Question 1

A GDP deflator of 112 means:

Accepted Answer

A)  the overall price level is 12 percent higher than in the base year.
B)  the overall output increased by 12 percent since the base year.
C)  every price in the economy has gone up by 12 percent.
D)  the production of each good in the economy has increased by 12 percent.E) None of the above
F) A) and D)

Question 2

You purchase a bag of chocolate chips for $3,a bag of flour for $1,a bag of sugar for $.50,a half dozen eggs for $.50,and a half pound of butter for $2.You use all these ingredients to make three dozen cookies.Your roommate offers you $15 for them,and you happily accept.How much does this process contribute to GDP?

Accepted Answer

A)  $7
B)  $15
C)  $22
D)  $8E) B) and C)
F) A) and D)

Question 3

Real GDP:

Accepted Answer

A)  is calculated based on goods and services valued at constant prices.
B)  is calculated based on goods and services valued at current prices (current at the time of production) .
C)  is useful in clearly seeing changes in prices over time using GDP.
D)  None of these statements is true.E) B) and C)
F) C) and D)

Question 4

A recession is characterized by:

Accepted Answer

A)  a period of significant decline in economic activity.
B)  falling GDP.
C)  increasing unemployment.
D)  All of these statements are true.E) B) and D)
F) All of the above

Question 5

A period of significant decline in economic activity,marked by falling GDP,rising unemployment,and an increased number of bankruptcies,is called:

Accepted Answer

A)  a severe depression.
B)  a recession.
C)  an expansion.
D)  a boom.E) All of the above
F) B) and C) B

Question 6

An example of a good or service that would not count in the U.S.GDP would be:

Accepted Answer

A)  a car made by Toyota in Tennessee.
B)  a car made by Ford in Michigan.
C)  sneakers made by Nike in Indonesia.
D)  sneakers made by New Balance in Ohio.E) None of the above
F) A) and D)

Question 7

The field of macroeconomics studies ______ and microeconomics studies ______.

Accepted Answer

A)  economic aggregates;individual markets
B)  individual markets;economic aggregates
C)  international variables;variables within a single economy
D)  variables within a single economy;international variablesE) All of the above
F) A) and B)

Question 8

GDP per capita:

Accepted Answer

A)  paints a clearer picture of how thin the output is spread across a population.
B)  tells us how much is produced per person in an economy.
C)  is calculated by dividing GDP by the population size of the economy.
D)  All of these statements are true.E) None of the above
F) B) and C) D

Question 9

The market value of a good or service is:

Accepted Answer

A)  the price at which it is bought and sold.
B)  the government's valuation using the CPI.
C)  the price at which producers are willing to sell an output.
D)  None of these statements is true.E) B) and C)
F) C) and D)

Question 10

Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

Accepted Answer

A)  Yes,it would indicate a larger rise in prices relative to a decrease in output.
B)  No,since prices are held constant and that would be mathematically impossible.
C)  Yes,it would indicate a larger rise in output relative to a decrease in prices.
D)  No,since output is held constant and that would be mathematically impossible.E) All of the above
F) C) and D)

Question 11

The difference between the sale value of the product and the value of the inputs that went into it is called:

Accepted Answer

A)  the value-added of that stage of production.
B)  the value of the final product.
C)  the profit margin.
D)  None of these is correct.E) C) and D)
F) None of the above

Question 12

Government purchases,as a component of GDP:

Accepted Answer

A)  represent goods and services bought by all levels of government.
B)  include both consumption- and investment-type goods bought by the government.
C)  include services the government pays for.
D)  All of these statements are true.E) B) and C)
F) B) and D)

Question 13

GDP could be calculated over:

Accepted Answer

A)  a month.
B)  a quarter.
C)  a year.
D)  any time period.E) C) and D)
F) B) and D)

Question 14

Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Accepted Answer

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

Question 15

Using the expenditure method to estimate GDP,we would include:

Accepted Answer

A)  consumption,investment,government purchases,and net exports.
B)  consumption,government revenues,durable goods,and net exports.
C)  consumption,investment,government purchases,and exports.
D)  consumption,investment,government purchases,and imports.E) C) and D)
F) B) and D)

Question 16

GDP per capita:

