Question 1

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

Accepted Answer

A)   is sold to households.
B)   is stored away for later sale.
C)   grows stale and is thrown away.
D)   is sold to other firms.E) B) and D)
F) All of the above C

Question 2

All of the following are a stock except:

Accepted Answer

A)   a consumer's wealth.
B)   the government budget deficit.
C)   the number of unemployed people.
D)   the amount of capital in the economy.E) A) and D)
F) All of the above B

Question 3

As a percentage of GNP (in 2012) ,depreciation (also called capital consumption allowances) amounts to approximately ______ percent.

Accepted Answer

A)   20
B)   16
C)   8
D)   3E) A) and B)
F) A) and C)

Question 4

In the national income accounts,net exports equal:

Accepted Answer

A)   exported goods minus imported goods.
B)   exported goods and services minus imported goods and services.
C)   exported goods minus imported services.
D)   exported goods and services plus imported goods and services.E) A) and B)
F) All of the above

Question 5

The labour force equals the:

Accepted Answer

A)   adult population.
B)   number of employed individuals.
C)   number of unemployed individuals.
D)   number of employed and unemployed individuals.E) B) and C)
F) B) and D)

Question 6

The largest component of national income is:

Accepted Answer

A)   corporate profits.
B)   compensation of employees.
C)   proprietors' incomes.
D)   net interest.E) B) and D)
F) C) and D)

Question 7

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Accepted Answer

Some possible, but not all, explanations...

Question 8

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

Accepted Answer

A)   the CPI but not in the GDP deflator.
B)   the GDP deflator but not in the CPI.
C)   both the CPI and the GDP deflator.
D)   neither the CPI nor the GDP deflator.E) B) and D)
F) All of the above

Question 9

The value added on an item produced means:

Accepted Answer

A)   a firm's profits on the item sold.
B)   the value of the labor inputs in the production of an item.
C)   the value of a firm's output less the value of its costs.
D)   the value of a firm's output less the value of the intermediate goods that the firm purchases.E) C) and D)
F) A) and D)

Question 10

The best measure of the economic satisfaction of the members of a society is:

Accepted Answer

A)   nominal GDP.
B)   real GDP.
C)   the rate of inflation.
D)   the value of corporate profits.E) C) and D)
F) A) and C)

Question 11

Nominal GDP means the value of goods and services is measured in ______ prices.

Accepted Answer

A)   current
B)   real
C)   constant
D)   averageE) All of the above
F) A) and D) A

Question 12

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

Accepted Answer

A)   housing services enjoyed by homeowners.
B)   rental services of automobiles driven by owners.
C)   meals cooked in restaurants.
D)   housing services enjoyed by renters.E) C) and D)
F) A) and B)

Question 13

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

Accepted Answer

A)   final
B)   used
C)   intermediate
D)   investmentE) C) and D)
F) B) and D)

Question 14

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.

Accepted Answer

A)   overestimates; 0.5
B)   overestimates; 2.0
C)   underestimates; 0.5
D)   underestimates; 2.0E) A) and D)
F) A) and C)

Question 15

National income equals net national product:

Accepted Answer

A)   minus depreciation.
B)   plus depreciation.
C)   minus indirect business taxes.
D)   plus indirect business taxes.E) A) and B)
F) B) and D)

Question 16

There are a number of measures of aggregate economic activity,such as GDP,GNP,national income,personal income,and disposable personal income.Each of these measures can be a good indicator depending on the issue under consideration.For each of the following issues,give your reasons for selecting one of the measures just mentioned as the best indicator to use in studying the issue:
a.The proportion of income households save
b.The relative share of earnings going to labour versus capital
c.The total output of new final goods and services.

Accepted Answer

a. Disposable personal income provides a...

Question 17

The GDP deflator is a:

Accepted Answer

A)   Laspeyres price index.
B)   Paasche price index.
C)   Laspeyres quantity index.
D)   Paasche quantity index.E) A) and C)
F) B) and C)

Question 18

Okun's Law is the _______ relationship between real GDP and the _________.

