Macroeconomics Exam 2

Refer to the information provided in the table to answer the question that follows. The value for gross private domestic investment in billions of dollars is: Durable goods: 800 Non presidential investment: 400 Federal purchases of goods: 300 Exports: 400 State and local purchases of goods: 200 Residential investment: 50 Services: 500 Imports: 250 Change in business inventories: −25 Nondurable goods: 700 A. 375. B. 425. C. 450. D. 300.

B. 425.

Refer to the information provided in the table to answer the question that follows. The value of government spending in billions of dollars is: Durable goods: 800 Nonresidential investment: 400 Federal purchases of goods: 300 Exports: 400 State and local purchases of goods: 200 Residential investment: 50 Services: 500 Imports: 250 Change in business inventories: −25 Nondurable goods: 700 A. 300. B. 500. C. 200. D. 100.

B. 500.

Refer to the information provided in the table to answer the question that follows. The value for gross private domestic investment in billions of dollars is: Federal purchases of goods: 800 Services: 500 Imports: 200 Change in business inventories: 40 Durable goods: 300 Nondurable goods: 600 Exports: 50 Residential investment: 200 State and local purchases: 200 Nonresidential investment: 650 A. 850. B. 890. C. 740. D. 810.

B. 890.

Which of the following is an example of a final good or​ service? A. Coffee beans Starbucks purchases to make coffee B. A computer purchased by Federal Express to track shipments C. Lumber purchased by a construction company to be used in building houses D. Wheat a bakery purchases to make bread

B. A computer purchased by Federal Express to track shipments

Refer to the information provided in the table below to answer the question that follows. Labor force participation rate - 75% Total population 16 years of age and older - 200 million Unemployment rate - 10% The total number of people employed is A. 117 million. B. 135 million. C. 153 million. D. 180 million.

B. 135 million.

Refer to the information provided in the table below to answer the question that follows. Labor force participation rate - 75% Total population 16 years of age and older - 200 million Unemployment rate - 10% The total number of people unemployed is A. 20 million. B. 15 million. C. 17 million. D. 13 million.

B. 15 million.

Which of the following would not be counted in​ 2016's GDP? A. The 2016 salary of a salesperson who sells used motorcycles B. The value of a 2008 boat you purchased from a boat dealer in 2016 C. The commissions earned by a real estate agent in selling condominiums built prior to 2016 D. The value of a refrigerator manufactured in 2016 but not sold in 2016

B. The value of a 2008 boat you purchased from a boat dealer in 2016

Which of the following is a good or service counted in​ GDP? A. used tires bought by a used car dealer to put on a car on his lot B. a new tire you buy for your personal car C. a used tire you buy for your personal car D. tires Ford buys to put on a car

B. a new tire you buy for your personal car

Refer to the information provided in the table to answer the question that follows. The value for net exports in billions of dollars is: Durable goods: 800 Nonresidential investment: 400 Federal purchases of goods: 300 Exports: 400 State and local purchases of goods: 200 Residential investment: 50 Services: 500 Imports: 250 Change in business inventories: −25 Nondurable goods: 700 A. 650. B. 800. C. 150. D. 250.

C. 150.

Refer to the information provided in the table to answer the question that follows. The value for disposable personal income in billions of dollars is: Depreciation: 40 Receipts of factor income from rest of world: 30 Government purchases: 100 Imports: 50 Payments of factor income to rest of world: 50 Net private domestic investment: 200 Personal income taxes: 120 Personal consumption expenditures: 600 Dividends: 20 Exports: 60 Amount of national income not going to households: 20 A. 990. B. 770. C. 750. D. 820.

C. 750.

In 2016 the change in business inventories is −​$70 billion and GDP is​ $200 billion. Final sales in 2016: A. are​ $130 billion. B. are​ $200 billion. C. are​ $270 billion. D. are​ $340 billion.

C. are​ $270 billion.

According to the Bureau of Economic​ Analysis, during the recession of 2007−​2009, household saving as a fraction of disposable personal income increased from a low of just over 1 percent in the first quarter of 2008 to 5 percent in the second quarter of 2009. All else​ equal, a higher saving rate would: A. increase MPC​, decrease MPS​, and decrease the multiplier so that changes in planned investment will have a smaller impact on equilibrium output. B. increase MPC​, decrease MPS​, and increase the multiplier so that changes in planned investment will have a larger impact on equilibrium output. C. decrease MPC​, increase MPS​, and decrease the multiplier so that changes in planned investment will have a smaller impact on equilibrium output. D. decrease MPC​, increase MPS​, and increase the multiplier so that changes in planned investment will have a larger impact on equilibrium output.

