Question 1

One of the most crucial ideas in macroeconomics is understanding that:

Accepted Answer

A)  zero unemployment is the best way to achieve economic growth.
B)  measuring total expenditures or total income both equal total production of an economy.
C)  prolonging economic downturns can be prolonged by fiscal policy.
D)  GNP is the most commonly used measurement of total production.E) A) and B)
F) All of the above

Question 2

If the Real GDP increases from one year to the next,we could conclude the country experienced:

Accepted Answer

A)  inflation and no change in output.
B)  an increase in output and no change in prices.
C)  a definite increase in output and may have experienced an increase in prices.
D)  definite inflation and may have experienced an increase in output.E) A) and C)
F) A) and B)

Question 3

The income approach to calculating GDP:

Accepted Answer

A)  is more accurate than using the expenditure approach.
B)  is less accurate than using the expenditure approach.
C)  will generate the same answer as using the expenditure approach.
D)  is simpler to calculate than the expenditure approach.E) B) and C)
F) None of the above

Question 4

An example of a government purchase that would be included in GDP would be:

Accepted Answer

A)  pencils for the employees of the FBI to use.
B)  the salaries of those in the military.
C)  replacement calculators for the Congressional Budget Office.
D)  All of these are considered part of government purchases in GDP.E) A) and B)
F) A) and C)

Question 5

Is it possible to have a GDP deflator of less than 100?

Accepted Answer

A)  Yes,it would indicate a year when prices were lower than in the base year.
B)  Yes,it would indicate a year when output was lower than in the base year.
C)  No,that is mathematically impossible.
D)  Yes,it would indicate a year when prices were lower than in the previous year.E) C) and D)
F) A) and D)

Question 6

Economic growth can:

Accepted Answer

A)  create jobs.
B)  reduce poverty.
C)  improve standards of living.
D)  All of these statements are true.E) A) and B)
F) B) and C)

Question 7

In 1978,China was the world's 15th-largest economy.By 2011,China:

Accepted Answer

A)  had the second-largest economy in the world.
B)  had a larger economy than Japan.
C)  had an economy worth about $6 trillion.
D)  All of these statements are true.E) All of the above
F) B) and D)

Question 8

According to the circular flow model,expenditures by one person translate:

Accepted Answer

A)  directly into income for someone else.
B)  indirectly into the value of that person's time.
C)  directly into his or her income.
D)  indirectly into the household's budget.E) A) and B)
F) B) and D)

Question 9

Tallulah is a German citizen who works for Volkswagen located in Fresno,California.Tallulah's work contributes to:

Accepted Answer

A)  U.S.GDP,but not U.S.GNP.
B)  U.S.GNP,but not U.S.GDP.
C)  German GDP,but not U.S.GDP.
D)  German GDP and U.S.GNP.E) All of the above
F) None of the above

Question 10

GDP counts:

Accepted Answer

A)  only final goods and services,because otherwise certain things would be double-counted and the GDP would be overestimated.
B)  only intermediate goods and services,because those are easier to track.
C)  both intermediate and final goods and services because it is important to capture all values,regardless of which market they take place in.
D)  those values that are reported to the government.E) A) and B)
F) All of the above

Question 11

Which of the following is not an intermediate good?

Accepted Answer

A)  Tires purchased by Ford to put on their new Explorers
B)  Tires sold by Goodyear to put on your Explorer
C)  Tomatoes used by Ortega to make their salsa
D)  All of these are intermediate goods.E) A) and B)
F) B) and D)

Question 12

Apple has been producing the new iPhone throughout 2013,but doesn't plan to sell it until March 2014.How are these iPhones,which are sitting in a warehouse somewhere in the U.S. ,affecting GDP?

