Economics Exam Nov 2

A painter pays $500 for paint he uses to repaint a house. He then present a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?

$1200

In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?

$1230

In the economy of Ukzten, in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP in 2010?

$1750

Refer to Table 24-1. The cost o the basket in 2005 was

$200

Refer to Table 24-1. The cost of the basket in 2006 was

$240

A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

$250 to GDP

In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?

$6800

Refer to table 23-3. What was the growth rate of real GDP for 1931?

-6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.

Refer to table 23-3. What was the growth rate of real GDP for 1930?

-8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.

In the base year, the GDP deflator is always

100

Refer to Table 24-1. If 2005 is the base year, then the CPI for 2005 was

100

Refer to Table 24-1. If 2006 is the base year then the CPI for 2006

100

Refer to Table 24-1. If 2005 is the base year, then the CPI for 2006 was

120

Refer to Table 24-1. If 2005 is the base year, then the inflation rate in 2006 was

20 percent

Refer to Table 24-1. If 2006 is the base year, then the inflation rate in 2006 was

20 percent

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much GDP?

4 MILLION

Refer to table 23-3. What is the GDP deflator and the inflation rate for 1932?

8.09,-11.7

Refer to table 23-3. If prices had remained constant between 1929 and 1930, GDP would have decreased

8.62%

Refer to Table 24-1. If 2006 is the base year, then the CPI for 2005 was

83.3

Refer to table 23-3. What is the GDP deflator and the inflation rate for 1931?

9.6,-10.3

The CPI is a measure of the overall cost of goods and services bought by

A TYPICAL CONSUMER

Which of the following is a way to compute GDP

ADD UP THE MARKET VALUES OF ALL FINAL GOODS AND SERVICES

GDP is equal

ALL OF THE ABOVE ARE CORRECT

GDP is not a perfect measure of well-being; for example,

ALL OF THE ABOVE ARE CORRECT

Which of the following statements about GDP is correct?`

ALL OF THE ABOVE ARE CORRECT

Which of the following domestically produced items is not included in GDP?

ALL OF THE ABOVE ARE INCLUDED IN GDP

Which of the following is included in the consumption component of GDP?

ALL OF THE ABOVE ARE INCLUDED IN THE CONSUMPTION COMPONENT OF GDDP.

Spots, Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called

AN INTERMEDIATE GOOD

Expenditures on a nation's domestic production

ARE EQUAL TO ITS DOMESTIC PRODUCTION

GDP per person tells us the income and expenditure of the

AVERAGE PERSON IN THE ECONOMY

The consumption component of GDP includes spending on

DURABLE GOODS, NONDURABLE GOODS, AND SERVICES

Macroeconomists study

ECONOMY-WIDE PHENOMENA

Social Security payments are

EXCLUDED FROM GDP BECAUSE THEY DO NOT REFLECT THE ECONOMY'S PRODUCTION

Net exports equal

EXPORTS MINUS IMPORTS

The consumer price index is used to monitor changes in an economy's production of goods and services over time

FALSE

The inflation rate is the absolute change in the price level from the previous period

FALSE

The inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index

FALSE

Bountiful Harvest Bakery buys $4.00 of flour from Grinkers' Mill and uses the flour to make bread sold to the public for $12.00. Taking these two transactions into account, what is the effect on GDP?

GDP INCREASES BY $12.00

GDP is used as the basic measure of a society's economic well-being of individuals in society is

GDP PER PERSON

Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is inclued

IN GERMANY GDP, BUT IS NOT INCLUDED IN U.S. GDP

Gross domestic product measures

INCOME AND EXPENDITURES

The term economists use to describe a situation in which the economy's overall price level is rising is

INFLATION

Refer to Table 23-7. From 1975 to 1976

INFLATION WAS 25% AND OUTPUT DID NOT GROW

Refer to Table 23-7. From 1976 to 1977

INFLATION WAS 33.3% AND OUTPUT GREW AT A RATE OF 20%

Income generated by a nation's domestic production

IS EQUAL TO ITS DOMESTIC PRODUCTION

GDP

IS USED TO MONITOR THE PERFORMANCE OF THE OVERALL ECONOMY AND IS THE SINGLE BEST MEASURE OF A SOCIETY'S ECONOMIC WELL-BEING.

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of

MARKET PRICES

The consumer price index is used to

MONITOR CHANGES IN THE COST OF LIVING OVER TIME

The CPI is calculated

MONTHLY

Which of the following always uses prices and quantities from the same period

NOMINAL GDP BUT NOT REAL GDP

Which of the following is correct?

NOMINAL GDP EQUALS REAL GDP IN THE BASE YEAR

The GDP deflator is the ratio of

NOMINAL GDP TO REAL GDP MULTIPLIED BY 100

Transfer payments are

NOT INCLUDED IN GDP BECAUSE THEY ARE NOT PAYMENTS FOR CURRENTLY PRODUCED GOODS OR SERVICES

Unemployment compensation is

NOT PART OF GDP BECAUSE IT IS A TRANSFER PAYMENT

The inflation rate is the

PERCENTAGE CHANGE IN THE PRICE LEVEL FROM ONE PERIOD TO ANOTHER

Which of the following is always measured in prices from a base-year?

REAL BUT NOT NOMINAL GDP

Which of the following agencies calculates the CPI

THE BUREAU OF LABOR STATISTICS

The inflation rate you are likely to hear on the nightly news is calculated from

THE CPI

Which entity within the U.S. government is responsible for computing and reporting the CPI?

THE DEPARTMENT OF LABOR

The CPI is a measure of the overall cost of

THE GOODS AND SERVICES PURCHASED BY A TYPICAL CONSUMER

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

THE PERCENTAGE OF THE LABOR FORCE THAT IS OUT OF WORK, AND DIFFERENCES IN AVERAGE INCOME FROM COUNTRY TO COUNTRY

Which of the following items is included in GDP?

THE SALE OF SERVICES SUCH AS THOSE PERFORMED BY A DOCTOR

Because the consumer price index reflects the goods and services bought by consumers better than the GDP deflator does, it is the more common gauge of inflation

TRUE

Economists use the term inflation to describe a situation in which the economy's overall price level is rising

TRUE

Inflation can be measured using either the GDP deflator or the consumer price index

TRUE

When the consumer price index falls, the typical family has to spend fewer dollars to maintain the same standard of living

TRUE

The consumer price index is used to

TURN DOLLARS FIGURES INTO MEANINGFUL MEASURES OF PURCHASING POWER

Refer to Table 23-7. Which of the following is not correct?

This economy experienced growth from 1975 to 1976

GDP is defined as the

VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED WITHIN A COUNTRY IN A GIVEN PERIOD OF TIME

In the equation Y = C+I+G+NX

Y represents the economy's total expenditure.