C. decrease MPC​, increase MPS​, and decrease the multiplier so that changes in planned investment will have a smaller impact on equilibrium output.

If​ Wanda's income is reduced to zero after she loses her​ job, her consumption will be​ ________ and her saving will be​ ________. A. less than​ zero; greater than zero B. less than​ zero; less than zero C. greater than​ zero; less than zero D. greater than​ zero; greater than zero

C. greater than​ zero; less than zero

Net investment equals: A. depreciation plus GDP. B. GDP minus final sales. C. gross investment minus depreciation. D. gross investment minus final sales.

C. gross investment minus depreciation.

Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. ​Today, Cheryl is A. a discouraged worker. B. employed. C. in the labor force. D. not in the labor force.

C. in the labor force.

If real GDP in 2016 using 2015 prices is higher than nominal GDP of​ 2016, then: A. nominal GDP in 2016 equals nominal GDP in 2015. B. prices in 2016 are higher than prices in the base year. C. prices in 2016 are lower than prices in the base year. D. real GDP in 2016 is larger than real GDP in 2015.

C. prices in 2016 are lower than prices in the base year. (END OF CHAPTER 6)

Suppose that planned investment is fixed in an economy. Now if all individuals attempt to save​ more, A. the aggregate saving function shifts​ up, equilibrium income​ decreases, but the effect on aggregate saving depends on the value of MPS. B. the aggregate saving function does not​ change; the amount of aggregate saving remains​ unchanged, but only equilibrium income decreases. C. the aggregate saving function shifts​ up, equilibrium income​ decreases, but aggregate saving remains the same. D. the aggregate saving function shifts​ up, aggregate saving​ increases, and equilibrium income decreases.

C. the aggregate saving function shifts​ up, equilibrium income​ decreases, but aggregate saving remains the same.

Refer to the information provided in the table to answer the question that follows. The value for personal income in billions of dollars is: Depreciation: 40 Receipts of factor income from rest of world: 30 Government purchases: 100 Imports: 50 Payments of factor income to rest of world: 50 Net private domestic investment: 200 Personal income taxes: 120 Personal consumption expenditures: 600 Dividends: 20 Exports: 60 Amount of national income not going to households: 20 A. 870. B. 890. C. 960. D. 950.

A. 870.

If unplanned business investment is​ $20 million and planned investment is​ $20 million, then actual investment is A. $200 million. B. −​$20 million. C. $20 million. D. $40 million.

D $40 million.

If MPC increases​, the value of the investment multiplier.....

Increases

Refer to the information provided in the table to answer the question that follows. The value for national income in billions of dollars is: Depreciation: 40 Receipts of factor income from rest of world: 30 Government purchases: 100 Imports: 50 Payments of factor income to rest of world: 50 Net private domestic investment: 200 Personal income taxes: 120 Personal consumption expenditures: 600 Dividends: 20 Exports: 60 Amount of national income not going to households: 20 A. 890. B. 970. C. 910. D. 940.

A. 890.

Refer to the information provided in the table to answer the question that follows. The value for GNP in billions of dollars is: Depreciation: 40 Receipts of factor income from rest of world: 30 Government purchases: 100 Imports: 50 Payments of factor income to rest of world: 50 Net private domestic investment: 200 Personal income taxes: 120 Personal consumption expenditures: 600 Dividends: 20 Exports: 60 Amount of national income not going to households: 20 A. 930. B. 980. C. 900. D. 1,010.

A. 930.

Which of the following is included in both the U.S. GDP and​ GNP? A. The value of all cars produced by General Motors in the U.S. B. The value of all cars produced by Toyota in the U.S. C. The value of all cars produced by Ford in Mexico. D. The value of cars produced by Nissan in Japan and the U.S.

A. The value of all cars produced by General Motors in the U.S.

In a simple economy with no​ government, aggregate expenditure is A. consumption plus investment. B. consumption plus the MPC. C. MPC​ + MPS. D. saving plus investment.

