MACRO TEST 1- CHAP

A set of tires installed on a vehicle produced by an automobile factory is counted as: an intermediate good and its market price is not part of GDP. a finished good and its market price is not part of GDP. an intermediate good and its market price is part of GDP. a finished good and its market price is part of GDP.

A

A car produced by the American company GM in a plant located in Canada would be included in: U.S. GNP, but not U.S. GDP. U.S. GDP, but not U.S. GNP. both U.S. GDP and U.S. GNP. neither U.S. GDP nor U.S. GNP.

A

Business cycles are short-term movements in: real GDP around its long-term trend. nominal GDP around its long-term trend. the unemployment rate above and below zero. inflation around its long-term trend.

A

GDP in the United States was $14,119 billion in 2014 and grew to $14,660.4 billion in 2015. This represents an annual growth rate of: 3.8%. 1.04%. 3.7%. $541.4 billion.

A

If a country is experiencing inflation, it means that: nominal GDP is growing faster than real GDP. nominal GDP and real GDP are growing at the same rate. real GDP is growing faster than nominal GDP. nominal GDP is growing and real GDP is falling

A

If a country's nominal GDP increases by 5% between two years while its GDP deflator increases by 4%, the country's real GDP: increases by 1%. increases by 9%. decreases by 1%. decreases by 9%

A

In nations that have large underground, or illegal, sectors: GDP will underestimate total production in the economy. GDP will overestimate total production in the economy. GDP will provide an accurate account of production in the economy. poverty will be significantly greater than in countries with fewer illegal market activities

A

Increases in _____ are considered the best measure of increases in living standards because they measure increases in production. real GDP per capita consumer spending nominal GDP national wealth

A

Real GDP per capita is calculated as the total real GDP divided by the: total population. nominal GDP. GDP deflator. price level.

A

Suppose an economy produces only the three finished goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what was the real GDP in 2009? $25,260 $21,134 $20,134 $31,400

A

The most volatile spending component of GDP in the United States is: investment. consumption. government purchases. net exports.

A

The single best indicator of a recession is: negative real GDP growth. negative nominal GDP growth. increasing unemployment. falling prices

A

What are the components of the national spending approach to splitting GDP? consumption, investment goods, government purchases, and net exports private investment, sale of new and used goods, net exports, and transfer payments consumption expenditures, transfer payments, and government investment wages, rent, interest, and profit

A

What does a real GDP growth rate of 3% mean? Output is rising by 3%. The value of output is rising by 3%. The value of output per person is rising by 3%. Output per person is rising by 3%

A

What is the term for GDP when price levels are held constant? real GDP nominal GDP annual GDP aggregate GDP

A

Which of the following statements is TRUE about GDP? GDP does not account for the distribution of income in a country. GDP includes a negative adjustment for damage caused by pollution. GDP includes all known goods and services in the underground economy. GDP includes a positive adjustment for the value of leisure and well-being.

A

Which of the following would NOT be included in this year's GDP? Jim mows his neighbor's lawn as a favor. Sarah pays her accountant $200 to do her taxes. Tom and Amy pay $75 for a meal in a restaurant. Megan buys a new Coach purse.

A

Based on the data in the table, what is net exports in the economy of Europia? -$1,800 -$200 $1,000 $2,800

B

Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP from 2005 to 2006 was: '21%. 16%. 27%. 8%.

C

Gross domestic product is the market value of all: goods and services produced within a country in a year. finished goods and services produced by a country's permanent residents, wherever located, in a year. goods and services sold within a country in a year. finished goods and services produced within a country in a year.

The market value of all finished goods and services produced within a country in a year.