Macro Final Questions

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

a. Y represents the economy's total expenditure.

8. Which of the following is an example of a durable good?

a. a hair dryer.

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?

b. GDP increases by $5.00.

Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct?

b. Only Joe's and Jim's grocery store purchases are included in GDP.

Which of the following statements about GDP is correct?

d. All of the above are correct.

In a simple circular-flow diagram, total income and total expenditure are

d. always equal because every transaction has a buyer and a seller.

The basic tools of supply and demand are

d. central to macroeconomic analysis as well as to microeconomic analysis.

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

d. the percentage of the labor force that is out of work, and differences in average income from country to country