Economics Exam Nov 2
A painter pays $500 for paint he uses to repaint a house. He then present a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?
$1200
In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?
$1230
In the economy of Ukzten, in 2010, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350. What was Ukzten's GDP in 2010?
$1750
Refer to Table 24-1. The cost o the basket in 2005 was
$200
Refer to Table 24-1. The cost of the basket in 2006 was
$240
A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute
$250 to GDP
In the economy of Ukzten in 2010, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?
$6800
Refer to table 23-3. What was the growth rate of real GDP for 1931?
-6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.
Refer to table 23-3. What was the growth rate of real GDP for 1930?
-8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
In the base year, the GDP deflator is always
100
Refer to Table 24-1. If 2005 is the base year, then the CPI for 2005 was
100
Refer to Table 24-1. If 2006 is the base year then the CPI for 2006
100
Refer to Table 24-1. If 2005 is the base year, then the CPI for 2006 was
120
Refer to Table 24-1. If 2005 is the base year, then the inflation rate in 2006 was
20 percent
Refer to Table 24-1. If 2006 is the base year, then the inflation rate in 2006 was
20 percent
Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much GDP?
4 MILLION
Refer to table 23-3. What is the GDP deflator and the inflation rate for 1932?
8.09,-11.7
Refer to table 23-3. If prices had remained constant between 1929 and 1930, GDP would have decreased
8.62%
Refer to Table 24-1. If 2006 is the base year, then the CPI for 2005 was
83.3
Refer to table 23-3. What is the GDP deflator and the inflation rate for 1931?
9.6,-10.3
The CPI is a measure of the overall cost of goods and services bought by
A TYPICAL CONSUMER
Which of the following is a way to compute GDP
ADD UP THE MARKET VALUES OF ALL FINAL GOODS AND SERVICES
GDP is equal
ALL OF THE ABOVE ARE CORRECT
GDP is not a perfect measure of well-being; for example,
ALL OF THE ABOVE ARE CORRECT
Which of the following statements about GDP is correct?`
ALL OF THE ABOVE ARE CORRECT
Which of the following domestically produced items is not included in GDP?
ALL OF THE ABOVE ARE INCLUDED IN GDP
Which of the following is included in the consumption component of GDP?
ALL OF THE ABOVE ARE INCLUDED IN THE CONSUMPTION COMPONENT OF GDDP.
Spots, Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called
AN INTERMEDIATE GOOD
Expenditures on a nation's domestic production
ARE EQUAL TO ITS DOMESTIC PRODUCTION
GDP per person tells us the income and expenditure of the
AVERAGE PERSON IN THE ECONOMY
The consumption component of GDP includes spending on
DURABLE GOODS, NONDURABLE GOODS, AND SERVICES
Macroeconomists study
ECONOMY-WIDE PHENOMENA
Social Security payments are
EXCLUDED FROM GDP BECAUSE THEY DO NOT REFLECT THE ECONOMY'S PRODUCTION
Net exports equal
EXPORTS MINUS IMPORTS
The consumer price index is used to monitor changes in an economy's production of goods and services over time
FALSE
The inflation rate is the absolute change in the price level from the previous period
FALSE
The inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index
FALSE
Bountiful Harvest Bakery buys $4.00 of flour from Grinkers' Mill and uses the flour to make bread sold to the public for $12.00. Taking these two transactions into account, what is the effect on GDP?
GDP INCREASES BY $12.00
GDP is used as the basic measure of a society's economic well-being of individuals in society is
GDP PER PERSON
Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is inclued
IN GERMANY GDP, BUT IS NOT INCLUDED IN U.S. GDP
Gross domestic product measures
INCOME AND EXPENDITURES
The term economists use to describe a situation in which the economy's overall price level is rising is
INFLATION
Refer to Table 23-7. From 1975 to 1976
INFLATION WAS 25% AND OUTPUT DID NOT GROW
Refer to Table 23-7. From 1976 to 1977
INFLATION WAS 33.3% AND OUTPUT GREW AT A RATE OF 20%
Income generated by a nation's domestic production
IS EQUAL TO ITS DOMESTIC PRODUCTION
GDP
IS USED TO MONITOR THE PERFORMANCE OF THE OVERALL ECONOMY AND IS THE SINGLE BEST MEASURE OF A SOCIETY'S ECONOMIC WELL-BEING.
Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of
MARKET PRICES
The consumer price index is used to
MONITOR CHANGES IN THE COST OF LIVING OVER TIME
The CPI is calculated
MONTHLY
Which of the following always uses prices and quantities from the same period
NOMINAL GDP BUT NOT REAL GDP
Which of the following is correct?
NOMINAL GDP EQUALS REAL GDP IN THE BASE YEAR
The GDP deflator is the ratio of
NOMINAL GDP TO REAL GDP MULTIPLIED BY 100
Transfer payments are
NOT INCLUDED IN GDP BECAUSE THEY ARE NOT PAYMENTS FOR CURRENTLY PRODUCED GOODS OR SERVICES
Unemployment compensation is
NOT PART OF GDP BECAUSE IT IS A TRANSFER PAYMENT
The inflation rate is the
PERCENTAGE CHANGE IN THE PRICE LEVEL FROM ONE PERIOD TO ANOTHER
Which of the following is always measured in prices from a base-year?
REAL BUT NOT NOMINAL GDP
Which of the following agencies calculates the CPI
THE BUREAU OF LABOR STATISTICS
The inflation rate you are likely to hear on the nightly news is calculated from
THE CPI
Which entity within the U.S. government is responsible for computing and reporting the CPI?
THE DEPARTMENT OF LABOR
The CPI is a measure of the overall cost of
THE GOODS AND SERVICES PURCHASED BY A TYPICAL CONSUMER
Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
THE PERCENTAGE OF THE LABOR FORCE THAT IS OUT OF WORK, AND DIFFERENCES IN AVERAGE INCOME FROM COUNTRY TO COUNTRY
Which of the following items is included in GDP?
THE SALE OF SERVICES SUCH AS THOSE PERFORMED BY A DOCTOR
Because the consumer price index reflects the goods and services bought by consumers better than the GDP deflator does, it is the more common gauge of inflation
TRUE
Economists use the term inflation to describe a situation in which the economy's overall price level is rising
TRUE
Inflation can be measured using either the GDP deflator or the consumer price index
TRUE
When the consumer price index falls, the typical family has to spend fewer dollars to maintain the same standard of living
TRUE
The consumer price index is used to
TURN DOLLARS FIGURES INTO MEANINGFUL MEASURES OF PURCHASING POWER
Refer to Table 23-7. Which of the following is not correct?
This economy experienced growth from 1975 to 1976
GDP is defined as the
VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED WITHIN A COUNTRY IN A GIVEN PERIOD OF TIME
In the equation Y = C+I+G+NX
Y represents the economy's total expenditure.