Chapter 15

The term economists use to describe a situation in which the economy's overall price level is rising is a. growth. b. inflation c. recession. d. expansion.

b. inflation

The percentage change in the price level from one period to another is called the a. growth rate. b. inflation rate. c. GDP deflator. d. unemployment rate.

b. inflation rate.

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being? a. The unemployment rate b. The inflation rate c. Gross domestic product d. The trade deficit

c. Gross domestic product

Government purchases include spending on goods and services by a. the federal government, but not by state or local governments. b. federal and state governments, but not by local governments. c. federal, state, and local governments. d. federal, state, and local governments, as well as household spending by employees of those governments.

c. federal, state, and local governments.

For an economy as a whole, a. wages must equal profit. b. consumption must equal income c. income must equal expenditure. d. consumption must equal saving.

c. income must equal expenditure.

GDP is defined as the a. value of all goods and services produced within a country in a given period of time b. value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. c. value of all final goods and services produced within a country in a given period of time. d. value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

c. value of all final goods and services produced within a country in a given period of time.

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist? a. The effect of taxes on the prices of airline tickets and the profitability of automobile-manufacturing firms b. The price of beef and wage differences between genders c. How consumers maximize utility and how prices are established in markets for agricultural products d. The percentage of the labor force that is out of work and differences in average income from country to country

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

Most goods and services produced at home a. and most goods and services produced illegally are included in GDP. b. are included in GDP while most goods and services produced illegally are excluded from GDP. c. are excluded from GDP while most goods and services produced illegally are included in GDP d. and most goods and services produced illegally are excluded from GDP.

d. and most goods and services produced illegally are excluded from GDP.

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called a. inventory goods. b. transitory goods. c. final goods. d. intermediate goods.

d. intermediate goods.

If real GDP doubles and the GDP deflator doubles, then nominal GDP a. remains constant. b. doubles. c. triples. d. quadruples.

d. quadruples.