Macro (HW 2)

Nominal GDP is​ ______. Real GDP is​ ______. A. the value of the final goods and services produced in a given year valued at the prices of that year​; the value of final goods and services produced in a given year when valued at the prices of a reference base year B. the value of final goods and services produced in a given year when valued at the prices of a reference base​ year; the value of the final goods and services produced in a given year valued at the prices of that year C. the value of the final goods and services produced in a given year valued at the prices of that​ year; a more precise name for GDP D. another name for real GDP​; calculated as the quantity produced in the base year multiplied by the prices that prevailed in the given year

the value of the final goods and services produced in a given year valued at the prices of that year​; the value of final goods and services produced in a given year when valued at the prices of a reference base year; A

When we use PPP we can make valid international comparisons of real GDP because​ ______. A. we use data that is calculated at the market exchange rate B. we calculate the value of goods and services produced in two countries using the same quantities C. we use the price data provided by the two countries but not the quantities D. we calculate the value of goods and services produced in two countries using the same prices

we calculate the value of goods and services produced in two countries using the same prices; D

Depreciation is the​ _____ in the value of​ _____ that results from its use and from obsolescence. A. ​increase; land B. ​decrease; residual assets C. ​decrease; capital D. ​decrease; the dollar

​decrease; capital; C

Net exports of goods and services is the value of​ _____ of goods and services​ _____ the value of​ _____ of goods and services. A. ​imports; minus; exports B. ​exports; minus; imports C. ​exports; plus; imports D. ​exports; times; imports

​exports; minus; imports; B

Real GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices in​ _____ year. Nominal GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices of ​ _____ year. A. ​final; that​ same; ​final; a base B. ​final; that​ same; ​intermediate; a base C. ​final; a​ base; ​final; that same D. ​intermediate; a​ base; ​final; that same

​final; a​ base; ​final; that same; C

Gross domestic product ​(GDP​) is the market value of all the​ _____ goods and services produced​ _____ a country in a given time period. A. ​final; within B. ​final; outside C. ​intermediate; within D. ​intermediate; outside

​final; within

Imports of goods and services are items that​ _____ in the United States​ _____ the rest of the world. A. households and​ governments, but not​ firms; sell to B. ​households, firms, but not​ governments; buy from C. firms and​ governments, but not​ households; sell to D. ​households, firms, and​ governments; buy from

​households, firms, and​ governments; buy from; D

Potential GDP is the value of real GDP when all the​ economy's factors of production​ - _____,​ _____, _____, and​ _____ - are fully​ _____. A. ​wages; rent;​ interest; profits; optimized B. ​labor; capital;​ land; entrepreneurial​ ability; employed C. ​labor; capital;​ stocks; bonds; employed D. average​ costs; marginal​ costs; variable​ costs; fixed​ costs; minimized

​labor; capital;​ land; entrepreneurial​ ability; employed; B

The business cycle is a​ _____ but​ _____ up-and-down movement of total​ _____ and other measures of economic activity. A. ​periodic; irregular; consumption B. ​periodic; irregular; production C. ​occasional; regular; production D. ​occasional; regular; consumption

​periodic; irregular; production; B

Net domestic income at factor cost​ _______ indirect taxes less subsidies​ _______ depreciation gives GDP​ (income approach). A. ​plus; minus B. ​minus; minus C. ​plus; plus D. ​minus; plus

​plus; plus; C

Which of the following is an example of investment​? A. Continental buying Airbus planes B. Ron buying stocks and bonds. C. Mike buying an Apple iPad D. Randy buying a BMW

Continental buying Airbus planes; A

Which of the following is an example of a final good or service​? A. Dell buys Intel chips. B. GM buys Firestone tires. C. PCL construction company buys Lafarge cement. D. Dan bought a Toyota Camry.

Dan bought a Toyota Camry; D

Choose the correct statement. A. Nominal GDP is just a more precise name for GDP. B. When nominal GDP increases, real GDP decreases. C. We measure the change in production by comparing nominal GDP in one year with nominal GDP in another year. D. Nominal GDP is the value of final goods and services produced in a given year when valued at prices of a reference base year.

Nominal GDP is just a more precise name for GDP; A

Which of the following is an example of consumption expenditure​? A. Peter buying stocks. B. Mary buying a house. C. United buying Dell PCs. D. Rachel buying a TV.

Rachel buying a TV; D

Which of the following is an example of an intermediate good or service​? A. United buys Boeing aircrafts. B. Samsung buys compressors for manufacturing refrigerators. C. Sarah bought a Sony HDTV. D. Mike bought Puma shoes.

Samsung buys compressors for manufacturing refrigerators; B

Which of the following is an example of government expenditure on goods and services​? A. Apple outsourcing the manufacture of iPhones. B. The Indian government lowering import tariffs. C. The White House buying internet services. D. The U.S. government lowering the interest rate.

The White House buying internet services; C

A business cycle is​ _______. A. the periodic growth cycle of potential GDP B. a periodic but irregular​ up-and-down movement of total production and other measures of economic activity C. the​ regular, predictable cycle of potential GDP D. a​ regular, predictable cycle of total production and other measures of economic activity

a periodic but irregular​ up-and-down movement of total production and other measures of economic activity; B

