econ 202 quiz 1

The concept of opportunity cost

can be applied to the analysis of any decision-making process

Which of the following is a topic studied in macroeconomics? a) Gross domestic product d) The amount of pizza produced b) The wage of auto workers e) All of the above c) The price of IBM computers

gross domestic product

The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.

GNP;GDP

GDP is not a perfect measure of social welfare and the society's economic well-being because

a) it does not say anything about the distribution of income. b) GDP accounting rules do not adjust for production that causes negative externalities. c) it does not include all economic activities in the economy. d) all of the above.

A prolonged and deep recession is called

depression

A period during which aggregate output rises is known as a(n)

expansion

Economics is the study of

how society uses limited resources

Gross domestic product measured in current dollars is called ______ GDP

nominal

Which of the following would be counted in 2020's GDP? a) The value of a loan you take in 2020 b) The value of a TV that was produced in 2015 but not sold until 2020 c) The bonus check a stockbroker gets from his/her company in 2020 d) The value of a bond sold by the federal government in 2020 e) All of the above would be counted in 2020's GDP.

the bonus check a stockbroker gets from his/her company in 2020

GDP includes

the value of all final goods and services

Assume that total output consists of 5 apples and 6 oranges and that apples cost $1 each while oranges cost $0.50 each. In this case, the value of GDP is:

$8

Assume that apples cost $0.50 each in 2012 and $1 in 2020, while oranges cost $1 each in 2012 and $1.50 in 2020. If 8 apples were produced in 2012 and 9 in 2020, while 4 oranges were produced in 2012 and 5 in 2020, then real GDP (in 2012 prices) in 2020 was:

$9.50

If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is

133.33

According to Keynes, the level of employment is determined by

the level of aggregate demand for goods and services

In the U.S., the single largest expenditure component in GDP is

Consumption

Which of the following is an example of a final good or service? a) Wheat a bakery purchases to make bread b) Coffee beans Starbucks purchases to make coffee c) Lumber purchased by a construction company to use in building houses d) A computer purchased by Federal Express to track shipments e) None of the above is an example of a final good or service.

a computer purchased by Federal Express to track shipments

Which of the following is included in both the U.S. GDP and GNP? a) The value of all cars produced by Ford in Mexico. b) The value of all cars produced by General Motors in the U.S. c) The value of all cars produced by Toyota in the U.S. d) The value of cars produced by Nissan in Japan and the U.S.

The value of all cars produced by general motors in the U.S.

inflation and unemployment

are a focus of macroeconomics

Real GDP is gross domestic product measured

in the prices of a base year

Suppose the economy suffers a high rate of unemployment. According to Keynesian economists, the government should increase employment by

increase government spending

An increase in the overall price level is known as

inflation

according to Classical economists, the economy

is self-correcting

Studying how Joshua allocates his time between school and video games is an example of

microeconomics

An improvement in technology will cause the a) production possibility frontier to shift outward. b) production possibility frontier to shift inward. c) economy to move down the production possibility frontier. d) economy to move closer to its production possibility frontier.

production possibility frontier to shift outward

Nominal GDP was $600 billion in 2006 and $800 billion in 2018. If prices doubled between 2006 and 2018, then:

real 2018 GDP (in 2006 prices) was $400

Since 1970, the U.S. economy has experienced six

recessions

the reason that opportunity cost arise is that

resources are scarce

unemployment generally ________ during recessions and ________ during expansions.

rises;falls

Prices that do not always adjust rapidly to maintain equality between quantity supplied andquantity demanded are

sticky prices

Which of the following is NOT an opportunity cost of attending college? a) The tuition you pay b) The income you could have earned if you didn't attend college c) The alternative uses of the time you spend studying d) The cost of the food that you consume while you are attending college

the cost of food that you consume while attending college

"Double counting" in the calculation of GDP occurs when:

the value of intermediate inputs - such as flour for baking pastries - is included.

You own the Star Wars six DVD set. The opportunity cost of watching these DVDs for thesecond time a) is the value of the alternative use of the time you spend watching the DVDs. b) is one-half the cost of the DVDs, as this is the second time you have watched it. c) is zero. d) cannot be calculated.

the value of the alternative use of the time you spend watching the DVDs.

Unemployment implies that in the labor market

there is an excess supply of labor

It has become conventional to classify an economic downturn as a recession when aggregate output declines for a) three consecutive quarters. b) a year. c) two consecutive quarters. d) six consecutive quarters

two consecutive quarters

The GDP deflator in year 2 is 110 using year 1 as a base year. This means that, on average, the price of goods and services is

10% higher in year 2 than in year 1.

per capita gross national income (GNI) decreases when

GNI does not change and the population increases

Who is considered as the founding father of macroeconomics?

John Maynard Keynes