Question 1

The many goods and services that are sold below the radar, outside of official records take place in the:

Accepted Answer

A)   underground economy.
B)   soft market.
C)   illegal economy.
D)   None of these statements is true.E) A) and C)
F) A) and D)

Question 2

In August of this year, Jack can best estimate the current year's GDP by:

Accepted Answer

A)   adjusting the first two quarterly estimates of GDP for seasonal variation.
B)   taking an average of the last four quarterly estimates of GDP available.
C)   multiplying the most recent quarter's GDP estimate by four.
D)   looking back at previous years GDP in order to make an accurate projection.E) A) and C)
F) B) and C)

Question 3

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) A) and B)
F) None of the above

Question 4

Which of the following measures can give some indication of the quality of life in an economy?

Accepted Answer

A)   Child mortality
B)   Literacy rates
C)   Life expectancy
D)   All of these help to assess quality of life.E) B) and D)
F) C) and D)

Question 5

Consumption:

Accepted Answer

A)   is the largest component of the U.S. GDP.
B)   is the value of total goods purchased by government.
C)   includes the price of new homes.
D)   is what households spend on food.E) B) and C)
F) A) and D)

Question 6

A recession is characterized by:

Accepted Answer

A)   a period of significant increase in economic activity.
B)   falling GDP.
C)   constant unemployment.
D)   an increase in the general price level.E) B) and C)
F) None of the above

Question 7

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) A) and B)
F) A) and C)

Question 8

In the base year:

Accepted Answer

A)   nominal and real GDP are equal by definition.
B)   nominal GDP is always larger than real GDP because prices are held constant.
C)   real GDP is always larger than nominal GDP because prices are held constant.
D)   real GDP will only be larger than nominal GDP if prices increased in the base year.E) A) and B)
F) B) and D)

Question 9

The GDP growth rate:

Accepted Answer

A)   is a measure to track changes in an economy over time.
B)   looks at changes in GDP across different time periods.
C)   is measured as the percent change in real GDP from one time period to the next.
D)   All of these statements are true.E) B) and C)
F) A) and C)

Question 10

The GDP deflator is a measure ofthe overall change in prices in an economy:

Accepted Answer

A)   using the ratio of nominal to real GDP.
B)   based on goods and services valued at constant prices.
C)   based on price-changes determined when output is held constant.
D)   using the ratio of real to nominal GDP.E) B) and C)
F) All of the above

Question 11

The size of the underground economy is probably large when:

Accepted Answer

A)   the cost of doing business legally is low.
B)   bribes are often necessary to cut through bureaucratic red tape.
C)   taxes are low.
D)   All of these statements are true.E) A) and D)
F) A) and C)

Question 12

Transfer payments are:

Accepted Answer

A)   spending that transfers resources from the government to individuals.
B)   payments that individuals make to the government.
C)   when individuals transfer stock ownership in lieu of payment with cash or other liquid assets.
D)   when individuals transfer cash for payments of a good or service.E) A) and D)
F) A) and C)

Question 13

An example of a U.S. import would be:

Accepted Answer

A)   a French bottle of wine consumed by an American.
B)   an Apple computer, made in the U.S., purchased by a U.S. college student who plans to study abroad in France.
C)   a bushel of apples that Canadians pick and enjoy during a lovely fall day in Vermont.
D)   an Apple computer, made in the U.S., purchased by a French student.E) A) and B)
F) All of the above

Question 14

Real GDP is:

Accepted Answer

A)   calculated based on goods and services valued at constant prices.
B)   calculated based on goods and services valued at current prices (current at the time of production) .
C)   useful in clearly seeing changes in prices over time using GDP.
D)   the actual GDP that is created in the economy when we consider all items purchased.E) A) and B)
F) B) and C)

Question 15

Assume the table has recorded the total output and prices of the only two goods produced. Looking at the figures in the table and using them to construct the GDP deflator, we can note the GDP deflator in 2003 was:

Accepted Answer

A)   135
B)   74
C)   109
D)   105E) None of the above
F) A) and D)