GDP is calculated by​ _________. A. adding indirect taxes less subsidies to total income and subtracting depreciation B. subtracting indirect taxes less subsidies from total income and adding depreciation C. adding indirect taxes less subsidies and depreciation to total income D. subtracting indirect taxes less subsidies and depreciation from total income

adding indirect taxes less subsidies and depreciation to total income; C

Gross domestic product and gross investment are measured​ ______. Net domestic product and net investment are measured​ ______. A. excluding​ exports; including exports B. excluding net​ exports; including net exports C. after the depreciation of​ capital; before the depreciation of capital D. before the depreciation of​ capital; after the depreciation of capital

before the depreciation of​ capital; after the depreciation of capital; D

The total amount spent​ _____ is called gross investment. A. buying new capital B. buying goods and services C. both buying new capital and replacing depreciated capital D. replacing depreciated capital

both buying new capital and replacing depreciated capital; C

The income approach to measuring GDP sums together​ ______, which equals net domestic income at factor cost. A. compensation of​ employees, net​ interest, rental​ income, corporate​ profits, and​ proprietors' income B. compensation of​ employees, direct​ taxes, and consumption of fixed capital C. consumption​ expenditure, investment, government expenditure on goods and​ services, and net exports D. compensation of​ employees, net​ interest, rental​ income, and​ proprietors' income

compensation of​ employees, net​ interest, rental​ income, corporate​ profits, and​ proprietors' income; A

Which of the following are included in the expenditure approach to calculating​ GDP? A. consumption expenditure​; government expenditure​; depreciation B. investment​; depreciation​; compensation of employees C. government expenditure​; investment​; net domestic income at factor cost D. consumption expenditure​; government expenditure​; investment; D

consumption expenditure​; government expenditure​;

The expenditure approach to measuring GDP sums together​ ______, and the largest component is​ ______. A. consumption​ expenditure, investment, government expenditure on goods and​ services, and net​ exports; consumption expenditure B. consumption​ expenditure, investment, government expenditure on goods and​ services, and net​ exports; government expenditure on goods and services C. compensation of​ employees, net​ interest, rental​ income, proprietors'​ income, and corporate​ profits; compensation of employees D. net domestic income at factor​ cost, indirect taxes less​ subsidies, and​ depreciation; net domestic income at factor cost

consumption​ expenditure, investment, government expenditure on goods and​ services, and net​ exports; consumption expenditure; A

Real GDP per person is real GDP​ _____. A. divided by aggregate demand B. multiplied by the population C. divided by the population D. divided by the total labor hours

divided by the population; C

The phases of the business cycle are​ _______. The turning points of the business cycle are​ _______. A. expansion and​ recession; direct and indirect B. peak and​ trough; expansion and recession C. positive and​ negative; minimum and maximum D. expansion and​ recession; peak and trough

expansion and​ recession; peak and trough; D

U.S. gross domestic product is the market value of all the​ ______ produced​ ______ in a given time period. A. ​goods; by American firms located anywhere in the world B. ​goods; within the United States C. final goods and​ services; within the United States D. final goods and​ services; by Americans anywhere in the world

final goods and​ services; within the United States: C

GDP equals aggregate income and also equals aggregate expenditure because​ _______. A. firms pay out as incomes​ (aggregate income) everything they receive from the sale of their output​ (aggregate expenditure) B. aggregate income measures profit as net profit and aggregate expenditure measures investment as net investment C. the Department of Commerce has defined GDP in such a way that it can be calculated by either summing total income or by summing total expenditures D. labor produces final goods and all purchases in the economy are purchases of final goods

firms pay out as incomes​ (aggregate income) everything they receive from the sale of their output​ (aggregate expenditure); A

National product is​ _______. A. production including​ imports; production excluding imports B. the value of goods and services produced anywhere in the world by the residents of a​ nation; production within a country C. production within a​ country; the value of goods and services produced anywhere in the world by the residents of a nation D. production excluding​ imports; production including imports

production within a​ country; the value of goods and services produced anywhere in the world by the residents of a nation; C

PPP is​ _______. A. parallel purchasing power B. preferred purchasing prices C. purchasing power parity D. price point parity

purchasing power parity; C

An expansion is a period during which​ _____. A. interest rate rises B. unemployment increases C. the economy faces hyperinflation D. real GDP increases

real GDP increases; D

To measure the standard of​ living, we use​ _____ . A. the growth rate of real GDP B. the growth rate of real GDP per person C. real GDP per person D. the population growth rate

real GDP per person; C

Real GDP is calculated by​ _______. A. dividing the value of the​ year's production at the prices of the year in which the production occurred by the value of the​ year's production at reference base year prices B. dividing the value of the​ year's production at reference base year prices by the value of the​ year's production at the prices of the year in which the production occurred C. summing together the value of the​ year's production using the prices of the reference base year D. summing together the value of the​ year's production using the prices of the year in which the production occurred

summing together the value of the​ year's production using the prices of the reference base year; C

Exports of goods and services are items that firms in​ _____ produce and sell to​ _____. A. any other​ country; the United States B. the United​ States; any other country C. the United​ States; the US government D. the United​ States; others firms within the country

the United​ States; any other country; B

The growth rate of real GDP contributes to an improved standard of living because​ _______. A. a higher real GDP increases potential​ GDP, which increases employment of​ labor, land,​ capital, and entrepreneurship B. more resources are devoted to household​ production, underground economic​ activity, and leisure time C. prices fall and the average person can afford to buy more consumption goods and services D. the average person enjoys more consumption goods and services and more resources are devoted to health​ care, research, and environmental protection

the average person enjoys more consumption goods and services and more resources are devoted to health​ care, research, and environmental protection; D

Real GDP might be an unreliable indicator of the standard of living because​ ______. A. real GDP is measured differently in various parts of the country B. the standard of living depends on many​ factors, some of which are not part of real GDP C. real GDP numbers are constantly being updated D. real GDP values all production in constant prices

the standard of living depends on many​ factors, some of which are not part of real GDP; B

The amount by which​ _____ is called net investment. A. the value of capital increases B. ​firms' profits increase C. ​firms' costs decrease D. the value of capital decreases

the value of capital increases; A