A. consumption plus investment.

In 2016 final sales equal​ $200 billion, and the change in business inventories is​ $50 billion. GDP in 2016: A. is​ $250 billion. B. is​ $200 billion. C. is​ $150 billion. D. is​ $40 billion.

A. is​ $250 billion.

Which of the following would be counted in​ 2016's GDP? A. the bonus check a stockbroker gets from​ his/her company in 2016 B. the value of a loan you take in 2016 C. the value of a bond sold by the federal government D. the value of a TV that was produced in 2015 but not sold until 2016

A. the bonus check a stockbroker gets from​ his/her company in 2016

The MPC is A. the change in consumption divided by the change in income. B. the change in saving divided by the change in income. C. the change in consumption divided by the change in saving. D. consumption divided by income.

A. the change in consumption divided by the change in income.

Gross national product is the total market value of: A. all final and intermediate goods and service produced by resources owned by a country in a given year. B. all final goods and services produced by resources owned by a​ country, regardless of where production takes place. C. all final goods and services produced in a country in a given​ year, regardless of who owns the resources. D. all final and intermediate goods and services produced in a​ country, regardless of who owns the resources.

B. all final goods and services produced by resources owned by a​ country, regardless of where production takes place.

Which of the following is subtracted from national income to get to personal​ income? A. personal Taxes B. retained earnings C. depreciation D. personal interest income

B. retained earnings

If planned investment exceeds actual​ investment, A. there will be an accumulation of inventories. B. there will be a decline in inventories. C. there will be no change in inventories. D. none of the above

B. there will be a decline in inventories.

Diane lost her job and immediately started looking for another job. As a result the A. unemployment rate remains constant. B. unemployment rate increases. C. labor force decreases. D. labor force increases.

B. unemployment rate increases.

Refer to the information provided in the table to answer the question that follows. The value of gross domestic product in billions of dollars is: Durable goods: 800 Nonresidential investment: 400 Federal purchases of goods: 300 Exports: 400 State and local purchases of goods: 200 Residential investment: 50 Services: 500 Imports: 250 Change in business inventories: −25 Nondurable goods: 700 A. 3,750. B. 3,125. C. 3,000. D. 3,075.

D. 3,075.

If the number of people classified as unemployed is​ 20,000 and the number of people classified as employed is​ 400,000, what is the unemployment​ rate? A. 5.0% B. 2.0% C. 9.2% D. 4.8%

D. 4.8%

If the labor force is​ 320,000 and the total population 16 years of age or older is​ 400,000, the​ labor-force participation rate is A. 76%. B. 72%. C. 88%. D. 80%.

D. 80%.

Refer to the information provided in the table to answer the question that follows. The value for NNP in billions of dollars is: Depreciation: 40 Receipts of factor income from rest of world: 30 Government purchases: 100 Imports: 50 Payments of factor income to rest of world: 50 Net private domestic investment: 200 Personal income taxes: 120 Personal consumption expenditures: 600 Dividends: 20 Exports: 60 Amount of national income not going to households: 20 A. 970. B. 910. C. 940. D. 890.

D. 890.

What should be subtracted from GDP to calculate national​ income? A. indirect taxes B. net factor payments to the rest of the world C. personal income taxes D. depreciation

D. depreciation

Interest paid by households and by the government is: A. counted in national​ income, but not in GDP. B. Included in both GDP and GNP because it represents an expenditure by one group and a receipt of income by another group. C. not counted in GDP but is counted in GNP because it is paid by U.S. citizens to people living in the United States. D. not counted in GDP because it is not assumed to flow from the production of goods and services.

D. not counted in GDP because it is not assumed to flow from the production of goods and services.

The MPC is A. income divided by saving. B. 1​ + MPC C. total saving divided by total income. D. the change in saving divided by the change in income.

D. the change in saving divided by the change in income.

If no foreign companies produce in a​ country, but many of the​ country's companies produce​ abroad, then: A. the​ country's GDP will tend to exceed its GNP. B. the​ country's GDP will tend to be equal to its domestic income. C. the​ country's GNP and GDP will tend to be equal. D. the​ country's GNP will tend to exceed its GDP.

D. the​ country's GNP will tend to exceed its GDP.