2. The data of macroeconomics

70. In 2010, American net borrowings from abroad, per person, in current dollars, amounted to approximately:

$1,675

57. If total consumption (measured in billions of current dollars) equals $3,657, consumption of durable goods is $480, and consumption of nondurable goods is $1,194, then consumption of services is:

$1,983

42. If the GDP deflator in 2009 equals 1.25 and nominal GDP in 2009 equals $15 trillion, what is the value of real GDP in 2009?

$12 trillion

28. Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

$12,000

66. In 2010, the GDP of the United States totaled about:

$14.5 trillion

109. A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the baker uses the flour to make bread and sells the bread for $6. The value added by the miller is:

$2

25. Assume that a rancher sells McDonald's a quarter-pound of meat for $1 and that McDonald's sells you a hamburger made from that meat for $2. In this case, the value included in GDP should be:

$2

26. Assume that a tire company sells 4 tires to an automobile company for $400, another company sells a compact disc player for $500, and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount from these transactions that should be counted in GDP is:

$20,000

67. In 2010, GDP per person in the United States was approximately:

$47,000

39. Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

$6.50

18. Assume that total output consists of 4 apples and 6 oranges and that apples cost $1 each and oranges cost $0.50 each. In this case, the value of GDP is:

$7

63. If GDP (measured in billions of current dollars) is $5,465 and the sum of consumption, investment, and government purchases is $5,496, while exports equal $673, imports are:

$704

69. In 2010 in the United States, total government purchases per person (in current dollars) amounted to approximately:

$9,700

52. If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and government purchases are $1,098, then net exports are:

-$31

59. If total investment (measured in billions of current dollars) equals $741, business fixed investment is $524, and residential fixed investment is $222, then inventory investment is:

-$5

98. The labor-force participation rate is the percentage of the:

adult population that is in the labor force

94. According to the definition used by the U.S. Bureau of Labor Statistics, people are considered to be unemployed if they:

do not have a job, but have looked for work in the past 4 weeks

31. Imputed values included in GDP are the:

estimated value of goods and services that are not sold in the marketplace

81. The core inflation rate:

excludes food and energy prices

3. GDP is all of the following except the total:

expenditure of everyone in the economy.

4. The total income of everyone in the economy is exactly equal to the total:

expenditure on the economy's output of goods and services

6. All of the following are measures of GDP except the total:

expenditures of all businesses in the economy

62. In the national income accounts, net exports equal:

exported goods and services minus imported goods and services

61. In the national income accounts, government purchases are goods and services purchased by:

federal, state, and local governments

16. GDP is the market value of all ______ goods and services produced within an economy in a given period of time.

final

30. To avoid double counting in the computation of GDP, only the value of ______ goods are included.

final

107. An estimate of the number of unemployed workers in the economy can be obtained from:

from the household survey, but not from the establishment survey.

82. Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation

gives a better measure of ongoing, sustained price changes.

17. To compute the value of GDP:

goods and services are valued at market prices

15. The market value of all final goods and services produced within an economy in a given period of time is called:

gross domestic product

23. Assume that a bakery hires more workers and pays them wages and that the workers produce more bread. GDP increases in all of the following cases except when the bread:

grows stale and is thrown away

32. An example of an imputed value in the GDP is the:

housing services enjoyed by homeowners

85. Unlike the GDP deflator, the CPI includes the prices of:

imported goods

34. The underground economy:

includes domestic workers for whom Social Security tax is not collected

10. Which of the following is a flow variable?

income

7. It is a national income accounting rule that all expenditure on purchases of products is necessarily equal to:

income of the producers of the products

5. An economy's ______ equals its ______.

income; expenditure on goods and services

46. If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent, then real GDP ______ by ______ percent.

increased; 2

58. In the national income accounts, goods bought for future use are classified as which type of expenditure?

investment

24. When bread is baked but put away for later sale, this is called:

investment in inventory

76. Disposable personal income:

is computed by subtracting personal tax and nontax payments from personal income

93. According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

is going to school full time

21. When a firm sells a product out of inventory, GDP:

is not changed

111. A woman marries her butler. Before they were married, she paid him $60,000 per year. He continues to wait on her as before (but as a husband rather than as a wage earner). She earns $1,000,000 per year both before and after her marriage. If GDP were changed so that it truly measured the sum of all final economic activity, the marriage would:

leave GDP unchanged

48. Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

measures changes in the quantity of goods and services produced by holding prices constant

72. Net national product equals GDP:

minus depreciation

71. GNP equals GDP ______ income earned domestically by foreigners ______ income that nationals earn abroad.

minus; plus

50. The new chain-weighted measures of real GDP are an improvement over traditional measures because the prices used to compute real GDP are:

never far out of date

55. In the national income accounts, consumption expenditures include all of the following except household purchases of:

new residential housing

95. The labor force equals the:

number of employed and unemployed individuals

106. A worker with two jobs is counted:

once in the household survey, but twice in the establishment survey

91. The panel of economists appointed by the Senate Finance Committee estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.

overestimates; 1

112. A fixed-weight price index like the CPI ______ the change in the cost of living because it ______ take into account that people can substitute less expensive goods for ones that have become more expensive.

overestimates; does not

60. In the national income accounts, all of the following are classified as government purchases except:

payments made to Social Security recipients

65. The investment component of GDP includes all of the following except:

purchases of corporate stock

40. The best measure of the economic satisfaction of the members of a society is:

real GDP

33. In principle, the GDP accounts should—but do not—have an imputation for:

rental services of automobiles driven by owners

14. The amount of capital in an economy is a ______ and the amount of investment is a ______.

stock; flow

90. When prices of different goods are increasing by different amounts, the price index that will rise the fastest is:

the CPI

84. An increase in the price of imported goods will show up in:

the CPI but not in the GDP deflator

83. An increase in the price of goods bought by firms and the government will show up in:

the GDP deflator but not in the CPI

12. All of the following are a stock except:

the government budget deficit

13. All of the following are a flow except:

the government debt

103. In the United States since the end of World War II:

the labor force participation rate of men has decreased, while the labor force participation rate of women has increased

78. The CPI is determined by computing:

the price of a fixed basket of goods and services, relative to the price of the same basket in a base year

43. The GDP deflator is equal to:

the ratio of nominal GDP to real GDP.