Accepted Answer

A)  is highly correlated with quality of life.
B)  is perfectly correlated with quality of life.
C)  is loosely correlated with quality of life.
D)  is negatively correlated with quality of life.E) None of the above
F) A) and B)

Question 17

The Green GDP:

Accepted Answer

A)  tries to capture the environmental effects regular GDP doesn't.
B)  subtracts the environmental costs of production from the positive outputs normally counted in GDP.
C)  values negative externalities.
D)  All of these statements are true.E) C) and D)
F) All of the above

Question 18

On average across the world,the underground economy is worth about

Accepted Answer

A)  one-third of GDP.
B)  one-tenth of GDP.
C)  one-quarter of GDP.
D)  one-half of GDP.E) None of the above
F) B) and C)

Question 19

Negative externalities:

Accepted Answer

A)  can be thought of as "negative output."
B)  are final "goods" that do harm to people.
C)  are not included in GDP.
D)  All of these statements are true.E) None of the above
F) A) and B) D

Question 20

The circular flow model illustrates the crucially important idea of macroeconomics,which is that:

Accepted Answer

A)  every expenditure of someone in the economy is exactly equal to the income of another.
B)  only two markets exist in every economy-input and output.
C)  income is lower when there is more spending on goods and services.
D)  the flow of two things in the economy-"stuff" and "money"-travel in the same direction.E) C) and D)
F) None of the above

Exam 24: Measuring the Wealth of Nations

A GDP deflator of 112 means:

Correct Answer
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Correct Answer
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Real GDP:

Correct Answer
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A recession is characterized by:

Correct Answer
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A period of significant decline in economic activity,marked by falling GDP,rising unemployment,and an increased number of bankruptcies,is called:

Correct Answer
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B

An example of a good or service that would not count in the U.S.GDP would be:

Correct Answer
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The field of macroeconomics studies and microeconomics studies .

Correct Answer
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GDP per capita:

Correct Answer
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D

The market value of a good or service is:

Correct Answer
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Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

Correct Answer
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The difference between the sale value of the product and the value of the inputs that went into it is called:

Correct Answer
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Government purchases,as a component of GDP:

Correct Answer
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GDP could be calculated over:

Correct Answer
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Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Correct Answer
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Using the expenditure method to estimate GDP,we would include:

Correct Answer
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GDP per capita:

Correct Answer
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The Green GDP:

Correct Answer
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On average across the world,the underground economy is worth about

Correct Answer
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Negative externalities:

Correct Answer
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D

The circular flow model illustrates the crucially important idea of macroeconomics,which is that:

Correct Answer
verified

Exam 24: Measuring the Wealth of Nations

A GDP deflator of 112 means:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Real GDP:

Correct AnswerverifiedShow Answer

A recession is characterized by:

Correct AnswerverifiedShow Answer

A period of significant decline in economic activity,marked by falling GDP,rising unemployment,and an increased number of bankruptcies,is called:

Correct AnswerverifiedB

An example of a good or service that would not count in the U.S.GDP would be:

Correct AnswerverifiedShow Answer

The field of macroeconomics studies ______ and microeconomics studies ______.

Correct AnswerverifiedShow Answer

GDP per capita:

Correct AnswerverifiedD

The market value of a good or service is:

Correct AnswerverifiedShow Answer

Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

Correct AnswerverifiedShow Answer

The difference between the sale value of the product and the value of the inputs that went into it is called:

Correct AnswerverifiedShow Answer

Government purchases,as a component of GDP:

Correct AnswerverifiedShow Answer

GDP could be calculated over:

Correct AnswerverifiedShow Answer

Which approach to calculating GDP would be best to compare consumer activity versus government purchases?

Correct AnswerverifiedShow Answer

Using the expenditure method to estimate GDP,we would include:

Correct AnswerverifiedShow Answer

GDP per capita:

Correct AnswerverifiedShow Answer

The Green GDP:

Correct AnswerverifiedShow Answer

On average across the world,the underground economy is worth about

Correct AnswerverifiedShow Answer

Negative externalities:

Correct AnswerverifiedD

The circular flow model illustrates the crucially important idea of macroeconomics,which is that:

Correct AnswerverifiedShow Answer

Correct Answer
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B

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The field of macroeconomics studies and microeconomics studies .

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D

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D

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