Accepted Answer

A)   negative; unemployment rate
B)   negative; inflation rate
C)   positive; unemployment rate
D)   positive; inflation rateE) B) and C)
F) All of the above

Question 19

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Accepted Answer

A)   1.5.
B)   1.7.
C)   1.9.
D)   2.0.E) A) and C)
F) All of the above

Question 20

When a firm sells a product out of inventory,GDP:

Accepted Answer

A)   increases.
B)   decreases.
C)   is not changed.
D)   increases or decreases,depending on the year the product was produced.E) None of the above
F) A) and C)

Exam 2: The Data of Macroeconomics

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

Correct Answer
verified
C

All of the following are a stock except:

Correct Answer
verified
B

As a percentage of GNP (in 2012) ,depreciation (also called capital consumption allowances) amounts to approximately ______ percent.

Correct Answer
verified

In the national income accounts,net exports equal:

Correct Answer
verified

The labour force equals the:

Correct Answer
verified

The largest component of national income is:

Correct Answer
verified

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Correct Answer
verified
Some possible, but not all, explanations...
View Answer

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

Correct Answer
verified

The value added on an item produced means:

Correct Answer
verified

The best measure of the economic satisfaction of the members of a society is:

Correct Answer
verified

Nominal GDP means the value of goods and services is measured in ______ prices.

Correct Answer
verified
A

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

Correct Answer
verified

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

Correct Answer
verified

Economists have estimated that the CPI inflation by approximately percentage point(s) per year.

Correct Answer
verified

National income equals net national product:

Correct Answer
verified

Correct Answer
verified
a. Disposable personal income provides a...
View Answer

The GDP deflator is a:

Correct Answer
verified

Okun's Law is the _ relationship between real GDP and the ___.

Correct Answer
verified

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Correct Answer
verified

When a firm sells a product out of inventory,GDP:

Correct Answer
verified

Exam 2: The Data of Macroeconomics

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

Correct AnswerverifiedC

All of the following are a stock except:

Correct AnswerverifiedB

As a percentage of GNP (in 2012) ,depreciation (also called capital consumption allowances) amounts to approximately ______ percent.

Correct AnswerverifiedShow Answer

In the national income accounts,net exports equal:

Correct AnswerverifiedShow Answer

The labour force equals the:

Correct AnswerverifiedShow Answer

The largest component of national income is:

Correct AnswerverifiedShow Answer

Assume two countries have the same nominal GDP (measured in the same currency using the same accounting rules).Explain at least three reasons why you cannot assume that citizens in each country enjoy approximately the same level of economic well-being.

Correct AnswerverifiedSome possible, but not all, explanations...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The value added on an item produced means:

Correct AnswerverifiedShow Answer

The best measure of the economic satisfaction of the members of a society is:

Correct AnswerverifiedShow Answer

Nominal GDP means the value of goods and services is measured in ______ prices.

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.

Correct AnswerverifiedShow Answer

National income equals net national product:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Disposable personal income provides a...View AnswerShow Answer

The GDP deflator is a:

Correct AnswerverifiedShow Answer

Okun's Law is the _______ relationship between real GDP and the _________.

Correct AnswerverifiedShow Answer

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 5 in 2009,then the GDP deflator in 2009,using a base year of 2002,was approximately:

Correct AnswerverifiedShow Answer

When a firm sells a product out of inventory,GDP:

Correct AnswerverifiedShow Answer

Correct Answer
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C

Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Some possible, but not all, explanations...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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Economists have estimated that the CPI inflation by approximately percentage point(s) per year.

Correct Answer
verified

Correct Answer
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Correct Answer
verified
a. Disposable personal income provides a...
View Answer

Correct Answer
verified

Okun's Law is the _ relationship between real GDP and the ___.

Correct Answer
verified

Correct Answer
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Correct Answer
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