Question 1

A country's exports minus its imports during a period are:

Accepted Answer

A)  net exports.
B)  gross exports.
C)  net imports.
D)  gross imports.E) B) and D)
F) A) and B)

Question 2

Transfer payments:

Accepted Answer

A)  are a means by which government raises funds.
B)  are a redistribution of funds from one individual to another individual.
C)  are counted in GDP.
D)  is another term for government taxation.E) C) and D)
F) A) and D)

Question 3

Use the following to answer questions :
Table: Price and Output Data 
-(Table: Price and Output Data)  Look at the table Price and Output Data. Between years 2 and 3, nominal GDP increased by:

Accepted Answer

A)  33%.
B)  25%.
C)  67%.
D)  8%.E) C) and D)
F) All of the above

Question 4

Which of the following is NOT included in investment spending in the national income accounts?

Accepted Answer

A)  new residential construction
B)  the purchase of machinery and other productive physical capital
C)  the purchase of stocks and bonds by a business
D)  spending on inventoriesE) A) and B)
F) A) and C)

Question 5

Between 2000 and 2013, the nominal GDP of Venezuela grew by 29% annually because prices in Venezuela decreased rapidly during the period.

Accepted Answer

A) True 
 B)False

Question 6

The GDP deflator is another name for the consumer price index.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer questions :
Table: Pizza Economy III
 
-(Table: Pizza Economy III)  Look at the table Pizza Economy III. Considering 2010 as the base year, real GDP between 2010 and 2011 grew at a rate of:

Accepted Answer

A)  53.19%.
B)  39.47%.
C)  -39.47%.
D)  -58.67%.E) C) and D)
F) None of the above

Question 8

GDP excludes all of the following EXCEPT:

Accepted Answer

A)  the value of leisure.
B)  damage to the environment.
C)  the value of housework.
D)  the value of owner-occupied housing.E) A) and B)
F) A) and C)

Question 9

A household is a person or group of people who buy resources and produce goods and services.

Accepted Answer

A) True 
 B)False

Question 10

Stock in a company is:

Accepted Answer

A)  a share of ownership of the company.
B)  an IOU that pays interest.
C)  a portion of a firm's profits paid to shareholders.
D)  part of private savings.E) All of the above
F) B) and C)

Question 11

Which of the following is included in GDP?

Accepted Answer

A)  the purchase of 100 shares of Microsoft stock
B)  the purchase of a 1965 Ford Mustang
C)  Social Security payments from the U.S. government to retired people
D)  the purchase of a ticket to a Lady Gaga concertE) B) and C)
F) A) and B)

Question 12

If the price index in year 1 is 146 and in year 2 is 163, the rate of inflation between year 1 and year 2 is:

Accepted Answer

A)  8.2%.
B)  10.43%.
C)  11.64%.
D)  17.0%.E) None of the above
F) A) and B)

Question 13

Which of the following is the best equation for GDP?

Accepted Answer

A)  GDP = C+ I + G - X + IM
B)  GDP = C + I + G + X - IM
C)  GDP = C + I + G + taxes - value added
D)  GDP = C + I + G + taxes + X + IME) A) and C)
F) None of the above

Question 14

In the Republic of Sildavia, a market basket of goods and services cost $130 in 2009, $140 in 2010, and $160 in 2011. Based on this information and considering 2009 as the base year, inflation from 2009 to 2011 was:

Accepted Answer

A)  7.14%.
B)  7.69%.
C)  14.28%.
D)  23.07%.E) B) and C)
F) C) and D)

Question 15

Assume that the consumer price index for 2009 was 124.0 and for 2010 was 130.7. What was the inflation rate between the two years?

Accepted Answer

A)  0.95%
B)  5.40%
C)  6.70%
D)  3.20%E) A) and B)
F) B) and D)

Question 16

Use the following to answer questions:
Figure: Expanded Circular-Flow Model 
-(Figure: Expanded Circular-Flow Model)  Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of the rest of the world is:

Accepted Answer

A)  $30.
B)  $80.
C)  $160.
D)  $240.E) None of the above
F) A) and B)

Question 17

Which of the following is FALSE? GDP can be calculated by summing:

Accepted Answer

A)  total market value of all final goods and services produced in a country in a given year.
B)  all factor payments within a country's borders in a given year.
C)  the value added for all goods and services.
D)  government spending and tax revenues.E) All of the above
F) None of the above

Question 18

Economists frequently use GDP per capita to reflect:

Accepted Answer

A)  the impact of prices on GDP.
B)  differences in living standards across countries.
C)  people who are employed.
D)  both people who are employed and those who are unemployed.E) A) and D)
F) C) and D)

Question 19

Suppose Elmer Brown is campaigning for reelection as governor of his state. He claims that during his first term the state's citizens are 50% better off, since GDP has increased from $10 billion to $15 billion. Why might his claim be misguided?

Accepted Answer

If Elmer Brown is using nominal GDP figu...

Question 20

The major difference between the producer price index and the consumer price index is that the produce price index _____ and the consumer price index _____.

Accepted Answer

A)  is based on retail prices; is based on wholesale prices
B)  measures the cost of living of self-employed workers; measures the cost of living of salaried workers
C)  generally registers a higher rate of inflation; generally registers a lower rate of inflation
D)  is based on the cost of a basket typically purchased by producers; is based on the cost of a basket typically purchased by consumersE) A) and B)
F) A) and C)

Exam 7: Gdp and Cpi: Tracking the Macroeconomy

Which of the following is included in GDP?

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Between 2000 and 2013, the nominal GDP of Venezuela grew by 29% annually because prices in Venezuela decreased rapidly during the period.

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Transfer payments:

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Suppose Elmer Brown is campaigning for reelection as governor of his state. He claims that during his first term the state's citizens are 50% better off, since GDP has increased from $10 billion to $15 billion. Why might his claim be misguided?

Correct AnswerverifiedIf Elmer Brown is using nominal GDP figu...View AnswerShow Answer

A household is a person or group of people who buy resources and produce goods and services.

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If the price index in year 1 is 146 and in year 2 is 163, the rate of inflation between year 1 and year 2 is:

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The GDP deflator is another name for the consumer price index.

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Stock in a company is:

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GDP excludes all of the following EXCEPT:

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Economists frequently use GDP per capita to reflect:

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A country's exports minus its imports during a period are:

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Use the following to answer questions : Table: Pizza Economy III -(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, real GDP between 2010 and 2011 grew at a rate of:

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Assume that the consumer price index for 2009 was 124.0 and for 2010 was 130.7. What was the inflation rate between the two years?

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The major difference between the producer price index and the consumer price index is that the produce price index _____ and the consumer price index _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Between years 2 and 3, nominal GDP increased by:

Correct AnswerverifiedShow Answer

In the Republic of Sildavia, a market basket of goods and services cost $130 in 2009, $140 in 2010, and $160 in 2011. Based on this information and considering 2009 as the base year, inflation from 2009 to 2011 was:

Correct AnswerverifiedShow Answer

Which of the following is the best equation for GDP?

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Which of the following is FALSE? GDP can be calculated by summing:

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Which of the following is NOT included in investment spending in the national income accounts?

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Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of the rest of the world is:

Correct AnswerverifiedShow Answer

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If Elmer Brown is using nominal GDP figu...
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The major difference between the producer price index and the consumer price index is that the produce price index _ and the consumer price index _.

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