Question 1

A recession occurs when real GDP decreases for at least 6 months.

Accepted Answer

A) True 
 B)False

Question 2

Looking at the components of the income approach we see that

Accepted Answer

A)   compensation of employees is the largest category.
B)   consumption is the largest category.
C)   rental income is the largest category.
D)   profits are the largest category.E) B) and D)
F) B) and C)

Question 3

Proprietorsʹ income is a component of which approach to measuring GDP?

Accepted Answer

A)   cost approach
B)   expenditure approach
C)   output approach
D)   incomes approachE) A) and B)
F) A) and C)

Question 4

Which of the following items is NOT  a component of the income approach to measuring U.S. GDP?

Accepted Answer

A)   investment
B)   interest earned on savings deposits
C)   income earned by businesses that export goods
D)   profits made by businessesE) A) and C)
F) A) and D)

Question 5

Which of the following is  NOT  a final good?

Accepted Answer

A)   a new car sold to Avis for use in their fleet of rental cars
B)   a hot dog sold to a spectator at a Chicago Bears football game
C)   a new computer sold to an NYU student
D)   a purse sold to a foreign visitorE) A) and D)
F) None of the above

Question 6

Recessions are commonly defined to occur

Accepted Answer

A)   when the unemployment rate exceeds 6 percent.
B)   when growth in real GDP decreases for two consecutive quarters.
C)   whenever unemployment increases.
D)   when growth in real GDP is negative for two consecutive quarters.E) A) and D)
F) None of the above

Question 7

ʺAs the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be Chinaʹs ability to plough on regardless of double-digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent in each of the last two monthsʺ.
Beijingʹs Burden,
-According to the article_________, can be expected to_________ this year.

Accepted Answer

A)   consumption; decrease
B)   net interest income; decrease
C)   exports; increase
D)   imports; decreaseE) All of the above
F) B) and C)

Question 8

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

Accepted Answer

A)   Real GDP does not include the underground economy.
B)   Real GDP omits measures of political freedom.
C)   Real GDP overvalues household production.
D)   Real GDP does not take into account the value of peopleʹs leisure time.E) All of the above
F) A) and B)

Question 9

-In the above figure, flow B represents householdsʹ__________ .

Accepted Answer

A)   consumption expenditures
B)   income
C)   saving
D)   investmentE) A) and D)
F) B) and C)

Question 10

Item  Dollars  Personal consumption  expenditure 1500 Gros s private domestic  inves tment 355 Government  expenditure  on goods and services 590 Exports of goods and  services 70 Imports of goods and  services 50 Depreciation 200 Indirect busines s taxes 75\begin{array} { | l | l | } \hline 	ext { Item } & 	ext { Dollars } \\hline \begin{array}{l}	ext { Personal consumption } \	ext { expenditure }\end{array} & 1500 \\hline \begin{array}{l}	ext { Gros s private domestic } \	ext { inves tment }\end{array} & 355 \\hline \begin{array}{l}	ext { Government } \	ext { expenditure } \	ext { on goods and services }\end{array} & 590 \\hline \begin{array}{l}	ext { Exports of goods and } \	ext { services }\end{array} & 70 \\hline \begin{array}{l}	ext { Imports of goods and } \	ext { services }\end{array} & 50 \\hline 	ext { Depreciation } & 200 \\hline 	ext { Indirect busines s taxes } & 75 \\hline\end{array} Item  Personal consumption  expenditure ​ Gros s private domestic  inves tment ​ Government  expenditure  on goods and services ​ Exports of goods and  services ​ Imports of goods and  services ​ Depreciation  Indirect busines s taxes ​ Dollars 1500355590705020075​​ 
-Based on the data in the above table, gross domestic product equals

Accepted Answer

A)   $2,465.
B)   $2,190.
C)   $2,750.
D)   $2,840. E) B) and C)
F) C) and D)

Question 11

The business cycle is the

Accepted Answer

A)   regular fluctuations of real GDP below potential GDP.
B)   irregular fluctuations of prices around real GDP.
C)   irregular fluctuations of real GDP around potential GDP.
D)   regular growth rate of the real GDP.E) C) and D)
F) B) and C)

Question 12

The series of ups and downs the economy tends to move in is called

Accepted Answer

A)   a depression.
B)   the business cycle.
C)   economic growth.
D)   a recession.E) B) and C)
F) A) and B)

Question 13

In the circular flow of income

Accepted Answer

A)   households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.
B)   households sell goods and services while firms sell factors.
C)   households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms.
D)   households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms.E) None of the above
F) B) and D)

Question 14

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Accepted Answer

A)   a final product.
B)   an intermediate good.
C)   a financial asset.
D)   a used good.E) B) and D)
F) None of the above

Question 15

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

Accepted Answer

Net investment is the change in the capi...