105. The employment statistics computed from the establishment survey do not include:

the self-employed

27. The value added of an item produced refers to:

the value of a firm's output less the value of the intermediate goods that the firm purchases

29. In computing GDP,

the value of intermediate goods is included in the market price of the final goods

8. Two equivalent ways to view GDP are as the:

total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

20. Since GDP includes only the additions to income, not transfers of assets, ______ are not included in the computation of GDP.

used goods

11. Which of the following is a stock variable?

wealth

79. Prices of items included in the CPI are:

weighted according to quantity of the item purchased by the typical household

100. If an increasing proportion of the adult population is retired, then the labor force participation rate:

will decrease

102. If the number employed increases while the number unemployed does not change, the unemployment rate:

will decrease

104. The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers ______, while the establishment survey provides estimates of the number of workers ______.

with jobs; on firms' payrolls

80. Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $0.50 in 2009. If 10 apples and 5 oranges were purchased in 2002, and 5 apples and 10 oranges were purchased in 2009, the CPI for 2009, using 2002 as the base year, is:

1.25

41. If nominal GDP in 2009 equals $14 trillion and real GDP in 2009 equals $11 trillion, what is the value of the GDP deflator?

1.27

19. All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

2001 Jeep Cherokee

88. The CPI is a:

Laspeyres price index

77. According to the usual seasonal pattern of the U.S. economy, GDP is highest in the quarter of the year that includes:

October, November, and December

89. The GDP deflator is a:

Paasche price index

64.All of the following actions are investments in the sense of the term used by macroeconomists except:

Sandra Santiago's buying 100 shares of IBM stock.

51. The national income accounts identity, for an open economy, is:

Y = C + I + G + NX

49. Chain-weighted measures of real GDP make use of prices from:

a continuously changing base year

74. National income differs from net national product by an amount called:

a statistical discrepancy

86. Assume that the market basket of goods and services purchased in 2004 by the average family in the United States costs $14,000 in 2004 prices, whereas the same basket costs $21,000 in 2009 prices. However, the basket of goods and services actually purchased by the average family in 2009 costs $20,000 in 2009 prices, whereas this same basket would have cost $15,000 in 2004 prices. Given this data, a Laspeyres price index of 2009 prices using 2004 as the base year would be:

1.50

44. Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 5 in 2009, then the GDP deflator in 2009, using a base year of 2002, was approximately:

1.7

73. As a percentage of GNP, depreciation (also called the consumption of fixed capital) amounts to approximately:

10 percent

45. If nominal GDP grew by 5 percent and real GDP grew by 3 percent, then the GDP deflator grew by approximately ______ percent.

2

99. If the unemployment rate is 6 percent and the number of employed is 188 million, then the labor force equals ______ million.

200

54. If real GDP grew by 6 percent and population grew by 2 percent, then real GDP per person grew by approximately ______ percent.

4

97. If 7 million workers are unemployed, 143 million workers are employed, and the adult population equals 200 million, then the unemployment rate equals approximately ______ percent.

4.7

101. If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate equals ______ percent.

60

92. The number of households interviewed in the monthly employment survey of the U.S. Bureau of Labor Statistics is approximately:

60,000

68. In 2010 in the United States, the approximate percentage of GDP that was spent on consumption was:

67 percent

96. Assume that the adult population of the United States is 191.6 million, total employment is 117.6 million, and 9.4 million are unemployed. Then the unemployment rate, as normally computed, is approximately ______ percent.

7.4

1. The economic statistic used to measure the level of prices is:

CPI

2. The statistic used by economists to measure the value of economic output is:

GDP

87. Assume that the market basket of goods and services purchased in 2004 by the average family in the United States costs $14,000 in 2004 prices, whereas the same basket costs $21,000 in 2009 prices. However, the basket of goods and services actually purchased by the average family in 2009 costs $20,000 in 2009 prices, whereas this same basket would have cost $15,000 in 2004 prices. Given these data, a Paasche index for 2009 using 2004 prices would be:

approximately 1.07

9. In the circular flow model, the flow of dollars from firms to households is paid _____ and the flow of dollars from households to firms is paid _____.

as wages and profits; for goods and services

108. An estimate of total employment in the economy can be obtained from:

both the household and establishment surveys

75. The largest component of national income is:

compensation of employees

38. Real GDP means the value of goods and services is measured in ______ prices.

constant

35. Real GDP is measured in _____ dollars ____ time.

constant; per unit of

56. In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

consumption.

37. Nominal GDP means the value of goods and services is measured in ______ prices.

current

47. Nominal GDP measures the value of goods and services in ______ prices, while real GDP measures the value of goods and services in ______ prices.

current; constant

36. Nominal GDP is measured in _____ dollars _____ time.

current; per unit of

22. When a firm sells a product out of inventory, investment expenditures ______ and consumption expenditures ______.

decrease; increase

110. A woman marries her butler. Before they were married, she paid him $60,000 per year. He continues to wait on her as before (but as a husband rather than as a wage earner). She earns $1,000,000 per year both before and after her marriage. The marriage:

decreases GDP by $60,000