Question 16

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) A) and B)
F) A) and C)

Question 17

One of the economic changes that has most dramatically reshaped the world is:

Accepted Answer

A)   the rapid growth of China's economy.
B)   the rapid decline of Haiti's economy.
C)   the unemployment rate declining in the U.S. by 40 percent.
D)   the rapid growth of Italy's economy.E) All of the above
F) A) and B)

Question 18

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

Accepted Answer

A)   a t-shirt made by The Gap in Cambodia.
B)   a t-shirt made by Organi-tee in Oregon.
C)   a TV made by Toshiba in Georgia.
D)   a bottle of water made by Poland Springs in Maine.E) B) and D)
F) B) and C)

Question 19

Everyone in an economy tends to do better when we experience:

Accepted Answer

A)   high economic growth, low unemployment, and high inflation.
B)   steady economic growth, low unemployment, and stable prices.
C)   steady economic growth, high unemployment, and stable prices.
D)   high economic growth, high unemployment, and low inflation.E) B) and C)
F) A) and D)

Question 20

In macroeconomics, which of the following topics would most likely be studied?

Accepted Answer

A)   Bob's budget
B)   Nike's costs of production
C)   The growth rate of the oil industry
D)   Unemployment in Mexico.E) A) and B)
F) A) and C)

Exam 7: Measuring GDP

Which of the following measures can give some indication of the quality of life in an economy?

Correct Answer
verified

In macroeconomics, which of the following topics would most likely be studied?

Correct Answer
verified

A recession is characterized by:

Correct Answer
verified

Assume the table has recorded the total output and prices of the only two goods produced. Looking at the figures in the table and using them to construct the GDP deflator, we can note the GDP deflator in 2003 was:

Correct Answer
verified

The GDP growth rate:

Correct Answer
verified

The size of the underground economy is probably large when:

Correct Answer
verified

The GDP deflator is a measure ofthe overall change in prices in an economy:

Correct Answer
verified

The many goods and services that are sold below the radar, outside of official records take place in the:

Correct Answer
verified

Transfer payments are:

Correct Answer
verified

In August of this year, Jack can best estimate the current year's GDP by:

Correct Answer
verified

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

Correct Answer
verified

Everyone in an economy tends to do better when we experience:

Correct Answer
verified

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

Correct Answer
verified

One of the economic changes that has most dramatically reshaped the world is:

Correct Answer
verified

An example of a U.S. import would be:

Correct Answer
verified

In the base year:

Correct Answer
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Correct Answer
verified

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

Correct Answer
verified

Real GDP is:

Correct Answer
verified

Consumption:

Correct Answer
verified

Exam 7: Measuring GDP

Which of the following measures can give some indication of the quality of life in an economy?

Correct AnswerverifiedShow Answer

In macroeconomics, which of the following topics would most likely be studied?

Correct AnswerverifiedShow Answer

A recession is characterized by:

Correct AnswerverifiedShow Answer

Assume the table has recorded the total output and prices of the only two goods produced. Looking at the figures in the table and using them to construct the GDP deflator, we can note the GDP deflator in 2003 was:

Correct AnswerverifiedShow Answer

The GDP growth rate:

Correct AnswerverifiedShow Answer

The size of the underground economy is probably large when:

Correct AnswerverifiedShow Answer

The GDP deflator is a measure ofthe overall change in prices in an economy:

Correct AnswerverifiedShow Answer

The many goods and services that are sold below the radar, outside of official records take place in the:

Correct AnswerverifiedShow Answer

Transfer payments are:

Correct AnswerverifiedShow Answer

In August of this year, Jack can best estimate the current year's GDP by:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Everyone in an economy tends to do better when we experience:

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 AnswerverifiedShow Answer

One of the economic changes that has most dramatically reshaped the world is:

Correct AnswerverifiedShow Answer

An example of a U.S. import would be:

Correct AnswerverifiedShow Answer

In the base year:

Correct AnswerverifiedShow Answer

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

Real GDP is:

Correct AnswerverifiedShow Answer

Consumption:

Correct AnswerverifiedShow Answer

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