Question 16

Net investment equals

Accepted Answer

A)   capital stock minus depreciation.
B)   gross investment minus depreciation.
C)   gross investment/depreciation.
D)   the total quantity of plant, equipment and buildings.E) C) and D)
F) B) and C)

Question 17

The largest component of national income is

Accepted Answer

A)   rental income.
B)   compensation of employees.
C)   corporate profits.
D)   proprietorsʹ income.E) A) and D)
F) A) and C)

Question 18

Potential GDP is

Accepted Answer

A)   always different from real GDP.
B)   another name for real GDP.
C)   the level of GDP not adjusted for price changes.
D)   the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation.E) All of the above
F) None of the above

Question 19

Which, if any, of the following causes reported GDP to be less than total economic production?

Accepted Answer

A)   the exclusion of household production
B)   the inclusion of government expenditures
C)   the exclusion of government transfers
D)   None of the above cause reported GDP to be less than total production.E) B) and C)
F) A) and D)

Question 20

Real GDP does not show the state of economic welfare in a country in part because GDP omits
I. household production.
II. leisure time available.
III. the quality of the environment.

Accepted Answer

A)   I, II and III
B)   I only
C)   I and III
D)   II and IIIE) A) and C)
F) B) and D)

Exam 4: Measuring Gdp and Economic Growth

Correct Answer
verified

Which of the following is NOT a final good?

Correct Answer
verified

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Correct Answer
verified

In the circular flow of income

Correct Answer
verified

Looking at the components of the income approach we see that

Correct Answer
verified

A recession occurs when real GDP decreases for at least 6 months.

Correct Answer
verified

Proprietorsʹ income is a component of which approach to measuring GDP?

Correct Answer
verified

Potential GDP is

Correct Answer
verified

The business cycle is the

Correct Answer
verified

Net investment equals

Correct Answer
verified

Which, if any, of the following causes reported GDP to be less than total economic production?

Correct Answer
verified

Real GDP does not show the state of economic welfare in a country in part because GDP omits I. household production. II. leisure time available. III. the quality of the environment.

Correct Answer
verified

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

Correct Answer
verified

-In the above figure, flow B represents householdsʹ__________ .

Correct Answer
verified

The largest component of national income is

Correct Answer
verified

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

Correct Answer
verified
Net investment is the change in the capi...
View Answer

The series of ups and downs the economy tends to move in is called

Correct Answer
verified

Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Correct Answer
verified

Recessions are commonly defined to occur

Correct Answer
verified

Correct Answer
verified

Exam 4: Measuring Gdp and Economic Growth

Correct AnswerverifiedShow Answer

Which of the following is NOT a final good?

Correct AnswerverifiedShow Answer

A ton of coal purchased by your local utility to burn to make electricity would be best described as

Correct AnswerverifiedShow Answer

In the circular flow of income

Correct AnswerverifiedShow Answer

Looking at the components of the income approach we see that

Correct AnswerverifiedShow Answer

A recession occurs when real GDP decreases for at least 6 months.

Correct AnswerverifiedShow Answer

Proprietorsʹ income is a component of which approach to measuring GDP?

Correct AnswerverifiedShow Answer

Potential GDP is

Correct AnswerverifiedShow Answer

The business cycle is the

Correct AnswerverifiedShow Answer

Net investment equals

Correct AnswerverifiedShow Answer

Which, if any, of the following causes reported GDP to be less than total economic production?

Correct AnswerverifiedShow Answer

Real GDP does not show the state of economic welfare in a country in part because GDP omits I. household production. II. leisure time available. III. the quality of the environment.

Correct AnswerverifiedShow Answer

Which of the following is NOT a reason that real GDP is a poor measure of a nationʹs economic welfare?

Correct AnswerverifiedShow Answer

-In the above figure, flow B represents householdsʹ__________ .

Correct AnswerverifiedShow Answer

The largest component of national income is

Correct AnswerverifiedShow Answer

On January 1, 2010, United Delivery had trucks valued at $1.3 million. During 2010, United Delivery purchased new trucks valued at $500,000. If the value of the trucks on December 31, 2010 was $1.5 million, what is the amount of its net investment and its depreciation during 2010?

Correct AnswerverifiedNet investment is the change in the capi...View AnswerShow Answer

The series of ups and downs the economy tends to move in is called

Correct AnswerverifiedShow Answer

Which of the following items is NOT a component of the income approach to measuring U.S. GDP?

Correct AnswerverifiedShow Answer

Recessions are commonly defined to occur

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Net investment is the change in the capi...
View Answer

Correct Answer
verified

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Correct Answer
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