Accepted Answer

A)  They are inventory and will increase investment in 2013.
B)  They will increase GDP only in the year they are produced,2013.
C)  They are considered inventory until they sell,so investment will fall each time one is sold in 2014.
D)  All of these statements are true.E) A) and D)
F) A) and C)

Question 13

The difference between black market and gray market activities is:

Accepted Answer

A)  while neither are included in GDP,black market items are illegal and gray market items are not.
B)  while neither are include in GDP,gray market items are illegal and black market items are not.
C)  black market items are very rare and difficult to find,and gray market items are more commonplace,like babysitting.
D)  black market items are typically expensive items,and gray market items are not.E) B) and D)
F) All of the above

Question 14

One of the most common uses of GDP is:

Accepted Answer

A)  to track changes in an economy over time.
B)  to see which country has the most fair distribution of wealth.
C)  to evaluate different standards of living across countries.
D)  All of these statements are true.E) B) and C)
F) A) and C)

Question 15

Which approach to calculating GDP best highlights the relative importance of different factors of production?

Accepted Answer

A)  The expenditure approach
B)  The income approach
C)  The value-added approach
D)  Any of these measurements would work equally well for that comparison.E) A) and B)
F) A) and C)

Question 16

Consumption:

Accepted Answer

A)  is the largest component of GDP.
B)  is the value of total goods purchased by consumers.
C)  does not include the price of new homes.
D)  All of these are true.E) A) and B)
F) A) and C)

Question 17

GDP is most often discussed using _______ figures,although it is typically calculated _______.

Accepted Answer

A)  annual;quarterly
B)  annual;monthly
C)  quarterly;monthly
D)  quarterly;annuallyE) A) and D)
F) B) and C)

Question 18

GDP uses the market value of goods and services because:

Accepted Answer

A)  it provides a common valuation that allows us to compare one economy to another.
B)  it provides the opportunity to compare lists of outputs to see who produced more.
C)  it is the only data that can be gathered about goods and services.
D)  None of these statements is true.E) B) and D)
F) A) and C)

Question 19

Suzi is a British citizen who works for Yankee Candles in Massachusetts.Suzi's work will be included in:

Accepted Answer

A)  U.S.GDP since she's working for a U.S.firm.
B)  U.S.GDP since she's working for a firm located in the U.S.
C)  England's GDP since she's a British citizen.
D)  both the U.S.and England's GDP.E) A) and C)
F) A) and B)

Question 20

U.S.exports are:

Accepted Answer

A)  U.S.goods sold to foreigners.
B)  Foreign goods bought by Americans.
C)  U.S.goods sold to Americans.
D)  Foreign and U.S.goods sold to foreigners,but consumed in the U.S.E) All of the above
F) A) and D)

Exam 24: Measuring the Wealth of Nations

In 1978,China was the world's 15th-largest economy.By 2011,China:

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According to the circular flow model,expenditures by one person translate:

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Suzi is a British citizen who works for Yankee Candles in Massachusetts.Suzi's work will be included in:

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U.S.exports are:

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Which approach to calculating GDP best highlights the relative importance of different factors of production?

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Is it possible to have a GDP deflator of less than 100?

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Apple has been producing the new iPhone throughout 2013,but doesn't plan to sell it until March 2014.How are these iPhones,which are sitting in a warehouse somewhere in the U.S. ,affecting GDP?

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Tallulah is a German citizen who works for Volkswagen located in Fresno,California.Tallulah's work contributes to:

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GDP is most often discussed using _______ figures,although it is typically calculated _______.

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GDP counts:

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Economic growth can:

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GDP uses the market value of goods and services because:

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Consumption:

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The income approach to calculating GDP:

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An example of a government purchase that would be included in GDP would be:

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The difference between black market and gray market activities is:

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If the Real GDP increases from one year to the next,we could conclude the country experienced:

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One of the most common uses of GDP is:

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Which of the following is not an intermediate good?

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One of the most crucial ideas in macroeconomics is understanding that:

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In 1978,China was the world's 15^th-largest economy.By 2011,China:

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GDP is most often discussed using _ figures,although it is typically calculated _.

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