate GDP by the expenditure method, one must add
wages, rents, interest, and profits.
consumption spending, investment spending, government spending and net exports.
consumption spending, investment spending, government spending and exports.
labor, natural resources, entrepreneurship, and capital.
wages, rents, interest, and profits.
consumption spending, investment spending, government spending and net exports.
consumption spending, investment spending, government spending and exports.
labor, natural resources, entrepreneurship, and capital.
answer
consumption spending, investment spending, government spending and net exports.
question
Suppose in 2014, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2014?
the value of the house in 2014
the value of the house in 2003
the value of the house in 2014 minus depreciation
the value of the services of the real estate agent
the value of the house in 2014
the value of the house in 2003
the value of the house in 2014 minus depreciation
the value of the services of the real estate agent
answer
The value of the services of the real estate agent.
question
The circular flow of income shows that GDP can be measured as the sum of wages, interest, rent, and profits received by households or total expenditures on goods and services by households, firms, government, and the rest of the world.
True
False
True
False
answer
True.
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